One of the major reasons why the current financial crisis is so threatening is the absence of what Tokyo-based investor Peter Tasker calls "strong hands"--long-term, patient, deep-pocketed investors that a teetering financial system needs to function in times of great uncertainty and stress. When Japan suffered its financial crisis in the 1990s, the strong hands that invested and kept the system afloat included private equity funds, insurance companies, and banks. But today, those financial actors are too leveraged, weak, or frightened to play a similar role. While most of the attention this week is focused on the Treasury's rescue plan, in fact, the U.S. government's ability to serve as the strong hands of the world is today constrained by both ideological resistance to government ownership of private sector assets, as well as the inconvenient truth that our government is the world's largest debtor.

But there is another source of funding able to take on the role of the strong hands needed to help bolster the financial system in this time of desperate need--sovereign wealth funds (SWFs). These investment funds were established by governments around the world, generally those whose central banks were so flush with cash that they needed to create new investment vehicles to deploy it all. Some, like those of Abu Dhabi, Singapore, and Norway, have been around for years. Others, like those of China and Russia, are relative newcomers. With SWFs currently believed to be managing over $3 trillion, what distinguishes them from central banks is that their mandate is to make just the kind of longer-term investments that today's financial crisis requires.

But the U.S. has done little to attract these investors--and in many cases, has pushed them away. With changing global dynamics encouraging SWFs to take their checkbooks elsewhere, the U.S. needs to act quickly and aggressively to attract its fair share of this much-needed capital.

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For some time now, many U.S. politicians have resisted SWF investment, asserting that the nature of their foreign-government ownership makes them uniquely susceptible to political influence. It was only a few months ago that Congress held seemingly endless hearings with legislators and experts alike expressing outrage and suspicion about the political, as opposed to purely commercial, motivations of SWFs. Earlier this year, it was SWFs, not Wall Street CEOs, who were the bogeymen of the global financial system.

Several months ago, as the current crisis was in its earliest days, SWFs from Singapore, Abu Dhabi, Qatar, Kuwait, and China stepped up and provided capital injections to several banks including Citigroup, Morgan Stanley, and Merrill Lynch. (Neither Bear Stearns nor Lehman received any SWF support and have since paid the ultimate price.) These deals were done on scrupulously commercial terms; but rather than being met with applause, they aroused sharp concern among many U.S. policy-makers, troubled that foreign government entities were taking ownership positions in the backbone of the U.S. financial system "Will we sit back and let the [SWFs] of the world fire at will, claiming our assets and extirpating our businesses?" asked Ohio Congresswoman Marcy Kaptur earlier this year.

Now, many experts are arguing that SWFs may be among the only forces that can save the U.S. and global economy, to the extent that last week, Britain's secretary of state for business, Peter Mandelson, suggested that SWFs ought to be called savior wealth funds. But at the time when we need them most, SWFs are looking elsewhere.

SWFs that invested in American banks before the financial crisis have taken a huge hit; The Abu Dhabi Investment Authority currently shows a paper loss approaching $3 billion on its investment in Citigroup, and China's CIC has racked up a loss of over $1.25 billion in Morgan Stanley. This poor performance of SWFs met raised eyebrows back home, where leaders of otherwise un-democratic countries found themselves answering harsh questions from their own citizens.

So, with the current markets uncertain and political pressure being applied from both sides, most SWFs appear to be sitting this one out. Financial circles abound with stories of American bankers and fund managers heading to the Persian Gulf seeking a lifeline and coming back empty-handed. Bader al Saad, the managing director of the Kuwait Investment Authority, recently made the point bluntly: "We are not responsible for saving foreign banks. This is the duty of the central banks in these countries. We have social and economic responsibilities towards our own country." KIA has already taken a $270 million loss on its Citigroup investment.

Those SWFs that are prepared to deploy their cash abroad today appear to be doing so not to save the system, but to try to profit from the shell-shocked, cash-starved investing universe paralyzed with asset prices in disarray. Bahrain's Investcorp, for example, recently launched a $1-billion investment vehicle backed almost entirely by SWF cash from the Gulf. The stated goal of this fund is not to recapitalize troubled banks, but rather to purchase at a deep discount the very same distressed loans and structured real estate credits (a.k.a. "toxic securities") that are a principal cause of the unfolding crisis.

Similarly, a senior advisor to the Russian president recently spoke of the "unique chance" that Russia has to exploit the international financial crisis by using money from its government reserves to help Russian companies purchase stakes in foreign firms whose share prices have fallen. It appears that SWFs may have taken us at our word when we insisted that they should invest for purely financial reasons.

And with the U.S. at the center of the current crisis, it's not entirely irrational for SWFs to expand their horizons and more aggressively deploy their funds domestically, regionally, and on a more diversified international basis. Many SWFs have also decided to re-direct investment to address pressing domestic issues. For example, a number of Gulf-based SWFs, recognizing the inability of their countries to produce enough food for their own citizens, have embarked on a food security investment strategy, pumping billions of dollars into agricultural projects in countries like Vietnam and Cambodia. "There are a lot of other compelling places to look for investments these days," noted Sameer al Ansari of Dubai International Capital, which earlier this year shifted its primary focus to Asia.

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If the U.S. does not come to grips with the positive role that SWFs can play in this crisis, it risks losing one of the most important sources of capital available to stabilize the situation. With SWFs already looking elsewhere, there is little time for the ambivalence the U.S. has showed up until now. Countries such as Great Britain recognized the increasingly competitive global environment well before the current crisis and eagerly put out the SWF welcome mat; as U.S. politicians questioned the motives of China's SWF, the British sent their prime minister and Chancellor of the Exchequer to ask them to locate their international headquarters in London.

This coming week, the world's finance ministers, central bankers, and financiers will gather in Washington for the annual meetings of the IMF and World Bank. On the agenda will be a recently agreed set of guidelines intended to govern the investment activities of SWFs. These Generally Accepted Principles and Practices (GAPP) are the result of many months of negotiations among the largest SWFs and recipient countries. A central component of the GAPP, which the U.S. pushed hard for, is a commitment on the part of SWFs that they will eschew all political considerations in making their investment decisions and focus exclusively on financial ones--an ironic constraint, considering how much we would welcome politically motivated investments in our economy right now.

If the U.S. wants to maintain its critical role in the world's financial system, it is going to need a little help from its friends. We don't need to go hat in hand, but should make it clear to SWFs that, assuming they play by the rules, their investments are welcome in our country. Americans should be comforted that, as regards SWF investment, our country's national security interests are already the best protected and most well-regulated of any industrialized country. Last year's Foreign Investment and National Security Act created new, strict procedures specifically allowing for scrutiny of SWF investments. But while most SWFs may still believe that the centrality of the U.S. role in the global financial system is worth preserving, many fear the uncertainty and political risk that accompany equity investments in our financial sector, still cringing at the memory of the 2006 Dubai Ports incident.

As the world's financial system experiences sharp capital constraints, those with long-term, patient capital are in increasingly short supply. There's a saying in financial circles that, in times of crisis, "cash is king." So at times like these, when cash is sovereign, we might be well-served to resist protectionist rhetoric and encourage, not shun, sovereigns with cash.