Vatican joins calls for crackdown on financial markets

• Vatican thinktank wants global authority to police markets • Economy needs people-centred ethics, cardinals argue If Vatican cardinals have yet to join the Occupy Wall Street protesters on the barricades, a document released by the Holy See calling for a “world authority” to crack down on runaway capitalism suggests some are seriously considering it. Written by the Vatican’s Pontifical Council for Justice and Peace and released on Monday, “Towards reforming the international financial and monetary systems in the context of a global public authority” suggests a beefed-up United Nations could police the financial markets and inject a dose of ethics to replace rampant profiteering and reduce inequality. The pamphlet claims that in combination with a “central world bank”, such an authority would help restore “the primacy of the spiritual and of ethics”, as well as “the primacy of politics – which is responsible for the common good – over the economy and finance”. Financial transactions would be taxed to promote global development and sustainability, while “virtuous” banks helping out the “real economy” would qualify for state subsidy should they need it. Presenting the document at the Vatican, the council’s secretary, Bishop Mario Toso, said the 1944 deal on international finance signed at Bretton Woods had failed, while the G20 group of nations was unable to rein in deregulated markets. The document also says the International Monetary Fund (IMF) is no longer up to the job of stabilising the global financial system. Toso admitted that these ideas appeared to sympathise with those of ” los indignados “, the Spanish protest over mass youth unemployment, but stressed that the document was built on existing Vatican teaching, notably Pope Benedict XVI’s 2009 encyclical , which criticised free market fundamentalism. According to the pamphlet, Benedict had singled out the moral as well as economic and financial roots of the crisis. “To function correctly the economy needs ethics, and not just of any kind but one that is people-centred.” The pope, it adds, “himself expressed the need to create a world political authority”. The document also picks up on the pope’s denunciation of a new “technocracy”, and raises concerns over automated trading. “Seventy per cent of financial transactions are today performed in milliseconds by algorithms,” said Leonardo Becchetti, an Italian professor of economics, who helped draft the document. The document adds: “The speculative bubble in real estate and the recent financial crisis have the same origin in the excessive amount of money and the plethora of financial instruments globally.” Letting Lehman Brothers fail, thanks to a “liberalist approach, unsympathetic towards public intervention in the markets”, only worsened the crisis, it adds. Looking ahead to the G20 conference in Cannes on 3 and 4 November, Cardinal Peter Turkson, the head of the pontifical council, said the pope would be keeping a close eye on proceedings and looking for “a clear vision of economic, social, cultural and spiritual aspects”. Global economy Vatican Italy Religion Catholicism Economics Occupy movement Banking reform Banking Financial sector Tom Kington guardian.co.uk

Posted by on October 24, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.