US lawmakers want tougher stance on sovereign funds

U.S. lawmakers called on Thursday for tough scrutiny of investment in the United States by funds owned by foreign governments, but the White House and some experts warned that overzealous regulation could scare away much needed capital.

U.S. debate over sovereign wealth funds has intensified in the wake of infusions of billions of dollars from state-owned funds from China, Kuwait and Singapore to rescue major Western banks ailing from the subprime mortgage crisis.

Concerns have been stoked by the emergence of sovereign wealth funds owned by countries such as China and Russia, which critics say invest with strategic or political motives that make them different from the pension or investment pools of countries such as Norway or Canada.
"Instead of rescuing our economy, these investments only deepen America's insecurity, forcing the U.S. further into debt to foreign interests," Ohio Democratic Rep. Marcy Kaptur told the U.S.-China Economic and Security Review Commission.

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