"Truly scary . . . I could readily envision the abuses that might occur under a Richard Nixon or a Lyndon Johnson." That was Alan Greenspan's take on the dangers of the US government investing in public equities. In 1999 President Bill Clinton, faced with the (illusory) prospect of paying down the public debt, proposed a $700bn investment fund. It would have been run at arm's length from the state, but Mr Greenspan did not like the idea. He told Congress that it was not "politically feasible to insulate such huge funds from government direction". The president abandoned his plan soon after.

Roll forward to today and Mr Greenspan's objections to governments punting on shares have gone out of fashion. In spite of hostile reaction from some quarters, recent forays by foreign governments into equities have been broadly welcomed. That partly reflects realism: trade imbalances make such inflows inevitable and western banks need capital. Investments this year in western financial stocks also represent less that 1 per cent of US market capitalisation. Some "industrial" stakes bought by Middle Eastern and Chinese companies have won them governance rights (Fortis and Barclays have each ceded a board seat). But sovereign funds have so far been pretty passive.