US Treasury official voices SWF stability fears

Sovereign wealth funds pose a threat to financial stability, says David McCormick, the under secretary for international affairs at the US Treasury.

"Sovereign wealth funds can represent large, concentrated and often non-transparent positions in certain markets and asset classes," McCormick told Congress on Wednesday. "Actual shifts in their asset allocations could cause market volatility. Even perceived shifts or rumours can cause volatility as the market reacts to what it perceives sovereig