The New Economics of Sovereign Wealth Funds

Contents

Foreword

List of Tables and Figures

List of Abbreviations

Acknowledgements

Introduction

A few stylized facts

SWFs under the spotlight

Defining SWFs

Misplaced fears

The plan of the book

1 The Macroeconomic Dynamics Behind SWFs

1.1 Persistent current account surpluses translate into accumulation of foreign assets

1.2 Absorption constraints: the rationale for establishing SWFs and FWFs

1.3 The management of natural resources windfall

1.4 Commodities demand and the super-cycle theory

1.5 SWFs as alternative to an income tax system: what if Norway becomes like Saudi Arabia?

2 Size and Growth of SWFs Assets

2.1 Size and clusters of SWFs

2.2 Drivers of SWFs asset growth

2.3 The optimal level of foreign exchange reserves

2.4 Future growth in FX reserves: commodity- versus non-commodity-exporting countries

2.5 Size of SWFs by 2016

Appendix: How big could SWFs be by 2016?

3 SWFs as Investors in Global Markets

3.1 Clustering SWFs by objectives and investment profiles

3.2 SWFs as strategic investors in domestic and global markets

3.3 Geographical and sector distribution of SWF strategic investments: the 2007–2008 surge of investments in Western financials

3.4 Investment performance of SWFs and the impact of the financial crisis

3.5 Explicit and implicit liabilities of SWFs

3.6 Long-term investments: SWFs as the ultimate risk bearers

4 Risk Management for SWFs

4.1 The crisis in retrospect

4.2 The complex qualitative nature of risk: uncertainty, chaos, black swans and fat tails

4.3 ...