Examining the U.S. Regulatory Framework for Assessing Sovereign Investments: Written Testimony Prepared for the U.S. Senate Committee on Banking, Housing and Urban Affairs (April 24, 2008)

7 Pages Posted: 9 Apr 2013

See all articles by Paul Rose

Paul Rose

Ohio State University - Moritz College of Law; Bocconi University - BAFFI Center on International Markets, Money, and Regulation; Tufts University - The Fletcher School of Law and Diplomacy; Fundación Instituto de Empresa, S.L. - IE Business School

Date Written: April 8, 2013

Abstract

While recognizing that the concerns with sovereign investment in financial firms are significant, these concerns need not be answered by adding to or amending existing statutes and regulations. First, as Robert Kimmitt has noted, SWFs have not caused significant financial-market disruption, and even for investments that do involve control, there is little evidence of any ulterior foreign policy motives in practice. Second, imposing additional regulations on SWFs beyond the reasonable framework now in place may create other, more significant problems, such as a shift in SWF investment away from the U.S. The result of such a shift would be detrimental both because U.S. firms would miss the capital investments, and because the funds may flow to other jurisdictions that may be under-regulated. Arguably, this could increase the danger that SWFs would be used as political tools to harm our national interests, and make it less likely that our regulators could effectively work against such activities.

Keywords: sovereign wealth, foreign investment

JEL Classification: K2, K20, K22, K33

Suggested Citation

Rose, Paul, Examining the U.S. Regulatory Framework for Assessing Sovereign Investments: Written Testimony Prepared for the U.S. Senate Committee on Banking, Housing and Urban Affairs (April 24, 2008) (April 8, 2013). Ohio State Public Law Working Paper No. 200, Available at SSRN: https://ssrn.com/abstract=2246705 or http://dx.doi.org/10.2139/ssrn.2246705

Paul Rose (Contact Author)

Ohio State University - Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States

Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )

Milano, 20136
Italy

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

Fundación Instituto de Empresa, S.L. - IE Business School ( email )

Calle Maria de Molina 12, Bajo
Madrid, Madrid 28006
Spain

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