Gulf sovereign wealth funds exercise financial muscle

The Gulf States may be diversifying risk by spending their oil riches overseas, but they are also provoking an ambivalent response from the West.

Surging oil prices have given Middle East producers renewed financial muscle. More worryingly for some Western leaders, they are showing a confidence, bordering on brazenness, to exercise that strength by buying up stakes in key industries throughout the world at a time when the financial power of Western banks has been neutered by subprime and the credit crisis.

The most recent and visible of the conduits for those investment outflows, the sovereign wealth funds...

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