No one commonly accepted definition of SWFs exists, although the feature of a government-controlled or government-managed pool of assets is a part of most definitions. Government officials and private researchers use varying characteristics to categorize SWFs, and depending on the source and primary defining characteristic, different types of funds may be included or excluded. Definitions have been developed by Treasury, IMF, and private researchers. Some definitions include pension funds or investments made from foreign currency reserves maintained in central banks. An explanation of how we chose funds to include in our analysis is in appendix I. Countries that are major exporting nations or natural resource providers may accumulate large amounts of foreign currency reserves through the sale of their manufactured goods or natural resources to other nations. While all countries need some amount of foreign currency reserves to meet their international payment obligations, in some cases countries may accumulate currency reserves in excess of the amounts needed for current or future obligations. Some countries invest their foreign exchange reserves in assets such as the sovereign debt of other countries, including securities issued by Treasury to fund U.S. government operations. However, some countries have formed SWFs to invest a portion of their excess foreign currency reserves in assets likely to earn higher returns, such as the equity shares issued by foreign publicly traded companies. Some countries with current account (a broad measure of international flows that includes trade balances) surpluses have created SWFs. These include countries that are major exporters of commodities or natural resources, such as oil, as well as those, such as China, that are exporters of manufactured goods. In contrast, as the world’s largest importer of goods and natural resources, the United States has run increasingly large current account deficits since the early 1990s. The current account deficit of the United States was $731.2 billion in 2007, whereas Asian countries with SWFs had a combined current account surplus of over $400 billion and oil-producing countries with SWFs had a combined surplus of about $338 billion (see fig. 1). These current account surpluses have led to a buildup of foreign currency reserves in some countries. Since 1995, currency reserves in industrial economies have more than doubled and currency reserves in developing economies have increased sevenfold. Foreign currency accumulation has been especially large among oil-producing countries and Asian countries with large trade surpluses, especially with the United States. China, Korea, Japan, and Russia hold the largest quantities of foreign currency reserves. Asian exporting countries’ combined current account surpluses grew from $53 billion in 2000 to $443 billion in 2007. Currency reserves have accumulated in SWF countries (see fig. 2). The U.S. dollar accounted for slightly less than two-thirds of total central bank foreign reserve holdings of all countries as of the first quarter of 2008. For oil-exporting countries with SWFs, which include some nations in the Middle East, as well as Norway and Russia, oil revenues remained relatively stable from 1992 to 1998. But in 1999, oil prices—as measured by the annual weighted world average price per barrel—began to rise (see fig. 3). Consequently, oil revenues have increased 561 percent for the major exporting nations from 1992 to 2006, the year for which the latest data were available. These revenue increases have occurred as the price of oil per barrel has increased from $23 in January 2000 to well over $100 in the first half of 2008, including over $137 in July 2008. An interagency group is responsible for reviewing some foreign investment transactions in the United States. CFIUS, initially established by executive order in 1975, reviews some foreign investments in U.S. businesses, including some investments by SWFs. Section 721 of the Defense Production Act authorizes the President to suspend or prohibit mergers, acquisitions, or takeovers that could result in foreign control of a U.S. business if the transaction threatens to impair national security. The President delegated his section 721 authority to review individual transactions to CFIUS. CFIUS and its structure, role, process, and responsibilities were formally established in statute in July 2007 with the enactment of the Foreign Investment and National Security Act (FINSA). FINSA amends section 721 of the Defense Production Act to expand the illustrative list of factors to be considered in deciding which investments could affect national security and brings greater accountability to the CFIUS review process. Under FINSA, foreign government-controlled transactions, including investments by SWFs, reviewed by CFIUS must be subjected to an additional 45-day investigation beyond the initial 30-day review, unless a determination is made by an official at the deputy secretary level that the investment will not impair national security. CFIUS reviews transactions solely to determine their effect on national security, including factors such as the level of domestic production needed for projected national defense requirements and the capability and capacity of domestic industries to meet national defense requirements. If a transaction proceeds to a 45-day investigation after the initial 30-day review and national security concerns remain after the investigation, the President may suspend or prohibit a transaction. According to Treasury, for the vast majority of transactions, any national security concerns are resolved without needing to proceed to the President for a final decision. The law provides that only those transactions for which the President makes the final decision may be disclosed publicly. Information about SWFs publicly reported by SWFs, the governments that control them, international organizations, and private researchers provides a limited picture of their size, investments, and other descriptive factors. Our analysis found that the amount and level of detail that SWFs and their governments report about their activities vary significantly, and international organizations that collect and publish various statistics about countries’ finances do not consistently report on SWFs. As a result, some of the available information about the size of certain of these funds consists of estimates made by private researchers. Based on a combination of data or estimates from these various sources, SWFs currently hold assets estimated to be valued from $2.7 trillion to $3.2 trillion. Several researchers expect SWFs to grow substantially in the coming years. In our analysis of the publicly available government sources and private researcher lists of SWFs, we identified 48 SWFs across 34 countries that met our criteria. These include funds from most regions of the world. Of the 48 SWFs we identified, 13 were in the Asia and Pacific region. Ten were located in the Middle East, with the remaining 25 spread across Africa, North America, South America, the Caribbean, and Europe. Some countries, such as Singapore, the United Arab Emirates, and the Russian Federation, have more than one entity that can be considered an SWF. Some SWFs have existed for many years, but recently a number of new funds have been created. For example, the Kuwait Investment Authority and the Kiribati Revenue Equalization Reserve Fund have existed since 1953 and 1956, respectively. The Kuwait Investment Authority was founded to invest the proceeds of natural resource wealth and provide for future generations in Kuwait, and the Kiribati Revenue Equalization Reserve Fund was formed to manage revenues from the sale of Kiribati’s phosphate supply. However, since 2000, many commodity and trade- exporting countries have set up new SWFs. These funds have grown as a result of rising exports of commodities such as oil, whose prices have also risen. Of the 48 funds we identified, 28 have been established since 2000 and 20 of these can be classified as commodity funds that receive funds from selling commodities such as oil (see fig. 4). Based on our review of public disclosures from SWFs on government Web sites, we determined that the extent to and the level of detail at which SWFs publicly report information on their sizes, specific holdings, or investment objectives varied. Based on these reviews, we found that 29 of 48 funds publicly disclosed the value of assets since the beginning of 2007. According to documents published by the countries, 17 of these 29 report asset figures that are subject to an annual audit by either an international public accounting firm or by the country’s national audit agency. In total, 36 of the 48 funds provided publicly reported size estimates, though some date back to 2003. While most provided a specific value, 2 reported only a minimum value. Among the largest 20 funds, 13 publicly reported total assets. Of the funds in our analysis, 24 of 48 funds disseminated information on fund-specific sites and 21 used other government Web sites, such as those belonging to the finance ministry or central bank. Thirty funds reported at least some information on their investment activities. Of the largest 20 funds, 12 reported this information. Only 4 of the 48 funds fully disclose the names of all the entities in which they have invested. The level of detail reported by others’ funds varied. For example, 21 funds reported information about some of their investments, such as the names of their significant investments, while others disclosed only the regional breakdown of their holdings or gave only general statements about the types of assets and sectors in which they invested or planned to invest. These assets usually included equities, bonds, real estate, or other alternative investments. We found that about 77 percent of the 48 SWFs publicly reported the purpose of their funds, with 13 of the largest 20 funds doing so. In many cases, fund purposes included using the country’s financial or natural resources to earn investment returns intended to benefit the country in various ways, including providing income for future generations, balancing the government’s budget, or preserving foreign currency purchasing power. The information publicly reported about SWFs varies in part because of different disclosure requirements across countries. The nature, frequency, and content of any SWF information are reported at each country’s discretion. Some countries may restrict the type of reporting that can be released. For example, according to documents published by the government of Kuwait, Kuwaiti law requires the Kuwait Investment Authority to submit a detailed report on its activities to the Kuwaiti government authorities, but prohibits it from disclosing this information to the public.