Foreign investors in U.S. boardroom
As Americans back away from banks and financial institutions, foreign investors are stepping in. But the leverage these shareholders can have in U.S. boardrooms is a politically-charged issue. Janet Babin reports.
A Chinese investor walks past a stock price board. (Mark Ralston/AFP/Getty Images)
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Scott Jagow: What do China, Abu Dhabi, and the Singapore government have in common? They've all bought stakes in American banks recently. Pretty soon, you can add Kuwait to that list. It's sitting on more than $213 billion it would like to invest. From North Carolina Public Radio, Marketplace's Janet Babin reports.
Janet Babin: Americans are backing away from banks and financial institutions. Subprime losses there are expected to reach hundreds of billions. But the Kuwait Investment Authority's a buyer.
Joel Kurtzman's a senior fellow at the Milken Institute. He says Kuwait and other foreign government-linked funds think these U.S. firms are undervalued.
Joel Kurtzman: The biggest problem is a lack of confidence among U.S. domestic investors, not the problems in the market. And seeing confidence exhibited by foreign investors is a good sign.
But to some skeptics, it's a sign that foreign governments could wield too much leverage in U.S. boardrooms.
Economist David Hale says it's a politically-charged issue:
David Hale: It raises eyebrows, but we're allowing it to happen because they're simply going to be a large shareholder. They won't control management.
Hale says without other options, Americans might have to get used to having foreign investors around.
I'm Janet Babin for Marketplace.
