SWFs good for global stability

Sovereign wealth funds (SWFs) can play a role in stabilising international markets, a new study from the Bank of Canada finds.

The authors note that SWFs have existed since 1950s and that there is no evidence that they explicitly act in a way that would disrupt global markets. They point out that SWFs have a self interest not jeopardise financial stability and that the funds are long-term investors with a low degree of leverage which take positions contrary to those chasing short-term gains.

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