The IMF to Regulate Ever-More-Popular Sovereign Wealth Funds?

Sovereign wealth funds (check out the Inquirer's coverage of the topic here) have become an important facet of the international economy, so much so that US Secretary of the Treasury Henry Paulson has asked the International Monetary Fund (IMF) to come up with guidelines for how these massive investment funds should be allowed to operate.

The IMF, which is currently wrapping up its annual meeting in Washington, is a financially self-sufficient international organization that oversees currency exchange rates and makes loans to countries facing financial difficulties or crises. 185 countries currently belong to the organization, which was founded at the Bretton Woods Conference in 1944.

While sovereign wealth funds have emerged in China and the Middle East, just recently Brazil, Latin America's largest economy, announced the creation of a $10 billion fund to manage a portion of its national reserves.