Following on from yesterday’s post on the Christianity Uncut/Occupy Faith protests at St Paul’s, I thought it might be worthwhile looking at what the Church of England has been doing recently in response to the state of our financial institutions, especially in the wake of the Libor fixing scandal.
I’ve regularly blogged on the need for Christians and the Church to make their voice heard effectively in the public square and to speak God’s values into the places where they are being ignored or forgotten. In one sense I admire the protesters who gatecrashed the St Paul’s service for being so fired up with their desire to see the Church address capitalism that they were willing to get off their backsides and be counted. Unfortunately, my opinion is that they were misguided in their approach and also from what I can see their interpretation of Biblical teaching on money is not one that the majority of Christians would necessarily agree on.
The Church of England, on the other hand, has a history of procrastination and lack of action when it comes to some aspects of social action and injustice. It’s been very good at talking, but this has not always been matched by deeds. When the Parliamentary commission investigating the Libor rate-fixing scandal and other banking misdeeds recently requested comments from the public on how to reform finance, you might not have expected the Church of England to have done much about it, but the times do appear to be changing and therefore it wasn’t a surprise to hear that the CofE had made a response. The submissions were recently released to the public, which means that we can now see what they had to say in full. The CofE did in fact have a great deal to say and if you delve into their submission you’ll find there is plenty to chew on. Here are some of the points made:
Public disquiet about the scale of bonuses, especially in investment banking, has shed some light on a culture where large bonuses are valued, less for their monetary worth than for their significance as status indicators within the industry. This in itself suggests that the culture of banking has lost touch with matters of virtue – in short, there seems to be no reflection upon the question, “What would it mean to be a ‘good’ banker?” beyond the crude measure of monetary profit. To speak of professional standards in a culture with no internal discussion of what it might mean to be virtuous in that culture, is to be part of a very attenuated and morally inadequate discourse.
The financial crises and emerging scandals of recent years have raised profound concern not simply about the ability of the system to prevent extreme and criminal behaviour by individuals but about the system itself and a whole cadre of professionals within it. The question is not whether systems have been adequate to identify and deal with the bad apples but whether the whole orchard needs replanting.
One insight from the Christian tradition of penitence and forgiveness is that it is often not enough to put matters back to where they were before things went wrong; some demonstration of a change of heart by means of restitution and a visibly robust refusal to let the same failings occur again, is necessary before a bad situation can be made good. Exactly what kind of action by the banks, or by the government, would be necessary to restore trust in this way would probably emerge if the debate about banking ethics were to take place openly in the public realm.
We believe that the restoration of public trust in the banking industry would be in the interests of all. To achieve this is not just a matter of technical “fixes” but may require public, corporate, contrition for past failings, demonstrably robust structures to ensure that old mistakes are not repeated, and possibly some symbolic steps to assure the public that the corporate culture has changed.
The banks’ contribution to wealth creation has to be soundly based and ethically robust. The activities of the financial sector have become too detached from the material reality which ultimately measures wealth, too driven by poorly managed borrowing and too vulnerable to theoretical risk assessment tools that place undue weight on mathematical probabilities and make insufficient allowance for the messiness of the human condition.
Redressing these imbalances and neglects is essentially a conceptual rather than a technical problem. Technical fixes, additional regulation and reformed structures may help but the central task is to encourage and sustain a pervasive culture of banking which is framed within a concept of the virtues. Reliance on regulation alone will only lead to a frantic search for loopholes and a de-professionalising of the industry in a way which could diminish its capacity for innovation.
There is an important role here for the senior figures in banking who, so far, have not come out of the crisis at all well. As top bankers have been exposed to the public gaze (a hitherto rare experience) their capacity to speak of their activities in ways which connect to public disquiet has been found sadly wanting.
The public, as a result, now has little trust in such figures to overcome past structural failings let alone to engender the kind of new corporate culture which would act as a future safeguard. A new and humbler style of leadership will be necessary if the banks are to redeem their reputations.
Following the release of the CofE submission, the Wall Street Journal asked Rev. Dr. Malcolm Brown, director of the Church of England’s Mission and Public Affairs Council to expand on the thinking behind the submission. These were two of his responses:
Q: If reforming finance isn’t just a question of getting rid of a few bad apples but of replanting the whole orchard, how can that be done?
A: The point isn’t to get rid of everybody and start over. What you need to do is not simply weed out the identifiable wrongdoers but rethink the structure. In order to get good apples, you have to have a good orchard.
Whenever you have a conversation with institutions about how business is done, people find it very hard to move from personal morality to institutional morality. In the conduct of business, good people struggle to live by the virtues they say they personally believe in. That’s true in any business, but perhaps especially true in banking. You need to rethink how banking is done so that good people can flourish and good people can do good things.
Q: The church’s submission spoke of “penitence.” What did you have in mind?
A: The few apologies so far from people in the banking industry have had the tone of “If I have caused offense, then I apologize.” There’s a very great temptation just to say, “Things went wrong, we’ve put them back to where they were before, now you can forget that it went wrong, OK?” But it’s like shoplifting: Even if you put what you took back onto the shelf, you still did something wrong. Just restoring the status quo ante doesn’t give people the sense that trust has been restored. You can’t just put it back on the shelf; you have to admit that the way things were done was wrong.
This is what we should be expecting to hear from our Church leaders. Where there is injustice and greed, it should be challenged out loud and the Church shouldn’t be afraid to wade into the debate and bring God’s perspective to it. It’s not a case of ramming the Bible down people’s throats and judging them with an attitude of superiority, but instead Christians should have confidence that they are seeking to serve the common good, bringing sound moral principles to the table rather than selfish motives.
The fact that Justin Welby, the Bishop of Durham has been appointed to the parliamentary commission investigating banking standards gives recognition to the need for moral and spiritual input into this issue. Tony Smith, global head of financial services at market-research company Ipsos has said that, “There are going to be many more skeletons in the cupboard.” The appointment of a bishop to an investigative panel could serve to “inject ethical and moral standards to rein in the industry.”
Bishop Welby, who is one of the favourites to become the next Archbishop of Canterbury, has a great deal of understanding of the business world having worked in the oil industry for 11 years, during which time he dealt with foreign-exchange trading, insurance and became familiar with the workings of Libor. Having church leaders such as the bishop who are able to talk with authority on both economic and theological matters allows the church to have credibility when it makes a stand. And this is the way it should be. The church needs leaders who have been in the past and still are in touch with the real world. Theology and belief only fully make sense when they are taken beyond the church walls.
Our banking industry is in desperate need for a moral way of doing business to return to it. As Christians we can sit there and do nothing which is by far the worst option, or we can shout at make a fuss telling those in charge that they need to sort themselves out, or we can choose to engage constructively and become part of the process, if allowed, without watering down the message that in order to move forward and repair the damage, repentance of the past is necessary.
I know which of these I’d go with.
Categories: Banking & capitalism, Church, Morals & ethics
We must all agree that the banks have covered themselves in discredit and it is good to see the CofE making a worthwhile response. This is a time when the church needs to gain conviction to speak out more than ever before.
However, there is surely an upstream sickness in western consumerism, in which inflated expectations have increasingly been met by massive borrowing. Money has become more printed paper than the value it is supposed to represent. “Building castles in the air” is an apt description of what has been going on, and the worst cure, it seems to me, is to pump more air under the castle, which is what quantitative easing amounts to. Perhaps outspokenness from the church can help dispel the notion that borrowed money is wealth?