SAFE, SWF?
A number of oil exporters have, through their sovereign funds, effectively invested some of the fiscal surplus from high oil prices in troubled US and European banks. The Abu Dhabi Investment Authority has a stake in Citi; Kuwait’s investment authority has stakes in Citi and Merrill, and Qatar’s investment authority is buying Credit Suisse shares as well. A member of the royal family of another Gulf country supposedly is interested in a UBS stake as well.
Singapore’s GIC - which in effect manages some of Singapore’s reserves (though the GIC reports to its own board, not the Monetary Authority) - has invested in a US major bank, has committed funds to a large Swiss Bank and supposedly will be the lead investor in a TPG fund that will invest in the distressed financial sector as well. TPG is a large private equity firm.
Another Singapore Fund - Temasek, which that originally managed Singapore’s domestic state-owned firms but then diversified - has also invested in a big international banks (Standard Chartered), big Chinese banks (China Construction Bank, Bank of China) and a broker-dealer (Merrill). The line separating the GIC (a portfolio investor) from Temasek (a direct investor) is increasingly blurred.
Korea’s investment corporation (KIC) also has invested in Merrill. The KIC reports to a steering committee, is capitalized with funds from the government and manages funds from the Ministry of Finance ($13b, counting the $10b pledged for 2008) and the Central Bank ($17b) — see its website. It may also be looking to raise funds from Korean pension funds.
China’s Investment Corporation - which is funded by the Finance Ministry by special bond issues but reports to the State Council not the Finance Ministry - has taken a significant stake in a large broker-dealer and, according to the FT’s SWF guru Henny Senders, is the "sole investor" in a JC Flowers fund as well.
And China’s State Administration of Foreign Exchange - which manages China’s foreign exchange reserves and reports to the People’s Bank of China - may be joining the GIC in the TPG fund investing in distressed banks as well. Henny Senders:
The State Administration for Foreign Exchange, an arm of the Chinese government with responsibility for managing the country’s official $1,530bn in foreign exchange reserves, might also come in as a big investor in coming weeks.
There are certainly rumors that SAFE has started to take on more risk over the past year in various ways, but investing in a buyout fund focused on distressed financial sector assets would be a major step in SAFE’s evolution.
It is getting harder and harder to differentiate sovereign wealth funds from central banks. Both now seem to be taking — directly or indirectly — significant stakes in big banks and broker-dealers. Central banks are no longer just buying Treasuries.
That said, I am not that surprised that SAFE is taking a few more risks. SAFE wants to show it can generate big returns, and thus there is little need for a large CIC …
One of the characteristics of China’s state - as Richard McGregor argues - is that different parts of the state often compete against each other.
The common denominator of all these investments is that they come from countries whose governments frankly have way too much foreign exchange, and are still adding to their stockpiles of foreign exchange despite having way more than they need.
I am not just thinking of China.
Why is Singapore adding over $20b to its reserves a year right now?
And it is perhaps time for the government of some oil exporters to experiment with more creative ways of managing — and sharing — their oil wealth as well.
UPDATE: SWF radar is right; I should have mentioned SAFE’s investment in Australian bank stocks as well.
whose governments frankly have way too much foreign exchange…
Who’s to say what is “too much?” One person’s “too much” may be another’s “just adequate.”
I think the situation with SAFE is more of a power play with the CIC, then anything else. I wouldn’t be surprised that some people with SAFE and within the PBoC are spreading these rumors to try and gain leverage over the CIC. If SAFE, does in fact, take any major stakes, then the CIC has lost its battle. There were unconfirmed reports during the creation of the CIC that Hu Xiaolian, head of SAFE and board member of the CIC and Lou Jiwei, CIC chairman, had a major falling out. So there a fair amount of hostilities there.
Guest — I didn’t post the various studies of reserve adequacy, but by all standard measures the big emerging economies have more than enough — whether the standard is 2x Short-term external debt or 10% of GDP (the number that falls out of the Jeanne/ Rancierre study) or Rodrik’s estimates. The fact that governments are setting up SWFS which invest in less liquid assets is also a de facto recognition that they have enough liquid assets.
Or to put it a bit differently, if governments now just have the right level of foreign exchange reserves after adding about 2 trillion to their stock over the past two years, they were massively under reserved at the end of 05.
Back in the 90s I though the emerging markets had way too few reserves and had under-insured v financial volatility (see my book with roubini on emerging market crises), but sometime around 04 most of Asia swung so far in the other direction that there really wasn’t a strong prudential case for ongoing reserve growth.
I am happy to listen to informed counter-arguments, but the evidence here in my view is pretty overwhelming.
Patrick — I fully agree that there is a very strong rivalry between SAFE and the CIC, though I don’t feel like i know the full backstory.
It’s probably just speculation but from a conservative asian viewpoint, there’s nothing worse than running out of $ and into debt. Saving up for a rainy day has always been a dictum in Singapore, guess why the senior minister (former pm) talked about golden geese in his latest interview. But prudence looks ever better post 97.
Maybe SAFE just wants to assert itself, after all, the FT asserted that they denied their own existence till recent months. Well, at least they didn’t go the kerviel way to prove how capable they are, at least china’s probably hoping that. All the infighting, it’s proving to rival those hongkong dramas!
BTW, saw your comment on Yves ’s post, one point; wouldn’t fed cuts ultimately tie their hands when the inflation snake whips back to the USA?
What’s your opinion on Stephen Jen’s assertion that the the acceleration in Japan’s reserves towards the end of 2007 is due to more aggressive management of part of the reserves perhaps in part to achieve higher returns to forestall creation of a sovereign fund?
http://www.morganstanley.com/views/gef/archive/2008/20080215-Fri.html#anchor6040
and mightn’t SAFE have as much to gain in insulating themselves from concerns about the returns on their assets after all the media response to the news that it had taken stakes in the AUZ banks? as well as its domestic competition with CIC.
Judy –
The fed thinks that dollar weakness has very limited impacts on inflation in the US, both b/c imports are still only a modest share of overall consumption and because so called pass through is limited. But in theory the impact of dollar weakness/ global inflation on US inflation is a limit on the fed.
Rachel — the simplest explanation for the strong performance of Japan’s reserves since June is that Japan marks its bond portfolio to market, and thus falls in interest rates lead to a rise in its reserves. That presumably is what happened in January. And if you compare the returns on japan’s reserves in say q2 07 v q3 and q4 07 i think you see something similar.
Basically, Japan has been rewarded for being conservative, and unlike most other central banks, it market its bond portfolio to market.
My sense is that the BoJ has been a bit more aggressive with its reserves and the Minfin has been shifting at the margins into agencies, but by and large, the portfolio remains in $.
An enterprising student should be able to back out the average duration of japan’s portfolio from the observed market changes incidentally — especially if you assume japan has a roughly 85/15 reserves portfolio (the central bank has more euros …).
Setting rules for sovereign wealth
Published: February 18 2008 18:54
The timing looks suspicious. Australia may well have been looking at how to deal with sovereign wealth funds before this month’s $14bn dawn raid by the Chinese state-owned mining company, Chinalco, on shares in Rio Tinto, the Anglo-Australian mining group. But the six principles set out by Canberra for subjecting state-controlled investors to greater scrutiny are as much a result of its desire to protect strategic assets as they are a model of corporate governance.
The proposed screening programme will look at whether a sovereign fund investing in an Australian company operates at arm’s length from its government. Financing and governance arrangements will be examined too.
Brad,
I wonder why you are not critical of Eastern European countries for having massive current account deficits.Their productive assets and banks are controlled by foreigners. Turkey is on the same path as well that is the reason the current islamists get a free pass from wsj, ft, the economist etc.
All these Sovereign Wealth Funds want is a piece of the FED in the form of primary dealers.
Apparently they’ve gotten wind of the upcoming restructuring wanted by THE NEW WORLD ORDER.
SWF with too many US Dollars? Well, the Bernanke Fed is providing excess liquidity to the markets by the bucketful. And the Bush Administration giving away $342.8 billion dollars from deficit spending in an attempt to save the US shopping mall economy and McMansion republican supporters. Everyone is foolishly trying to rescue the economy with a series of misguided proposals each more ridiculous than the previous. In the end result, the US Dollar will be a worthless piece of paper. By the way, every fiat currency in world history has ended the same way.
Brad - have you been tutoring this guy?:
China shares blame for crisis, Carney says
Cites flood of capital and readies markets for more interest rate cuts in first speech as Bank of Canada Governor
February 19, 2008
OTTAWA, VANCOUVER — China should be held partly responsible for the subprime-mortgage meltdown that has dragged North America into a slump and repeatedly rocked financial markets around the world, Canada’s new central bank Governor says.
In his first speech as Bank of Canada Governor, Mark Carney said interest rates will have to fall further in Canada to fend off the slowdown spreading from the United States. His forecast for slow growth in Canada was in line with the expectations of his predecessor, David Dodge.
But Mr. Carney saved much of the focus in his academic-style speech for the economies of emerging markets - especially China.
By insisting on fixed exchange rates, China and other emerging markets over the years have become a major exporter of capital “to such an extent that they have been significant drivers of lower global long-term interest rates,” Mr. Carney told a full house of Vancouver business people.
Those low rates drove investors to comb the earth in search of higher-yielding investments - a quest that prompted an insatiable appetite for highly structured credit products such as those backed by subprime mortgages.
Those sophisticated and poorly understood products are now the main conduit for contagion of the U.S. slowdown to the rest of the world.
Chinese economic policies “are not the sole factors, but they have contributed to the low level of monetary interest rates globally,” Mr. Carney later told reporters.
“That has spilled over - both on the monetary policy side, because it has driven interest rates down.”
http://www.theglobeandmail.com/servlet/story/LAC.20080219.RCARNEY19//TPStory/Business
http://www.bankofcanada.ca/en/speeches/2008/sp08-2.html
“Dubai International Capital, an investment fund owned by the ruler of Dubai, plans to invest about $US5 billion in China, India and Japan over three years as a play on the rapid growth of ["emerging markets" - Japan?]…” http://business.theage.com.au/dubai-eyes-asian-markets/20080219-1t0o.html
“…China’s leaders have proven to be remarkably responsive, if not overtly attentive, to the unarticulated needs and interests of private capital…” http://www.feer.com/articles1/2008/0801/free/p013.html?China’s_Complicit_Capitalists
Let me understand this….
Foreign Central banks have excess capital and want to invest in something other than goverment securities. What they do is buy US banks and brokerages. US banks and brokerages make money by dispensing money within a population in hopes of getting more money back. It’s not really any different that buying goverment securities except the returns aren’t guaranteed and usually the returns are higher. It’s an avenue for pegging countries to recirculate their reserves back into the US.
The problem with countries like China, who devalue their currency relative to USD, doing this is when they buy goverment securities, they money is pretty much guaranteed to find it’s way back in the US economy. Brokerages are more likely to invest in other countries and maybe even back into China. It partially defeats the purpose of the currency interventions.
I wonder if the SWF’s will try and influence how the banks and brokerages invest their money so as to benefit the SWF country as much as possible.
If China bought say, Bear Sterns, and I had an account with Bear Sterns and they wouldn’t invest in China, I wouldn’t be happy and would likely put my money in a place with more investment options.
Anonymous,
I agree with Carney 100%. I don’t think it’s productive to blame anyone for the mess, but it’s productive to explain how the mess occurred.
or influence campaign contributions
Hillary Clinton - Top Contributors
http://opensecrets.org/pres08/contrib.asp?id=N00000019&cycle=2008
re: “Foreign Central banks have excess capital and want to invest in something other than goverment securities. What they do is buy US banks and brokerages”
“…Wall Street’s biggest brokerages have kept pace by building machines capable of processing thousands of orders at a lower cost than hiring extra traders… Citigroup Inc.’s Automated Trading Desk tries to predict prices for 8,000 stocks 30 seconds into the future to give the largest U.S. bank an edge on rivals…” http://www.bloomberg.com/apps/news?pid=20601109&sid=anc5uXSV7_lY&refer=home
Anonymous — at the beginning of the year, several of my forward looking posts highlighted the risks associated with large and growing current account deficits in Eastern Europe, with a link to an IMF paper on vulnerabilities in SE Europe. And I made a similar point in response to the Rogoff/ Reinhart paper.
I need to read Carney’s speech — glad the Canadians accept that central bank intervention matters. Maybe the Fed will start to give a bit more weight to intervention — as it seems rather central to the modalities of the actual global savings glut.
Somehow though what started as a promising thread sort of seems to have veered off track — the main theme of the post was that the line between central banks and SWFs was getting blurred, with central banks:
providing the funds for many SWFs by effectively putting fx on deposit at the SWF (the SWF then is a fund manager for the central bank)
and taking (in some cases) SWF style risks by making SWF style investments.
Am I overstating the shift based on a single example?
And is this a good thing — i.e. should SAFE be trying to match the CIC, or should it stick to safer, more conservative investments?
what are the risks, if any, when a central bank — which generally has a regulatory function — invests in big PE funds with exposure to major global financial institutions/ big hedge funds/ even potentially buys into big banks?
Believe it or not, Carney, the new Bank of Canada governor, is ex-Goldman Sachs.
The central bank/SWF distinction and split, while intriguing from a bureaucratic perspective, is somewhat irrelevant from an economic perspective. The economic issue is asset mix for the deployment of reserves.
Moreover, there is another related kind of bureaucratic split that you haven’t mentioned. Some countries don’t put their FX reserves on the central bank balance sheet - they run exchange funds with separate balance sheets. Japan and Canada come to mind. Their central banks fund their governments via bond holdings, and the governments advance funds to their exchange funds. This probably makes reserve accounting more transparent and sterilization operations more straightforward.
“China should be held responsible for the subprime-mortgage meltdown that has dragged North America into a slump and repeatedly rocked financial markets around the world, Canada’s new central bank Governor says.”
Mark Carney, the new Bank of Canada governor, is trying to deflect the blame from his former employer Goldman Sachs by blaming the subprime fiasco on the Chinese. To the best of my knowledge, the China PBoC hasn’t replaced the Federal Reserve’s regulatory authority of the US Banking system. Facing financial losses amounting to $10 billion on its portfolio of AAA rated subprime bonds, the Bank of China was a victim and not the perpetrator of unregulated capitalism. Goldman Sachs marketed hundreds of billions in subprime mortgage backed securities that were fraudulently marketed as AAA rated bonds to banks, pension funds, and money market funds worldwide. With losses from MBS securities, a General Electric money market fund was recently the first to break the $1 per share rule, shafting the general public savers out of their hard earned money.
I am sure that Brad is right about the explanation for the recent growth in the size of Japan’s reserves. Morgan Stanley’s assumed rate of return on 2.5-3% is far too low. Even if MS were assuming that Japan does not mark its reserves holdings to market, they should have used an accruals rate based on an average coupon, which is probably at least 4.5% even if Japan holds no agencies.
I disagree with Morgan Stanley’s call for Japan to create its own SWF, for reasons I explain at: http://reservedplace.blogspot.com/2008/01/one-country-that-does-not-need.html
Anonymous — good point. Japan’s MoF tho “funds” its fx position with very short-term bills (mostly 3m bills, if memory serves) so that part of MoF’s balance sheet ends up looking sort of similar to a central bank’s balance. And the MoF actually invests more conservatively than the BoJ. China’s MoF by contrast issues longer term bonds to fund the CIC, tho the CIC doesn’t report to China’s MoF. And the CIC theoretically will take more risks than SAFE.
All these kinds of fx stockpiles can be differentiated from the surplus fx from a commodity windfall (captured via export taxes or a state owned oil company). That is the government’s own saving, not borrowed money — and in theory it can be more easily geared up if the government wants to since it is not already leveraged. in practice tho some commodity surplus funds are managed very conservatively, and others very very aggressively.
Whether reserves are managed by the central bank, exchange fund or SWF, the reserves managers should be transparent about their investment results so that the public can take an informed view. Perhaps some of the more aggressive reserves managers are quietly sitting on big losses from the recent turmoil in credit markets. According to Central Banking Publications, the 51 contributors to their annual survey of reserves managers have become more risk averse:
http://www.ft.com/cms/s/0/d1e7d7d0-ddaf-11dc-ad7e-0000779fd2ac.html
Rebel — tis bizarre but i think true that sovereigns are currently willing to either take very little risk (and hence piling into treasuries and agencies) or a ton of risk (buying banks and broker dealers in the middle of a credit crisis) but not much in between.
“…The new policy is “looking longer-term and it’s safer longer-term,”… In effect, the plan substantially changes the makeup of the pension agency’s assets, which have historically been invested in safe fixed-income investments, and introduces more risky securities into the mix…” http://online.wsj.com/article/SB120338429118775777.html?mod=googlenews_wsj
A sinking feeling for the dollar in China
By Don Lee, Los Angeles Times Staff Writer
February 19, 2008
http://www.latimes.com/business/la-fi-cheapdollar19feb19,1,4692293.story
SHANGHAI — On a frigid winter afternoon, an old dumpling of a man with buzz-cut hair was holed up in his usual spot, the corner of a busy bank lobby here. He reached into his beige fisherman’s vest, pulled out a wad of bills and turned to the people hovering over him waiting to trade currency.
There was the young woman with 40,000 Japanese yen to exchange. Another had a stack of euros. Then an elderly couple, each clutching a handbag, sidled up to the man and asked if he would change their U.S. dollars into Chinese yuan.
“No, I don’t want dollars,” he snapped, shooing them away with a wave of his pudgy hands.
Nobody here wants the lowly American dollar anymore. Not businessmen, not bankers, not even the “yellow bulls” like this man, who has been a black-market trader for years and whose presence in the lobby of a large state-owned bank is tolerated, oddly, by its managers.
Obama isn’t all that different. His money comes from investment banks, law firms, etc., etc. He does seem to have gotten more from universities than Hillary. I think the interesting things is not the difference between the two but the similarity. And the fact that law firms and investment banks seem to find it valuable to buy politicians. Why is of course the critical question. What do the politicos do for them that they would not do without being paid?
http://opensecrets.org/politicians/allcontrib.asp?CID=N00009638
Obama isn’t much different from Hillary.
“…Even as it is acting to encourage citizens to buy things with dollars, or keep them, China’s government is allowing faster appreciation of the yuan, also called the renminbi. This may seem counterintuitive, but by raising the yuan’s value, and thus making Chinese goods sold abroad more expensive, Beijing hopes to slow exports a bit. That could reduce its massive trade surplus and inflows of dollars - and the accompanying political pressure from trading partners and domestic inflation that has surged to worrisome levels…”
Rebel — tis bizarre but i think true that sovereigns are currently willing to either take very little risk (and hence piling into treasuries and agencies) or a ton of risk (buying banks and broker dealers in the middle of a credit crisis) but not much in between.
Written by bsetser on 2008-02-19 10:41:09
Perhaps the reason is that they are blocked from buying the “in between” things. As China was blocked from buying Unocal. The US for example likes China to buy its depreciating bonds, or shoring up its failing financial institutions, but won’t hear of its buying good solid US companies.
no bear stearns on obama’s list. morgan stanley not so prominent, google for obama, microsoft for hillary, ubs at the lead for obama, no ubs on the list for hillary…
Why The Next President Of The United States will be Obama
http://globaleconomicanalysis.blogspot.com/2008/02/obama-next-president-of-united-states.html
Grass roots will carry the banner for the first time since McGovern in 1972. Barack Obama will win the Democratic nomination and go on to beat McCain in the presidential election of 2008.
The reason, believe it or not, is an attitude change about “walking away”.
Most don’t realize it but there is currently a national referendum on walking away that is page one news every single day. I am talking about decision 2008, the presidential election.
Will we walk away from Iraq or not?
- A vote for John McCain is a vote for the status quo of wasting trillions more dollars and countless more lives in Iraq.
- A Vote for Obama is a vote for exiting that hellhole and having discussions with Iran.
- A vote for Hillary Clinton is a vote for wishy washiness, political expediency, and the same stubborn unwillingness to admit mistakes that we see in Bush.
Poll: Leaving Iraq will help economy
The public has decided (and they are correct) that It Is Time To Leave Iraq. What’s really interesting is that leaving Iraq is the number one choice to help the economy. Let’s take a look.
AP Poll: Stimulus Checks Welcome, but to Really Help the Economy US Should Leave Iraq.
The heck with Congress’ big stimulus bill. The way to get the country out of recession — and most people think we’re in one — is to get the country out of Iraq, according to an Associated Press-Ipsos poll.
Pulling out of the war ranked first among proposed remedies in the survey, followed by spending more on domestic programs, cutting taxes and, at the bottom end, giving rebates to poor people in hopes they’ll spend the economy into recovery.
so you are saying that by providing financing to bear stearns and morgan stanley, which in turn are top contributors to hillary’s campaign, that the ‘china’ supports “wishy washiness, political expediency, and the same stubborn unwillingness to admit mistakes that we see in Bush’”
U.S. CRUDE FUTURES SETTLE AT RECORD $100.01/BBL, ECLIPSES PREVIOUS RECORD $99.62
I think the Iraq and now Kosovo fiascos reveal the United States government as totally corrupt and quite possibly mad. Make no mistake that global goodwill toward the USA took a big hit this weekend re Kosovo - but our managed corporate crony media is not going to sound that alarm.
Guest: What do the politicos do for them that they would not do without being paid?
Return phone calls.
Brad, heard about Japan’s serious effort to establish a SWF? Cause for joy or sorrow? Doubt the Japanese would be more amendable to greater transparency
On both sides of the Atlantic, there is a good deal of paranoia - understandable, if not necessarily justifiable. But once these geopolitical anxieties are subtracted, these very wealthy funds are no different to other investors trying to spot value others may have not yet spotted. If this is the case, these funds should now be questioning the timing of their investment decisions.
After all, their performance is hardly impressive. They have spent $60bn on stakes in US and European banks and are all showing a 10 per cent or so paper loss. Abu Dhabi invested $7.5bn in a stake in Citigroup that is worth about $6bn. Kuwait has lost around 8 per cent on the $6.6bn it invested in Merrill Lynch. And so on.
The simple conclusion is that all these funds are no smarter than anyone else in picking the right moment to buy. Since they all claim they are investing for the long term, they can clearly afford to take their short-term losses on the chin. Even so, they cannot be too pleased. The question is whether this will make them more assertive, something that is bound to worry policy makers and politicians. But would an activist be any different?—Financial Times
Too bad for us if SWFs stop buying. Where will the money come from to stave off bankruptcies?
Judy — my sense is that the Japanese SWF will be quite transparent, and will work within investment guidelines set by a democratically elected parliament. i worry a bit about its size, but if it is:
transparent;
works within democratically established guidelines;
and steers clear of direct stakes
I won’t be too worried.
It will tho have to address the delicate issue of investing in companies abroad that compete against big japanese companies
I’m actually much less optimistic about a Japanese SWF since Japan has had a history of using its postal savings accounts to do all of the nefarious things that people worry about SWF’s doing. The Japanese Postal Savings system is basically the LDP’s piggy bank.
Also, I don’t see why “democratic” governments are necessarily better at finance or more trustworthy than authoritarian governments. Elections can often create the illusion of transparency and popular control without actual transparency and popular control, and I would argue that the Politburo of the PRC is far more worried about losing power than most of the people at the highest levels of the Japanese government.
As far as economic issues go, the National People’s Congress is far more open, transparent, and powerful in its decision making processes than the Japanese House of Representatives. The Chinese government talked about CIC for two of three years before actually going through with it, and the politics and the decision making processes were reasonably open. It will be interesting to see if Japan goes through the same sort of rather public process that China did.
My own belief is that freedom of speech and personal liberty are good things for their own sakes, but one must not get into the habit of thinking that “democrats” are angels that can do no wrong and “dictators” are all devils that can do no right.
Anonymous: so you are saying that by providing financing to bear stearns and morgan stanley, which in turn are top contributors to hillary’s campaign
We can pull up Federal Election Commission reports, but I’d be shocked if the top IB’s weren’t indirectly also paying money to Obama and any candidate that has a reasonable chance of getting elected. IB’s know that they can’t determine who wins an election, and their first priority in making donations is to make sure that whoever does win, returns their phone calls, and at least talks with their lobbyists.
Guest: Make no mistake that global goodwill toward the USA took a big hit this weekend re Kosovo - but our managed corporate crony media is not going to sound that alarm.
That’s one of the things about being a global hyperpower, you don’t have to care what other people think. US loses global goodwill? So what? Unless you can translate that loss into some reward or punishment for the US, no one is going to care.
The primary purpose of the media is to sell newspapers and make money. You were expecting something different?
As far as Iraq goes, I think that has already been decided. Unless the US body count goes up then the next President is going to stay.
@ Judy Yeo
“there’s nothing worse than running out of $ and into debt. Saving up for a rainy day has always been a dictum in Singapore”
That’s certainly true, but you can also have too much of a good thing.
When do you know you have enough?
Is this “rainy day” money having unfavorable consequences for others.
I think the point here is that these SWFs and their clones can have a distorting effect on capital markets, taking them further away from the “free market” concept.
In a global market surely we have to consider the wider ramifications rather than just the “national interest”.
Or to put it another way, we are all riding the same tiger.