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Hastings International and Comparative Law Review

Authors

Matthew Saxon

Abstract

Over the past few years, sovereign wealth funds have played an increasingly important role in the global financial system. This note seeks to shed light on the foreign investment vehicles known as sovereign wealth funds (SWF's). In the first section I will explain what a sovereign wealth fund is; why regulators in the U.S. and European have recently become concerned with them; and how SWF's have reacted to these concerns. In the second section, I will compare and contrast the strategies that U.S. and European regulators have employed in adjusting to these funds. Finally, I will argue that lawmakers in Europe and the U.S. should resist the temptation to over-regulate SWF's. While some protections are necessary, the free flow of money across international borders will benefit the world economic system.

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