Swf

Can the French help the SWFs cause?

Jim Kim — Tue, 29 Jul 2008 21:42:17 -0400

Sovereign wealth funds have garnered a lot of attention recently, most of it negative. But now comes word from IDD that France is considering launching such a fund. President Nicolas Sarkozy, a big fan of many things American, has publicly supported the idea of transforming Caisse des Dépôts et Consignations (CDC), a state-owned financial institution, into a SWF. It has $345 billion in assets, which would rank it second between the Abu Dhabi Investment Authority ($625 billion) and Norway's SWF ($322 billion).The issue is whether France would join Norway in setting a good example in terms of transparency, or will it follow a more closed model? Hopefully, it would take a leadership role. You have to wonder if any of that money would flow to the U.S. That might not go over so well with the folks at home, but we'll see.

For more:
- here's the IDD article (For FierceFinance readers)

Capital raising to get harder for commercial banks

Thu, 22 May 2008 06:59:54 -0400

We all get the sense that banks are due for some more capital raising. But it comes down, in large part, to upcoming writedowns. If they are much worse than expected, banks will have to hit the capital trough again, notes Investors' Business Daily. The problem is, raising capital will only get harder, especially if we assume the SWF and private equity money has dried up. Many have already pushed to the limit of preferred sales. At some point, common shareholders will be forced to protest the terms and dilutive effects. Common share offerings will be iffy propositions at best. The article makes an interesting point. Commercial banks may have the harder time if other asset classes--auto loans for example--hit some turbulence.

For more:
- here's the article

Shadow banking universe gets more complex

Fri, 07 Mar 2008 06:59:54 -0500

We've heard a lot of denunciations recently of the shadow banking system, which seems to be raining problems on the brightly lit banking system. But here's a thought; one Pimco official suggests that sovereign wealth funds stand to make the shadows even darker, according to Hedge Fund Daily. Hedge funds, of course, are not the most transparent of vehicles. But SWF make them seem downright chatty about their business. You have to think they represent a huge pool of potential customers for purveyors of structured finance products. If certain forms of CDOs, for example, are to survive, they will need new buyers that do not answer to the public.

For more:
- here's the item on the Institutional Investor website

Related Articles:
Shadow banking system any clearer? Article
More on the global worry over SWFs Article
Shareholders to cry foul over sovereign wealth? Article