Sovereign funds code may not be ready by Oct - IMF

NO CODE: The world's sovereign wealth funds may not agree to code of conduct by October, says the IMF. (Getty Images)

The world's sovereign wealth funds (SWFs), which control an estimated $3 trillion in assets, may not agree to a code of conduct by October as planned, a top International Monetary Fund official was quoted as saying.

The IMF has said it expects to produce a set of generally accepted principles for the non-binding code in time for its October 11 meeting in Washington.

"For now, it's hard to say whether this will happen (by October)," John Lipsky, the IMF's deputy managing director told Russia's Vedomosti newspaper in an interview, adding that there was still hope.

"When you talk about a code of conduct, some funds are worried that someone wants to tell them what to do. But we are not talking about that ... The funds are interested in the creation of such a document as it is useful in itself and it guarantees them access to the market on fair terms," he said.

Sovereign wealth funds from Asia and the Middle East have gained prominence in recent months following their multi-billion-dollar bailouts of Western banks such as Citigroup and UBS.

The huge investments by SWFs, which tend to be secretive like private equity and hedge funds, have however raised concerns in the West that strategic assets such as banks and energy firms may end up in the hands of foreign governments.

Lipsky said the IMF's role in the financial crisis was to "restore economic and financial stability".

"We hope that the worst of the crisis is behind us, but it is too soon to say that for sure," he said.

He said US economic growth would probably not return to a normal pace any sooner than the second half of next year. (Reuters)

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