His proposed remedy: a code of conduct. "I'm baffled by why SWFs don't get together and put an end to all this discussion by agreeing on some piece of paper that says: We're under no circumstances going to speculate in currencies; we're always going to be a long-term investor; we're never going to use our SWF to pursue any political objective."
The SWF managers protested, as one, that since they had never engaged in any of the activities that Summers expressed concern about, there was no reason to try to regulate them so. "You're talking about how to pre-emptively regulate something that may happen," said Muhammad Al Jasser of Saudi Arabia.
Yes, we are talking about pre-emptive regulation - you don't wait for sovereign fund to exercise political control and then try to legislate, that's just retarded (even if it is the status quo). What's even more amusing is that if these funds already are not engaging in these activities, they they're already compliant with the proposed code of conduct! Oh, wait ...
"We've had a lot of resistance to regulating the hedge funds, and the rating agencies, even though there were failures galore. So, let's be a little bit more balanced." Touché! Kristin Halvorson of Norway responded that while Norway would appreciate having some common rules, the hypothetical examples Summers cited "would never be possible in Norway."
Summers responded with an anecdote about how the Norwegian fund had sold short the shares of Icelandic banks, and the potential political complications those actions raised.
Yes, capitalism in the end does mean we're all just greedy fucks making a beast with [green]backs.
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