They are anticipating a "more normal world", in which pension funds can meet their obligations by holding safe but rewarding assets in countries they know well.
China's private investors would probably buy more rewarding assets than its central bank, which has mostly limited itself to safe, low-yielding securities.
It can borrow "short" from emerging countries, satisfying their demand for safe, liquid securities, even as it invests "long" in riskier but more rewarding assets overseas.The world's venture capitalistTo some extent it already does.
Larry Summers, Harvard's departing president and a former treasury secretary, thinks the IMF could offer its services as an international fund manager, pooling official reserves in a more rewarding portfolio of assets.
Why not set it the simpler and more rewarding task of tracing the assets of the people whose irresponsibility and personal greed led to the collapse of the institutions where money was thought to be safe?
At the tail end of the housing bubble FORBES ran a story, "Paying for Failure" (May 19 , 2008, that profiled firms we believed wasted assets by richly rewarding CEOs, regardless of how investors fared.
It's not rewarding a bank for its own asset portfolio.
This is hard to do without rewarding shareholders and bank executives, overpaying for bad assets, and infuriating the public, but Geithner believes that he has found a way around these challenges.
The fund has 14% of its assets in this volatile, but potentially very rewarding, market.
By propping up asset prices artificially, some complain, central bankers are stoking inequality, rewarding financial firms despite their past misdeeds and sowing the seeds of the next crisis.
