Malaysia is becoming the poster-child for the crisis in Emerging Markets. The rising tensions between people and government and how things are all connected are clearly being demonstrated by this story developing within the emerging markets. In Malaysia we hear the Central Bank is recommending criminal prosecutions in connection with the controversial investment fund 1MDB – the BBC reported. 1MDB was a sovereign wealth fund which was set up by Malaysian Prime Minister Najib Razak, and invested nearly $1.83bn abroad without using proper procedures. The investment bank Goldman Sachs is at the center of the criminal investigation in Malaysia since it organized 1MDB to raise U. S. dollar debt to finance acquisitions of power plants. The currency swap from dollars was also done by Goldman Sachs.
This post was published at Armstrong Economics on October 12, 2015.