Ready for sovereign funds?

What are sovereign wealth funds (SWFs)?

These are assets held by governments in foreign currency. When a country accumulates more forex reserves than it feels it needs, it can create an SWF to manage these "extra" resources.

How many countries have such funds?

Currently, over 20. Half-a-dozen more are keen to set up one. Norway has a large SWF, as do places as disparate as Alaska, Canada, Russia, and Trinidad & Tobago.

What is their total size worldwide?

The current total, as estimated by the International Monetary Fund’s quarterly magazine in September 2007, is $3 trillion. It could reach $10 trillion by 2012.

Is India ready for an SWF?

The government has not yet decided on setting up such a fund. But burgeoning forex reserves and the low returns they generate have put pressure on the RBI and the government to consider setting up one.