Archbishops condemn City traders

BBC News 25 September 2008

The two most senior figures in the Church of England have condemned the behaviour of City traders, and questioned their value to society.

Writing in the Spectator, Archbishop of Canterbury Rowan Williams criticises those who buy and sell debt solely for their own profit.

It follows a speech to bankers by the Archbishop of York, Dr John Sentamu.

In it, he called share traders who cashed in on falling prices "bank robbers and asset strippers".

Capitalist mythology

In the piece which is due to be published in the magazine on Friday, Dr Williams attacks "unbridled capitalism" and defends the socialist theorist Karl Marx's critiques of the system.

He said it had become - much as Marx suggested - "a kind of mythology" in which people invested their faith, wrongly assuming it would work for the common good.

He urges that "short-selling" and some other financial practices be banned and wrote: "It is no use pretending that the financial world can maintain indefinitely the degree of exemption from scrutiny and regulation that it has got used to."

He accepts the need and desire for entrepreneurship but claims it is not the only way to create wealth. He denounces the notion that it is as a type of "fundamentalism".

On Wednesday Dr John Sentamu told bankers the market system seems to have taken rules "from Alice in Wonderland".

The Archbishop also noted the contrast between the US government bank bail-out and the lack of funding for efforts to reduce poverty.

Lloyds TSB announced last week it had agreed a £12.2bn takeover of HBOS after shares in the latter plummeted.

Since the takeover, many commentators have criticised traders who sold borrowed shares below their current price, betting that prices would fall further before they bought them back.

The Financial Services Authority has temporarily banned the practice, known as short selling.

"To a bystander like me, those who made £190m deliberately underselling the shares of HBOS, in spite of a very strong capital base, and drove it into the arms of Lloyds TSB, are clearly bank robbers and asset strippers," Dr Sentamu told the annual dinner of the Worshipful Company of International Bankers.

"We find ourselves in a market system which seems to have taken its rules of trade from Alice in Wonderland, " he said.

Poverty goals

Dr Sentamu noted the contrast between the bailouts to banks and the lack of funding for efforts to eradicate poverty.

The US Treasury has proposed a fund worth up to $700bn (£382bn) to buy back much of the bad debt held by banks and other financial institutions.

The Archbishop acknowledged the need for stable financial systems if poverty is to be eradicated but quoted commentators who said: "One of the ironies about this financial crisis is that it makes action on poverty look utterly achievable. It would cost $5bn to save six million children's lives.

"World leaders could find 140 times that amount for the banking system in a week. How can they tell us that action for the poorest is too expensive?"

On Thursday, world leaders will meet in the US to mark progress in the Millennium Development Goals, a set of targets to reduce global poverty and improve living standards by 2015.

The goals range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education.