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Greed isn't so good, say church leaders -

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Greed isn't so good, say church leaders

The World Today - Friday, 26 September , 2008 12:26:00

Reporter: Emma Alberici

LISA MILLAR: The Church of England has weighed into the financial crisis.

Its two most powerful figures, the Archbishops of Canterbury and York have attacked city traders
for greed and questioned the value they bring to society.

The Archbishop of York, Dr John Sentamu, condemned the short sellers who made millions by driving
down the share prices of banks.

Europe correspondent Emma Alberici.

EMMA ALBERICI: The Archbishop of Canterbury, Rowan Williams, has referred to the modern devotion to
the free market as a form of idolatry and said Karl Marx was right in his analysis of the power of
unbridled capitalism.

He has written an article for the Spectator magazine that will be published today in which he
claims that it's no use pretending that the financial world can maintain indefinitely the degree of
exemption from scrutiny and regulation that it has got used to. The bishop of Croydon, Nick Baines
agrees.

NICK BAINES: I mean there is something basically immoral surely about the system where people can
make vast profits when it is going good and that isn't necessarily shared with the wider community
who money it is that they are gambling with anyway and then as soon as it goes wrong, they are
bailed out by the states that they pleaded for years should not be involved.

EMMA ALBERICI: The Archbishop of Canterbury has been joined in his criticism of the markets by the
other most senior member of the Church of England. The Archbishop of York Dr John Sentamu referred
to the short sellers who've cashed in on falling bank shares as bank robbers and asset strippers.

Giles Fraser is the Vicar of Putney

GILES FRASER: The idea that the Americans are going to give $700-billion and nationalising their
banks as it were when there are people who can not afford to eat all the way around the world. That
clearly has to be morally wrong.

EMMA ALBERICI: There is also a rising level of unease about Washington's bail-out coming from the
world's leading economists like Jon Danielsson of the London School of Economics.

JON DANIELSSON: It does send this signal that financial institutions that assume too much risk,
they can always go to the Government and demand to be rescued. It will create that impression in
the future. It will take a long time to eradicate that and it is a very dangerous impression to
have. This has happened in the middle of the US election. Now there's are a large number of
companies not connected to Wall Street which are in trouble.

I mean Ford and General Motors come to mind. In a key electoral state like Michigan, it will be
difficult for the Government to say we are going to bail-out the fat cats on Wall Street but not
the average working man in Michigan.

Indeed the US Congress is debating whether to give $25-billion to these companies. One of the worst
things that could happen is if this turns into a general give-away to every single ailing company
in the US.

EMMA ALBERICI: This $700-billion, where does it come from?

JON DANIELSSON: Somebody pulled it out of a hat. They have no idea. They probably looked at this
and said well the amount of sub-prime is somewhere 500 and a trillion, let's pick a number in
between.

EMMA ALBERICI: What sort of companion legislation should come with this bail-out?

JON DANIELSSON: As little as possible. We have seen in previous crisis when the Government reacts
quickly in a panic, we end up with legislation that often ends up causing more damage than good.

We saw it in the Great Depression. We've seen it elsewhere and really the reason for this crisis is
the fact that the industry was creating products that are so complicated that not the regulators,
not the clients and not the banks themselves understood what was going on.

In the future, I doubt very much that we will see anything of this scale happening in the future.
However the problem with financial crisis and try to prevent them is like closing the barn after
the horse has escaped.

We are very good at reacting to the previous crisis but the new one always catches us unawares and
the next crisis will be completed different in some area we had no idea existed.

LISA MILLAR: That is Jon Danielsson of the London School Of Economics.