Democrats call for greater scrutiny of foreign funds

DEMOCRATIC presidential candidates have voiced concern about multi-billion-dollar investments from foreign governments to shore up top US financial institutions.

The hot-button issue of sovereign wealth funds emerged in a televised debate in Las Vegas on Tuesday, with the White House hopefuls urging greater scrutiny of foreign money going into banks badly hurt by the sub-prime mortgage crisis.

“I’m very concerned about this,” said Democratic front runner Hillary Clinton.

“What we now see is our financial institutions having to go hat in hand to borrow money from these foreign funds.”

Citigroup said earlier on Tuesday that it was privately raising US$12.5 billion (S$18 billion), including almost US$7 billion from Singapore’s Government Investment Corporation.

UBS AG and Merrill Lynch & Co have also turned to sovereign wealth funds for capital.

Mrs Clinton, a New York senator and former first lady, urged the International Monetary Fund and the World Bank to impose rules on such funds to ensure greater transparency. She also called on Congress and the Federal Reserve Board to ask “tough questions” about the funds.

Former North Carolina senator John Edwards echoed her sentiments on transparency. His focus during the debate, however, was on US economic growth being concentrated among the country’s largest corporations.

Illinois senator Barack Obama blamed the investments by foreign companies – many of which are controlled by foreign governments – on the lack of a US energy policy and poor oversight of lending in the housing market.

He said that an effort “to spur on the use of alternative fuels, raise fuel efficiency standards on cars…would make a substantial difference in our balance of payments and that would make a substantial difference in terms of their (foreign investors) capacity to purchase our assets”.

“We have the best financial markets in the world, but only if they are transparent and accountable and people trust them,” he added.

Select the fields to be shown. Others will be hidden. Drag and drop to rearrange the order.
  • Image
  • SKU
  • Rating
  • Price
  • Stock
  • Availability
  • Add to cart
  • Description
  • Content
  • Weight
  • Dimensions
  • Additional information
  • Attributes
  • Custom attributes
  • Custom fields
Click outside to hide the compare bar
Compare
Compare ×
Let's Compare! Continue shopping