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Post Global Financial Crisis financial governance – clues from how multi-lateral governance of sovereign wealth funds has evolved

Open Panel

Abstract

This panel poses the oft-used analogy of is it old wine in new bottles regarding developments in contemporary forms of financial governance such as Basel 3. I suspect the answer is yes and draw on a case study of multi-lateral governance of Sovereign Wealth Funds (SWFs) to inform this assertion. The paper incorporates the findings of a number of semi-structured interviews (n = 42) with SWF stakeholders in Australia, China, Norway, the UK and the US. Those interviewed include: SWF personnel, regulators (both national and international), analysts, bankers, brokers, fund managers, governance professionals, academics and financial journalists. Much of the post-GFC global financial reform agenda has been about leverage and increasing the capability of jurisdictions to know what levels of investment and leverage are in their markets. In terms of SWF and other state-related pools of investment activity there remains considerable ambiguity about their levels of investment as more states become active investment actors. The limited reach and impact of the International Working Group of Sovereign Wealth Funds, (2008), Generally Accepted Principles and Practices (GAPP) – The Santiago Principles suggests that multi-lateral regulation of the financial sector will continue to be on the soft side of the soft law continuum. Most regulatory advances are likely to be in the area of increased cross-border surveillance rather than the production of binding agreements upon sovereign states.