Western countries, especially the US, have reason to be grateful for sovereign wealth funds, since the latter have recently invested some $75bn in the equity of banks damaged by the subprime mortgage crisis. If foreign governments had not put in this money, western governments would have faced a dilemma: either put in capital themselves or tolerate a still sharper credit squeeze. Yet, however grateful recipient countries should be, they can still legitimately seek to agree guidelines on how these funds are to behave.

With about $2,500bn already and more to come, these funds will become ever more significant. They are an inevitable consequence of the huge current account surpluses accumulated by oil exporters and a few high-saving countries in east Asia, notably Singapore and China.