Marsh on Monday: Sovereign funds may help emerging markets break free of Western capital flows

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Southeast Asians remain wary of relying on the International Monetary Fund for capital during financial crises.

TOKYO (MarketWatch) — Sovereign funds are weighing the benefits of cooperating more widely with multinational institutions to encourage cross-border capital flows and foster more sustainable growth, particularly in emerging markets.

These suggestions for increasing the reliability of cross-border sources of finance and adding to international and regional safety nets could encourage emerging-market economies to speed up and maintain relatively open systems for capital flows. They would be in the interest of sovereign funds by contributing to open capital markets and raising investment returns — and would be generally beneficial by reinforcing market resilience in the face of worldwide political uncertainties.

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