US seeks codes of conduct for state investment funds

US Treasury Secretary Henry Paulson said Saturday the IMF and governments should draft codes of conduct for cash-rich state investment funds that have raised national interest concerns in the United States and Europe.
"The increase in size and number of sovereign wealth funds (SWFs) ... has received increasing attention due to their potential implications for financial markets and investment," Paulson told International Monetary Fund policymakers on the opening day of the annual IMF meeting here.
Sovereign wealth funds are public and semi-public investment vehicles that manage the enormous money reserves of countries exporting raw materials and manufactured goods, notably China, Singapore and oil producers such as Norway, Abu Dhabi, Dubai and Qatar.
A surge in commodity prices in recent years has enriched government coffers in such countries, prompting then to search for foreign investment outlets.
But countries on the receiving end fear that such investment flows could be used to gain political control of some of their economic sectors.
"The United States believes a multilateral approach to SWFs that maintains open investment policies is in the best interest of countries that have these funds, and countries in which they invest," Paulson said.
"The growing importance of SWFs merits cautious, well-considered public policy responses," Paulson told the 24-member IMF steering committee. He said the IMF was "uniquely positioned" to identify best practices for SWFs, based on current global financial guidelines.