[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/eab/macroe/23249.html
   My bibliography  Save this paper

Reevaluating the Roles of Large Public Surpluses and Sovereign Wealth Funds in Asia

Author

Listed:
  • Bernard Lee

    (Asian Development Bank Institute (ADBI))

  • Hefei Wang
Abstract
This paper discusses the increasingly important roles of Asian official institutions in the new global financial landscape and the reasons that have led to the build-up of massive public surpluses. We re-examine the role of sovereign wealth funds (SWFs) as the de facto "global lender of last resort" during the recent financial crisis. Specifically, we analyze SWFs’ balance sheet characteristics, target allocations strategies, strategic agendas and political realities, management philosophies, and other real-world challenges, both before and after the crisis. Part of our analysis incorporates data which includes announced deals, regulatory filings, balance sheet information, and actual performance data made available by specific SWFs. We also point out a logical inconsistency in the common application of the Berk-Green alpha argument to the management of SWFs. For instance, the recent work done by Ang, Goetzmann, and Schaefer (2009) suggests limited or no evidence that alpha-seeking activities have impacts on SWF performance. We argue that the problem may be partially due to the choice of an appropriate performance benchmark for such large, non-commercial mandates. Finally, we propose a set of principles to construct a fair performance benchmark for SWFs.

Suggested Citation

  • Bernard Lee & Hefei Wang, 2011. "Reevaluating the Roles of Large Public Surpluses and Sovereign Wealth Funds in Asia," Macroeconomics Working Papers 23249, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:macroe:23249
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/23249
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:macroe:23249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shiro Armstrong (email available below). General contact details of provider: https://edirc.repec.org/data/eaberau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.