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News From The Office of The Archbishop of York

24 September 2005

Archbishop Labels HBOS short sellers as Bank Robbers


The Archbishop of York has spoken of his outrage at those responsible for short selling
shares in HBOS labelling those responsible as bank robbers and asset strippers.
Addressing the annual dinner of the Institute of Worshipful Company of International
Bankers at Drapers Hall in the City of London, Dr. Sentamu said:
To a bystander like me, those who made 190million deliberately underselling the
shares of HBOS, in spite of its very strong capital base, and drove it into the bosom of
Lloyds TSB Bank, are clearly bank robbers and asset strippers.
We find ourselves in a market system which seems to have taken its rules of trade
from Alice in Wonderland, where the share value of a bank is no longer dependent on
the strength of its performance but rather on the willingness of the Government to bail
it out, or rather on whether the Government has announced its intentions so to do.
The Archbishop also spoke of the contrast between the bail outs being proposed for
banks and the lack of funding for the Millennium Development Goals which are due to
be discussed at the United Nations tomorrow.
Dr. Sentamu said: Tomorrow morning I will attend a meeting to launch a campaign of
Education for All as part of the global effort to achieve the Millennium Development
Goals, including the eradication of global poverty by 2015. Of course for such a target
to be achieved there needs to be stable financial systems. There needs to be stable
financial systems. Without a solid global economic base to work from, the eradication
of world poverty would be an even greater task. But as one columnist recently noted,
the President of the United States recently announced a $700 billion bailout plans for
banks and financial institutions. One of the ironies about this financial crisis is that it
makes action on poverty look utterly achievable. It would cost $5 billion 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 now tell us that action for the poorest on the planet is
too expensive?
Dr. Sentamu also drew attention to the plight of those outside the financial industry
who would benefit from Government assistance at a time of need, highlighting the
case of one particular farmer in North Yorkshire:
Let me tell you about Richard, a Yorkshire farmer I know, who specialises in potato
farming. He also grows wheat. We may have not enjoyed the wet summer, but it has
proved disastrous for Richard and many other farmers, many of whom have lost about

a third of their earnings. The harvest is late, there is a huge cost in drying out the
crops, and sowing for next season is late.
In this current situation I hope that the government responds to the call from the Rural
Advocate to bring forward payment of subsidies.
If they can find $700 billion to support the market, will the Government - and bankers
help bail out our farmers? Farmers are facing ruin not because of bad investment, or
speculation. Can we help secure the vital food security they provide?
The Archbishop ended his speech with an appeal for the Deposit the Difference
scheme launched recently by the Global Exchange for Social Investment:
The worlds poor are waiting. And there is something that you can do to help. In fact
its something everyone can do to help. What is it? - Its Topping Up for the worlds
poor, giving a little with every transaction to a scheme called Deposit the
Difference. imagine that every time you bought something, you could arrange to top
up your bills by a few pennies to the nearest pound above, and deposit the difference
into a fund for educating the poor children of the world. Then imagine that each month
you could arrange that any spare pence above the last pound of your total salaries be
taken off and you could deposit the difference in the same fund. Next, imagine that
your example was taken up by everyone in the country and that together we could
help ensure that all those extra pennies could be channelled into areas of need
especially into Education and Health for the words poor.
ENDS
Full Text of Archbishops Speech follows.
For further details contact Arun Arora (Archbishop of Yorks Office) 07738354491
Simon Hills (Worshipful Company of International Bankers) HYPERLINK
"http://www.internationalbankers.co.uk/" http://www.internationalbankers.co.uk/
Details of Dr. Sentamus itinerary on September 25th at the United Nations are
available here: HYPERLINK "http://www.archbishopofyork.org/1971"
http://www.archbishopofyork.org/1971
HYPERLINK
"http://www.anglicancommunion.org/acns/news.cfm/2008/9/23/ACNS4525"
http://www.anglicancommunion.org/acns/news.cfm/2008/9/23/ACNS4525
The Worshipful Company of International Bankers Dinner
24 September 2008
Drapers Hall London
Speech by The Most Revd & Rt Hon Dr John Sentamu, Archbishop of York

Master, Members of the Court and Company and distinguished guests, I count it a great
honour to be invited to your Installation Dinner.
Its quite something to be in the presence of a Company with a Royal Charter. Not only that,
but you have added Worshipful to your title.
Youre beginning to sound more and more like a branch of the Church of England!
One of the roles of Archbishops, indeed of any priest, is to be a pastor to those who find
themselves in testing times.
I am not sure who decided so many months ago to invite me and address you here tonight,
but with such foresight I think they should be recruited as a market analyst without further
ado.
You will well know the story of the surgeon, the vet and the economist who were arguing that
theirs was the worlds oldest profession.
Just look at the first chapter of Genesis, said the Surgeon.
God created male and female in his image, there is no doubt that anyone who could put the
human body together like that must be surgeon !
Not so fast, said the Vet. Before he got round to making humans, God made the animals,
everything that flies in the air and swims in the sea. So it stands to reason that God was a
Vet.
Nonsense said the economist. before he made man or the animals, God made the world
out of chaos.
So what ? asked the surgeon and the vet.
Well, Who do you think made the Chaos ? replied the economist.
In a speech to the British Bankers Association this year, the Governor of the Bank of England
noted that the relationship between banks and the Bank of England was a prickly one.
This was because banks are legitimately concerned primarily with their commercial interest
whilst the Bank of England is concerned with the interests of the UK economy as a whole.
These two sets of interests are not always the same. Mervyn King went on to point out that
whereas a company which misjudged risks or their business model should generally be
allowed to fail to encourage prudence in others, the failure of a bank could impact far beyond
the importance of that bank alone so called systemic risk. This is why central banks have
often acted as lender of last resort. This can in turn encourage banks to take greater risks
enabling them to earn higher profits.
The Governor also posed a question which goes to the heart of where our markets find
themselves today:
Are these repeated crises the inevitable result of human nature at work in financial markets,
with greed and fear alternating as sentiment swings from irrational optimism to irrational
pessimism? Or is it the failure over many years to find the right incentive structure for banking
markets? Or is it a mixture of both?

Well I do not come to you tonight with answers to those pressing questions, however It seems
to me that the current solutions being proposed by the administration in the United States are
remarkable, not least for a proposed level of intervention that now seems to do away with the
concept of systemic risk and replaces it with a new market notion of systemic underwriting.
This is something previously unknown in the so called land of the free and the land of the free
market.
Adam Smith believed that when we act in our own self-interest, an invisible hand would
control our excesses and direct us - even against our will towards the common good.
Today we are more cautious, more cynical and more realistic. It seems if we morality in our
markets we have to legislate for it. Indeed as we meet here tonight, the Prime Minister and
the Chancellor are meeting with members of the US treasury to propose exactly how such
regulation might work.
The problem they, along with other Governments, will face at this time is how to regulate that
which its libertarian advocates argue works best when it regulates itself.
Market freedom has become an absolute, a kind of fundamentalist religion in itself. You know
the joke about how many economists it takes to change a light bulb.
The answer is: None. The market will sort it out.
So much for the self-regulation of the market. But no-one knows better than you that things
are changing daily, and some kind of security needs to be achieved. Any putative regulation
must be based not simply on factors which might seek to limit the re-occurrence of events
over the past week, but which take into account a more basic understanding of our actions.
The story is told of the Zoo keeper who one day was passing the monkey house. He looked
in and saw a monkey sitting on the branch of a tree with the Bible in one hand and Darwins
Origin of Species in the other. What are you doing, asked the Zoo Keeper ?
The monkey replied, Im trying to discover whether Im my brothers keeper or my keepers
brother! One of the lessons of the current turmoil is the recognition of our interdependence
upon each other. It is a lesson that is often at odds with the mindset behind those practices
such as short selling, but it is a lesson that bears repeating in times of crisis.
Am I my brothers keeper ? Yes I am. The impact of what happens with a subprime mortgage
in America has an impact upon my brother employed in Newcastle Upon Tyne working for
Northern Rock. Am I brothers keeper ? Yes I am when short selling leads to mergers with
redundancies for thousands of my brothers and sisters. Am I my brothers keeper ? Yes I am,
because systemic risk only makes sense when it is translated into the thousands of
individual stories of hardship that flow from the collapse of a bank.
This interconnectedness is more than the playing out of Globalisation upon financial systems.
It is fundamentally a recognition of the law of consequence. Our actions have consequences
far beyond that of their immediate parameters.
Let me tell you about Richard, a Yorkshire farmer I know, who specialises in potato farming.
He also grows wheat.

We may have not enjoyed the wet summer, but it has proved disastrous for Richard and many
other farmers, many of whom have lost about a third of their earnings. The harvest is late,
there is a huge cost in drying out the crops, and sowing for next season is late.
In this current situation I hope that the government responds to the call from the Rural
Advocate to bring forward payment of subsidies.
If they can find $700 billion to support the market, will the Government - and bankers help
bail out our farmers? Farmers are facing ruin not because of bad investment, or speculation.
Can we help secure the vital food security they provide?
I am hugely impressed by the aims of this Worshipful Company. You are the largest of the
Livery Companies and genuinely international and in your aims are a force for good.

Your commitment to this fellowship means that you put the community before personal
gain. Thats wonderful!

You raise substantial funds for charity, with a particular interest in the welfare of young
people. That touches my heart. I may be touching your wallet one day, for Im just about to
float a Trust Fund for children and young people.

Your links with schools take practical effect when your businesses offer placement
schemes for sixth-formers.

You seek to promote professionalism with high ethical standards.


I know you are having to shoot the financial rapids. Markets are in turmoil. Bear Stearns and
Northern Rock are etched indelibly in your memory. And now we have the stories of
Lehmann brothers and Merrill Lynch, AIG and HBOS.
To a bystander like me, those who made 190million deliberately underselling the shares of
HBOS, in spite of its very strong capital base, and drove it into the bosom of Lloyds TSB
Bank, are clearly bank robbers and asset strippers!
We find ourselves in a market system which seems to have taken its rules of trade from Alice
in Wonderland, where the share value of a bank is no longer dependent on the strength of its
performance but rather on the willingness of the Government to bail it out, or rather on
whether the Government has announced its intentions so to do.
Our country has built its financial strength historically on the manufacturing of goods, where
money was the medium of exchange. In the last week we have has seen its systems come
close to ruin because now money is no longer being the medium of exchange for goods, but
rather is the very item which is being traded.
Meanwhile talk of bonuses being paid out to the few whilst the many suffer, cocks a snook at
any talk of fairness or equity.
Is it any wonder that in his book, The Good Society, J. K. Galbraith, wrote: No one likes to
believe that his or her personal economic wellbeing is in conflict with the greater public need.
To invent a plausible ideology in defence of self-interest is thus a natural course.

These are testing times. I know, you have shareholders to consider and that many of you
have had to make tough staffing decisions. Some of you must have had sleepless nights and
your home life would have suffered. These are tremendously testing times.
I dont want to impose any more burdens on you. Only to say that the immense power you
wield even if it doesnt feel like that is given you by God for the benefit of the whole of
humanity.
Tomorrow morning I will attend a meeting to launch a campaign of education for all as part of
the global effort to achieve the Millennium Development Goals, including the eradication of
global poverty by 2015.
Of course for such a target to be achieved there needs to be stable financial systems. Without
a solid global economic base to work from, the eradication of world poverty would be an even
greater task. But as one columnist recently noted, the President of the United States recently
announced a $700 billion bailout plans for banks and financial institutions.
One of the ironies about this financial crisis is that it makes action on poverty look utterly
achievable. It would cost $5 billion 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 now tell us that
action for the poorest on the planet is too expensive?
The worlds poor are waiting. And there is something that you can do to help. In fact its
something everyone can do to help. What is it? - Its Topping Up for the worlds poor, giving
a little with every transaction to a scheme called Deposit the Difference.
What does that mean?
Well, imagine that every time you bought something, you could arrange to top up your bills by
a few pennies to the nearest pound above, and deposit the difference into a fund for
educating the poor children of the world. Then imagine that each month you could arrange
that any spare pence above the last pound of your total salaries be taken off and you could
deposit the difference in the same fund.
Next, imagine that your example was taken up by everyone in the country and that together
we could help ensure that all those extra pennies could be channelled into areas of need
especially into Education and Health for the words poor.
Im grateful to the Global Exchange for Social Investment, that this is an idea which is already
being developed.
For me, its appeal is that it would generate a large scale effect from a realistically small scale
effort. Its a financial act in which everyone can play a part. Tonight we could resolve to do it!
On a lighter note and Ill finish with this here is the story of the banker on his way home,
who was accosted for money by a beggar outside the doors of Canary Wharf.
The banker refused, saying, If I gave you money, youd only spend it on a round of golf.
Golf! said the beggar. I havent played golf for 25 years. Cant afford it.
Well, then, youd spend it on gambling.
Never. Gambling is a waste.

Drink then. Anything I gave you would be spent on alcohol.


No, I dont drink; I need it for food.
In that case, said the banker, come home with me and Ill get my wife to cook you a superb
dinner.
The beggar was shocked and shamefaced. Look at my torn clothes; I havent had a bath for
weeks; I probably smell. Your wife wouldnt like that.
I know, said the banker, but I want her to see what happens to a man when he gives up golf,
gambling and drink.
May God bless you all as you become the change you want to see in the world.