Round table discussion on Holy See document’s call to financial world

Deficiencies in the West’s cultural and moral values are the root cause of the current financial and economic crisis, a recent document by the Holy See’s Pontifical Institute for Justice and Peace has warned.

The document, themed ‘Reforming the international financial and monetary system’, will be discussed at a roundtable event led by a panel featuring former Central Bank Governor Michael Bonello, economist Lawrence Zammit, and economic analysts John Cassar White and Joe Vella Bonnici.

Organised by the Malta Chapter of the Vatican City-based organisation Centesimus Annus Pro Pontifice Foundation and research institute Discern, the meeting will be held at Mdina’s Palazzo de Piro on January 24.

Centesimus Annus council member Joseph F.X. Zahra, described the document as “very focused and succinct” and bold enough to propose solutions.

International reaction since its publication in October has been widespread from both lay and religious quarters, and the organisers are keen to instigate a debate in Malta to obtain the local view.

“Economists and politicians on the centre-right and centre-left of the thinking spectrum may have different views on the document’s conclusions and recommendations,” Mr Zahra told The Sunday Times.

“The document concludes that the solution to the crisis will be identified if there is genuine respect for human dignity and a sincere search to achieve the common good. It might sound abstract and conceptual but the document is very specific in its description and remedies.”

Essentially, the document calls everyone to examine the principles and cultural and moral values at the core of social co-existence.

Mr Zahra said the pursuit of instant wealth and immediate satisfaction, which has been amplified by technology and the media, has alienated politics and business from what is truly valuable in life.

He pointed out that emerging ‘wealth gaps’ in developed countries may not simply be reflection of part of society’s inability to generate wealth, but rather a reflection of the way society perceives wealth accumulation and conspicuous consumption.

The international financial, economic and banking community faces a tall order to change its ways: the document is especially critical of attitudes to credit, speculation and a liberalism that shuns rules and controls. But Mr Zahra emphasised that the document’s recommendations are specific. It calls for the separation of investment banking from traditional commercial banking, taxation on financial transactions – in view of creating a fund to promote global development and sustainability under social justice and solidarity principles – and the recapitalisation of banks with public funds.

It goes as far as to propose an international authority on globalisation to monitor the efficiency and effectiveness of the financial and monetary system.

These recommendations have drawn criticism, particularly from quarters that deemed the 2009 encyclical ‘Caritas in Veritate’ to have displayed a stronger belief in human nature and potential, and people’s ability to cooperate in a community.

Inability to identify lasting solutions to the crisis is a reflection of politics’ failure to return to its role of leading and enabling, Mr Zahra added. Indecision is one of the worst failures in leadership. To reverse the trend, international leadership must have clear objectives and take assertive and timely decisions without fearing the prospect of not being re-elected.

Cash may be king in today’s world but the bottom line should not be solely about money. The major considerations should be ethics, values and principles which look beyond money as an end in itself.

Monetary gain, Mr Zahra stressed, is a means to develop people’s physical, emotional, intellectual and spiritual needs. It is where family, education, and the media have an important role to play.

Particularly interesting is the document’s slating of the decision to allow Lehman Brothers to fall in 2008. What lessons have been learnt from it?

“From a purist, micro-economic viewpoint, the decision to let Lehman Brothers collapse was correct,” Mr Zahra explained. “The bank failed to deliver and it had to suffer the consequences of its flawed decisions as any other business in the marketplace would. But a clinical view of a market player is not enough. Lehman Brothers was a symptom of the time – not the cause. It was a specimen of a multitude of other banks which operated in the same way. The decision to let it go was simplistic and short-sighted. Decisions need to be taken in a much wider context. Economic decisions must be truly humanist and social in nature.”

Registration for the discussion may be made on tel. 2124 1924.