The OFCCFO’s Council of Doctrinal Financial Ethics (the “Codofine”) has been requested to take position on the “Financial Sin’s Structures” and the “Seven operational princificats” theories as described by Dr. Cuny de la Verryère in his book(Finance catholique, edit. EMS, July 2013).
The concept of “Financial Sin’s Structures” refers to the facts, mechanisms, and systems in the financial and banking sector, which may be considered as socially abusive and harmful, and as constituting sins with regard to the Christian values and precepts.
The author explains that the Financial Sin’s Structures should be practically determined and analyzed, and the Christian Financial Principles should mitigate the ethical risk resulting therefrom.
In light of the abuses revealed by the 2007 financial crisis, and on the basis of the criticism made by the clerical and lay professionnals, from Protestant, Catholic and Orthodox origins, the author set a syncretic list of Financial Sin’s Structures which can be summarized as follows:
1. price volatility due to speculation;
2. unbalanced wages;
3. excessive use of leverage and debt;
4. commodification of workers;
5. short-termism;
6. losing sight of the real economy, scarcity, and productivity;
7. unfair profit sharing;
8. anonymity and irresponsibility of investors;
9. tax havens and tax exemption mechanisms;
10. adverse effects on the environment;
11. lack of transparency.
As a result, the author presents seven Operating Financial Principles compliant with the SDC (called the “Theory of the Seven operational princificats”):
1. prohibition of short-termism;
2. prohibition of non-virtuous investment;
3. obligation to give priority to virtuous savings;
4. prohibition of unjust profits;
5. obligation to share profits;
6. obligation of transparency;
7. obligation of financial exemplary.
Although the Codofine pointed out many references and noticed no material discrepancy between the Christian Financial Principles from Protestant, Orthodox and Catholic origins, the setting of an ecumenical, comprehensive and detailed list purposing “financial sins” and Christian Financial Principles remains a controversial matter, varying from an author to another, and which may lead to practical misinterpretations.
That is why the Codofine expects that the clerical authorities through, in particular, the forthcoming creation of the Vatican asset management and a Russian Orthodox bank will trigger the emergence of a body of technical-ethical-standards able to clarify the doctrinal basics applicable to the Christian Financial Players.
The Codofine