A senior European Union official today said unease over the growing role of sovereign wealth funds in the global economy is overblown and misplaced, but urged funds to back plans for a code of conduct to help prevent a swing against their investment activities.

Peter Mandelson, the EU trade commissioner, told sovereign wealth fund managers in a speech at the Organisation for Economic Co-operation and Development in Paris today: “A lot of the anxiety about sovereign wealth is substantially misplaced, because the risks attached to the funds can be overstated and our capacity to manage any likely risk is probably understated.”