The Kuwait sovereign wealth fund chief, attending a trade conference in Europe, said Wednesday that a voluntary code of conduct for state-controlled investment apparatus would be no good to the economy.
Bader al-Saad, managing director of the Kuwait Investment Authority, said his fund already met most proposed requirements on governance and transparency as called for by the United States and the European Union and that an official code of conduct would not help.
"Complete transparency would raise more questions than answers," he told a trade conference in Bourglinster, Luxembourg, warning too much scrutiny on state investments could harm the global economy.
"The consequences of imposing regulations on sovereign wealth funds will result in an adverse impact on global capital flows," he said. "These regulations will not solve or prevent any future financial crises," he added.
Al-Saad's Kuwait Investment Authority (KIA) is the world's oldest and one of the largest sovereign wealth funds. Established 55 years ago, the KIA now manages about 225 billion U.S. dollars.
The second-biggest shareholder in Daimler, it owns shares in BPand has recently made eye-catching investments in U.S. banks Citigroup and Merrill Lynch, which were hit by the sub-prime mortgage market crisis and the financial turmoil.
Al-Saad said past experiences have shown his fund is operating simply on a commercial basis and with no political intention.
"History has shown that all KIA investments are made purely on a commercial basis with no political bias. The KIA looks at the bottom line," Al-Saad said.
"We have a long-term investment. We think we are in a cycle and we want to ride that cycle. We think over the long term this will be a good move," he said, referring to the investments in Wall Street banks.
EU leaders last month supported the objective of agreeing at the international level on a voluntary code of conduct for the sovereign wealth funds and defining principles for recipient countries at the international level. Meanwhile, they reaffirmed the 27-nation bloc would remain open to those funds.
Source:Xinhua
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