to surplus. perhaps as important, the scale of the differences has grown with more countries running surpluses or deficits of over 5 % of gdp. oil and other commodity inflation is part of the story, of course, but that does not account for the large current surpluses in most of east asia. here strong manufacturing growth resulting from higher labour productivity has not been matched by higher domestic spending so savings have grown ahead of even dramatic investment growth. a deliberate policy of fostering export industrial growth has slowed the rise of exchange rates that would reduce these imbalances. as a result the build - up in eme foreign assets have been held mainly as central bank reserves especially in asian countries ( chart 3 ). in total the foreign assets now held by eme central banks and governments is about $ 7 trillion dollars, which compares with only $ 60 billion gross foreign assets held by the uk government. many emerging economies concluded after the asian crisis a decade ago that they needed bigger liquid reserves in traditional government debt to defend themselves against volatility in financial markets even when that carried the likelihood of a negative return ( taking account of expected exchange the kuwait investment office is the in - house investment arm of the kuwait investment authority ( formerly known as the kuwait investment board ) and was established by sheikh abdullah al - salem al - sabah on 23 february 1953. edmund hillary and tenzing norgay reached the summit on 29 may 1953. these figures include the nics. excluding nics the estimated surplus is $ 596 billion ( 1. 1 % ). latest data show that current account deficits were 5 % of gdp or above not only in the united states but also in spain, greece, portugal, australia, new zealand, uk and iceland. rate movements ). but when the reserves outstripped the levels needed for that purpose, it was natural to look to increase the returns on investment by widening the range of investments. 5 and in the next few years, these current account surpluses are likely to remain high and the build up of foreign assets by governments in oil exporting and asian countries is likely to continue. according to the imf ’ s forecasts, the combined current account surplus of china and oil - exporting countries will be around $ 800 billion over the next 3 years. and the imf estimates that sovereign wealth fund assets could grow to $ 6 - 10 trillion within the next 5 years. the impact of swfs on financial markets these are huge numbers and swfs have become prominent

and equity prices ", 31 may 2007. that said, the assets held by sovereign wealth funds are highly concentrated, with around 70 % of total assets held by the five largest funds. so the largest sovereign wealth funds could have an impact on some markets especially smaller ones such as other emes. also, a number of central banks from countries with large current account deficits have been willing throughout the current liquidity crisis to lend to international banks, including uk ones, at longer, three - to - twelve month, maturities. market for public debt securities is only 3. 3 % of the global market, uk equities account for 7½ % of the value of global equities. the rapid growth in sovereign wealth funds is also a fillip for london as a leading international financial centre. swfs and transparency the main doubts concern their objectives and how far their investments will be driven only by financial returns. public sector owners might have other objectives including national political interests, such as, accessing military technology, controlling strategic resources or markets, and influencing public opinion. 9 there are often complaints that sovereign wealth funds lack transparency. decoded, this is a request for reassurance about their investment policies. i am certainly not going to argue against more transparency ( except in the very special case of the market operations of central banks ). more openness from swfs may help to alleviate concerns in recipient countries – and thus reduce protectionist pressures. and it may improve the dissemination of information to market participants and to their own citizens. i know many swfs are working with the imf to produce a voluntary code of conduct that is based on best practices for the governance and transparency of sovereign wealth funds. for example, it would be helpful if all sovereign wealth funds were transparent about their overall strategies, objectives and broad investment guidelines. norway ’ s government pension fund is a good example in this respect. but there should be a level playing field applied to all investors. the case for greater transparency applies to other investors too. swfs may take some comfort that they are not being singled out and that there are equally powerful pressures for transparency on hedge funds and private equity investors. in this respect, two recent initiatives are particularly welcome. first, a report under the chairmanship of sir andrew large – my predecessor as deputy governor for financial stability at the bank – on voluntary standards, including on disclosure, for hedge funds. and, second, a report by sir david walker – a former executive director of the