How Sovereign Wealth Funds End
Ashby Monk on how SWFs failed to prevent fiscal disaster in the EU:
The pension reserve funds were set up to try to use the ‘power of finance and compounding’ to take some short-term surpluses to meet long-term unfunded pension obligations. It’s a neat idea, which hasn’t played out as hoped. For example, Ireland used its fund to bailout Irish banks, Portugal has tapped its Fund to the tune of €6 billion to meet its fiscal obligations, and Spain has used its Reserve Fund to prop up its bond market. You get the idea.
posted on 18 September 2012 by skirchner
in Economics, Fiscal Policy
(0) Comments | Permalink | Main