Taiwan studies setting up sovereign wealth fund
By Doug Young
TAIPEI (Reuters) - Taiwan's state planning body will on Wednesday discuss establishing a sovereign wealth fund as a vehicle for government investment, mirroring a trend among emerging economies aimed at wringing value from national savings.
The Council for Economic Planning and Development still has a number of issues to consider before making any final plans, Vice Premier Paul Chiu told reporters.
"Sovereign wealth funds are used by many countries. The CEPD will invite relevant experts and academics for a complete discussion," said Chiu.
"Of course this will help the economy, but effective mechanisms to address management and transparency must be established."
Taiwan's foreign exchange reserves, a likely source of money for such a fund, stood at $282 billion at the end fo August, one of the largest forex reserves in Asia behind China and Japan.
Taiwan's central bank issued a statement saying Governor Perng Fai-nan had discussed the issue of setting up such a fund on Tuesday with an economic task force headed by Vice President Vincent Siew.
Such a fund could contain at least $15 billion, the Chinese-language Commercial Times reported, without citing sources.
Setting up such a fund would mirror a growing trend among emerging economies in Asia and the Middle East, as governments look for more effective ways to invest their national savings other than leaving them on deposit or buying low risk securities.
One of the most notable of those has been China, which set up China Investment Corp. a year ago to generate higher returns on $200 billion of the country's official foreign reserves.
Since its establishment, CIC has drawn global attention as it looks for good investment opportunities.
The fund's investments include a 9.9 percent stake in Morgan Stanley (MS.N) purchased last December, amid recent talk it may try to increase that investment. CIC has also invested in U.S. private equity house Blackstone (BX.N).
(Editing by Keiron Henderson)
