The origin and rapid growth of Sovereign Wealth Funds (SWFs) is closely linked to the prevailing global macroeconomic imbalances. SWFs have undoubtedly brought a number of benefits to the global economy. But SWFs have also given rise to considerable political controversy, as their rapid rise challenges some long-held assumptions about how the global economy works. As a consequence, the investment activities of SWFs run the risk of triggering a vicious cycle of financial protectionism. To avoid such an outcome, SWFs should work with the governments of the leading mature economies to agree on a code of conduct or a set of guidelines for the activities of SWFs. These guidelines need to ensure that SWF investment activities are not motivated by political objectives and that a resurgence of state ownership in our economies is precluded. The institutional design of modern central banking can offer some clues as to the appropriate governance arrangements to ensure the former.