In the wake of the subprime mortgage crisis, a number of the largest U.S. banks have turned to sovereign wealth funds--the investment arm of cash-rich foreign governments--for large capital infusions to mend their troubled balance sheets. Additional large infusions of resources, which are to be expected as the subprime crisis continues, would further increase the voice of the sovereign wealth funds on U.S. bank boards. These trends raise fundamental political questions as to the conditions under which foreign investment in the U.S. banking system should be permitted, especially from countries like China and Russia.

At this event, Eric Altbach, vice president for economic and trade affairs at the National Bureau of Asian Research; Randal Quarles, who served at the Treasury Department as the under secretary for domestic finance and the assistant secretary for international affairs, as well as the U.S. executive director of the International Monetary Fund; Patrick A. Mulloy, a member of the U.S.-China Economic and Security Review Commission and former assistant secretary of the Department of Commerce’s International Trade Administration for market access and compliance; and Edwin M. Truman, also a former assistant secretary of the treasury for international affairs, will discuss the fundamental issues of investment policy raised by sovereign wealth funds. Desmond Lachman of AEI will moderate.