UPDATE 2-Singapore's GIC warns global recession, crisis likely
By Kevin Lim and Jan Dahinten
SINGAPORE, April 21 (Reuters) - Singapore's biggest sovereign wealth fund said on Monday a global recession was increasingly likely but defended its multi-billion dollar bets on Citigroup (C.N: Cotización) and UBS UBSN.VX as providing good long-term returns.
Sovereign wealth funds globally have poured billions of dollars into major U.S. banks reeling from writedowns linked to U.S. subprime mortgages, which have sparked a global credit crisis.
The Government of Singapore Investment Corp (GIC), which analysts estimate could manage as much as $300 billion, said the financial turmoil would leave markets extremely volatile over the next one to two years.
"The financial contagion has now spread beyond U.S. shores, increasing the likelihood of a global financial crisis and recession," Deputy Chairman Tony Tan said at GIC's inaugural staff conference on Monday.
"We could be facing a recession which is longer, deeper and wider than any recession we have encountered in the last 30 years," he said.
Tan made his comments at a staff conference to which the media had been invited. But, GIC declined to answer media queries.
The corporation, which says on its Web site that it manages "well above $100 billion", rarely communicates with the media but has made efforts in recent months to be more responsive. Continuación...