Heidi Crebo-Rediker: All Publications, Events and Press

NY Event: It's the Economic Recovery Plan, Stupid

Communications — Thu, 22 May 2008 04:30:00 -0400

A New America Event
05/22/2008 - 8:30am

As the debate on the economic slowdown moves from "if" to "when" to "how long," The New School's Schwartz Center for Economic Policy Analysis (SCEPA) and the New America Foundation will host a panel of top economists and business executives to discuss the best plan for an economic recovery.

Space is limited, please RSVP to specialevents@newschool.edu or (212) 229-5662 x 3570.

Watching Sovereign Wealth

Ron Tang — Thu, 28 Feb 2008 00:00:00 -0500

When the adjectives most often used to describe you are "secretive," "opaque" and "mysterious," you've got an image problem. Such is the predicament of sovereign wealth funds, the government-controlled investment vehicles, often in authoritarian states, that have become the bane of Western politicians. Yesterday, the European Commission became the latest body to propose transparency guidelines for these funds.

But the good news for sovereign wealth funds is that increased disclosure and transparency may actually be a win-win for everyone. A little openness can go a long way.

Market participants and regulators would benefit by gaining some insight into potential contagion risks and… more

Mission Accomplished

Articles — Thu, 15 Nov 2007 17:30:00 -0500

Perhaps it's time to add the European Bank for Reconstruction and Development to that list of things that, like houseguests and fish, can overstay their welcome. The bank now strays so far from its original remit that it risks spoiling the legacy of its earlier successes. The EBRD should quit while ahead, declare victory and be privatized.

At its pinnacle, the EBRD was a triumph of financial statecraft. Established in 1990 with funding from the U.S., the EU and other governments, it provided financing to companies in postcommunist Central and Eastern Europe at a time when the private sector shunned them.… more

Douglas Rediker in CQ Weekly on Sovereign Wealth Funds

Communications — Sun, 04 Nov 2007 13:25:00 -0500

New America in the News:

Last week, the New York hedge fund Och-Ziff Capital Management disclosed that it was selling a $1.3 billion ownership stake to an investment firm controlled by the government of Dubai. In September, another Dubai-controlled fund announced that it was buying about a fifth of the Nasdaq stock exchange. A Chinese government bank just entered into a partnership with the investment bank Bear Stearns Companies Inc. And the Blackstone Group private equity firm recently sold a $3 billion ownership stake to China's state investment company.

Flush with cash thanks to big trade surpluses and high oil prices, some foreign governments are looking for new ways to invest. Instead of playing it safe and buying U.S. Treasury securities, many are using special investment arms known as sovereign wealth funds to take ownership stakes in U.S. companies in such sectors as financial services and technology to maximize their returns. Many of the deals will not be subject to government review because, while the dollar amounts are large, the purchasers won't be controlling the companies.

The buyout activity is nonetheless posing a dilemma for Congress, which just addressed concerns about foreign investment that grew from a deal last year, quickly scuttled, that would have given a firm linked to the Dubai government control of operations at some U.S. ports. Last month a new law took effect to strengthen and clarify the rules governing the Committee on Foreign Investment in the United States, or CFIUS, a panel of executive branch agencies that screens the sale of American businesses to foreign interests; the Bush administration is now developing regulations to implement it.

The rapid growth of sovereign wealth funds is prompting some U.S. officials and policy experts to question whether the nation needs to consider more safeguards -- or at least a more consistent approach to regulating foreign acquisitions that would both assuage national security concerns and enable foreign investors to know what to expect when they contemplate making a deal in the United States. ...

So far, members of Congress have primarily focused on individual deals. That will have to change, said Douglas Rediker, a global finance expert at the New America Foundation, a public policy think tank. Sovereign wealth funds bring "this whole level of influence that's brought to bear on the markets as a whole, that involves currencies and the subtleties of specific investments and broader investment classes," he said. "That traditionally has not been within the realm of what Congress deals with." ...

Rediker notes must purchasers in several high-profile deals, including the Chinese purchase of part of Blackstone and the agreement between Dubai and Och-Ziff, each took 9.9 percent stakes of the U.S. firm. He speculates that the acquiring companies reasoned that a 10 percent stake constituted a de facto threshold for heightened scrutiny.

Rediker and his wife, Heidi Crebo-Rediker, recently wrote a paper arguing that the United States needs a comprehensive review of all its legislation and regulations governing foreign investment, then needs to develop a policy for monitoring foreign government investments smaller than the "controlling" interest that triggers a CFIUS review.

The Redikers contend that this would not scare away foreign investors but encourage more deals, as long as funds were certain about the treatment they would receive.

"You put some vigorous rules in place, but they are absolute, so people know [if] they make X investment, there's going to be Y result. Right now the area below which a full-blown CFIUS review is triggered is fraught with political risk, and political risk takes its toll on investment," Douglas Rediker said. ...

For the complete article, please visit CQ.com. (subscription only)

Doug Rediker and Heidi-Crebo Rediker Highlighted in National Journal

Communications — Sat, 03 Nov 2007 07:54:00 -0400

New America in the News:

Remember the slogan about Bill and Hillary Clinton in the 1992 presidential race -- two for the price of one? The New America Foundation seems to be getting something similar with the hiring of husband-and-wife tandem Douglas Rediker and Heidi Crebo-Rediker (although they'll both get paid at the think tank). The Redikers, former investment bankers in Europe, have returned to the United States to co-direct the foundation's Global Strategic Finance Initiative. The couple met in Washington about 20 years ago. After Douglas worked in Hungary and Heidi worked in Russia, they married in London, where they have spent the past 16 years working for Merrill Lynch and Lehman Brothers, among other firms. ...

At New America, the Redikers will have their hands full explaining the pace of financial markets to Washington legislators and regulators. "Policy makers still operate under a time consideration that is much more deliberative," Douglas says. "Markets operate in seconds."

For the complete article, please visit The National Journal website.

New America Foundation Launches Global Strategic Finance Initiative

Communications — Thu, 18 Oct 2007 11:10:00 -0400

The New America Foundation is pleased to announce its launch of the Global Strategic Finance Initiative. The Initiative, co-directed by Douglas Rediker and Heidi Crebo-Rediker, is sponsored by the Economic Growth Program and American Strategy Program. The Global Strategic Finance Initiative will address the fast changing relationship between global capital flows, financial markets, foreign policy and national security.

“We believe that in the global era, the creative use of financial tools may prove every bit as important to national security as traditional diplomacy and military power,” said Steve Clemons, the Director of… more

Inside Track: The Financialization of Foreign Policy

Articles — Wed, 17 Oct 2007 08:29:00 -0400

Over the first half of 2007, central banks in the world’s emerging economies accumulated over $600 billion of new reserves. That’s double the total reserve position of the International Monetary Fund (IMF) -- an institution whose mission used to include preventing the collapse of these same governments, and whose new managing director recently raised questions about the body’s “relevance and legitimacy.” Over the same period, China, Russia and Japan joined the list of governments establishing “sovereign wealth funds”, whose worldwide assets now approach $3 trillion. The U.S. Treasury, meanwhile, is focusing its attention on the Strategic Economic Dialogue with China,… more

Foreign Investment and Sovereign Wealth Funds

Economic Growth — Wed, 03 Oct 2007 11:02:00 -0400

The amount of money now held by governments around the world both in reserves and through sovereign wealth funds (“SWFs”) represents the largest concentration of investment capital the world has ever known. Their sheer size and expected rate of growth raise important issues regarding both the origin of this wealth and how it is to be invested. The origin of these funds rests on two main factors: the global imbalances between debtor nations (like the U.S.) and surplus nations (like China), and the rise of state-owned commodity (oil) funds. As for their uses, these countries have built up sums… more

Capital Warfare

adminn — Thu, 29 Mar 2007 12:56:00 -0400

With Iraq, Afghanistan and the war on terror dominating headlines in Washington these days, there's a real danger that U.S. policymakers will lose sight of the other major war currently being fought around the world -- the war for capital. While other countries are fighting with all they've got, many in the U.S. remain complacent, indifferent or antagonistic. Big mistake. There's a clear relationship between global financial leadership and global influence, and if history is any guide, Americans can't assume that today's financial powerhouse will be tomorrow's.

The war for capital is a three-front battle, encompassing competition among sources, markets and… more