The most telling commentary though is not the fearful whinging about new regulatory needs or challenges to Western capitalism, rather it is the bolded portion below:

So far, the evidence shows that petrodollar sovereign wealth funds and Asian central banks have focused on returns and “acted cautiously and discreetly” to avoid moving prices, according to the report.

However, some funds in oil-exporting regions have signalled their intent to shift away from being largely passive investors to taking larger equity stakes in foreign companies.

The collective impact of this breed of investors also poses new risks to the global financial system. For instance, the liquidity provided by Asian central banks and petrodollar investors may be fuelling asset price bubbles in some markets, such as real estate, and are enabling excessive lending.

Buying in to assets high, never a very good strategy for making money. I again return to the memories of the squeeling that went on in NY (when I was based there) when the Japanese bought Rockefeller Center.

Got bloody soaked.

Sov funds, I rather suspect more a threat to their owner's long term wealth than global Western style capitalism.

Of course, I rather suspect that the same is true for the institutionals placing money in mega "Emerging Markets" investment funds as hinted in Private equity must delve a little deeper into Asia; quite simply the only way to really invest in "frontier markets" like India, MENA is via smaller funds - or be looking at infrastructure or other quasi PE plays.

Not directly related, but throwing in for attention: Dubai boom in property starts to cool