Sovereign wealth funds have their role in crisis
October 13, 2008, 10:23 am TWN
WASHINGTON -- Sovereign wealth funds, the state investment vehicles that are flourishing during a boom in commodities prices, could play a role in the current financial crisis, World Bank chief economist Justin Lin said Saturday.
"They have the capital and now we have the situation," said Lin, a Peking University professor who took up the bank post in June.
"Certainly the sovereign wealth funds can play some function," he told reporters on the sidelines of an International Monetary Fund meeting in Washington.
Global credit flows have nearly frozen in recent weeks as financial turmoil that began 14 months ago escalated, notably after the U.S. government allowed the Wall Street investment bank Lehman Brothers to collapse, shaking market confidence.