With oil prices having quadrupled in the past five years, oil-exporting countries are awash with hard currency, much of which is being channeled into government-run investment funds. VOA's Barry Wood reports that the funds are controversial because of a lack of transparency and fear that their investments might be used for political purposes.
Abu Dhabi's investment fund this week injected $7.5 billion into America's biggest financial institution, Citigroup. The transaction gives the Abu Dhabi Investment Authority (ADIA) a nearly five percent stake in the New York-based bank. Ted Truman, a former U.S. Treasury official now a researcher at Washington's Peterson Institute, recently completed a study of sovereign wealth funds. He says Abu Dhabi's investment in Citigroup is not a surprise.
"First of all, Citi needs the capital," said Ted Truman. "That's the most important thing. Citi needs the capital and Abu Dhabi was a natural because it has probably the largest sovereign wealth fund currently. We don't know how large it is, but let's say it is $700 billion.
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