Singapore wealth fund warns against lowering US bond ratings

A top official at Singapore sovereign wealth fund GIC feels the world could face another major financial and economic crisis if the United States loses its AAA sovereign rating.

"We face the possibility of another major financial and economic crisis if the world's risk-free asset, hitherto U.S. bonds, loses its AAA credit rating in a disorderly manner," GIC Deputy Chairman Tony Tan said at a conference to mark the fund's 30th anniversary.

GIC, also known as the Government of Singapore Investment Corp, manages around $300 billion in assets and is one of the world's largest sovereign wealth funds. About 36 percent of its funds were invested in the United States as of March 2010, according to GIC's last report.

The U.S. budget deficit totaled $871 billion for the first seven months of this fiscal year, significantly above the previous year's pace, the Congressional Budget Office said on Friday.

The full story is available at Reuters.com.

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