Government: U.S. needs foreign cash
Wednesday, March 5th, 2008“If we were to prohibit sovereign wealth funds from investing in our market for fear they might introduce market distortions, there is a risk we might actually end up doing precisely this to ourselves,” said Ethiopis Tafara, director of the office of international affairs for the Securities and Exchange Commission.
…The credit crisis, which has left several financial firms strapped for cash, opened up even more opportunities for these funds. A number of Wall Street firms have looked to sovereign wealth funds to raise capital.
So far, Citigroup has raised $22 billion from state funds located in Abu Dhabi, Kuwait and Singapore. Others have enacted similar moves including Merrill Lynch, which has raised nearly $13 billion from the governments of Kuwait, Korea and Singapore’s state-run Temasek Holdings. In December, Morgan Stanley said it received a $5 billion injection from China’s state-run investment arm, China Investment Corp.