The Emergence of Sovereign Wealth Funds in Asia
Donghyun Park and Gemma Esther B. Estrada, Asian Development Bank, Economics and Research Department, 6 ADB Avenue, Mandaluyong City, Metro Manila 1550, Philippines E-mail: dpark@adb.org; gestrada@adb.org
Abstract
The foreign exchange reserves of Asian countries have expanded rapidly in recent years, to the extent that they are now widely believed to exceed optimal levels. The best use of the surplus reserves is to manage them actively to maximize profits rather than passively to manage liquidity. Sovereign wealth funds (SWFs) have a long history of using foreign exchange reserves for profit-seeking investment. Consequently, they have emerged as a popular institutional blueprint ...
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