In two posts on the Oxford SWF Project blog, there is discussion of sovereign wealth funds cooperating with one another. The first points out that research has shown that SWFs investing locally have a slightly higher return presumably because of information asymmetries, so some SWFs are joining "two or three funds with diverse backgrounds into a single cooperative entity so as to maximize the effectiveness of the investment function in a specific economic geography (region, industry, asset class, etc.)."

The second post addresses the concern that funds working in concert could extend their political influence, but conclude that "recent examples of SWF cooperation seem to be based on commercial criteria exclusively."

For additional background, Qn talked with Larry Summers about these concerns and more.

Simon Johnson writes in the Baseline Scenario blog that the "official view" of the global economic crisis is that it was created by an unfortunate confluence of rare events and is best fixed by bailouts and support of the financial sector. Johnson goes on to describe a second view, "If the size, nature, and clout of finance is the problem, then…pumping resources into the financial sector delays the day of reckoning and likely increases its costs. More likely, the Mother of All Bailouts is storing up serious problems for the near-term future."

The Financial Times has an article on rising salaries in the banking sector. "In spite of the troubled environment, market rates for bankers have been running close to the boom-time highs of two years ago." It goes on to explain that the phenomenon is "partly driven by a need to hold on to good staff – and partly to offset the threat of bonus taxes or caps in the US – UBS, Merrill and Morgan Stanley have all increased their basic pay substantially. Citi now plans to do the same."