The religion and society think-tank Ekklesia explained to the BBC and other news agencies yesterday that in 2006/2007 the Church Commissioners set up a currency hedging programme, in effect short-selling sterling to guard against rises in other currencies.
Jonathan Bartley, co-director of Ekklesia, said: "The archbishops should be extremely careful when attacking City 'bank robbers' for short-selling and speculation. Amongst the billions of pounds that the church currently invests in property and shares are hundreds of millions invested in oil and mining companies. They have benefitted hugely from rising oil, gold and copper prices, which have been driven at least in part by speculators."
He pointed out that the church has substantial share holdings in banks and a stated aim of making a profit on its investments of 5 per cent a year above the rate of inflation.
Ekklesia says that the worldwide Christian churches control billions of pounds of assets, and have the opportunity to act as a global community promoting an alternative model of economic activity based on human need not human greed.
In the case of the Church of England, the think-tank says they could invest more in institutions such as cooperatives, friendly societies and housing associations in return for a slightly lower profit.
"It's a question of how resources are earned and shared, and in whose interest", commented Ekklesia co-director Simon Barrow this morning. "The earliest Christian communities were founded on principles of seeking to use material wealth for the common good, building equality and giving priority to the poorest and neediest."
"The Church needs to put its money where its message is," he added. "The founder of Christianity said, 'where your treasure is, there is your heart'. Condemning others for being greedy when you are playing the system to your own advantage will strike many as lacking the kind of integrity and creative endeavour the churches should be demonstrating."
Ekklesia points out that many church groups and community initiatives are involved in 'alternative economy' practices - co-ops, credit unions, ethical investment, fair trading, local trade and exchange schemes, small loans for development, better aid, calls for monetary reform and more.
"This work is often praised by church leaders," said Barrow. "What we are saying is that they should be investing far more of their resources to match."
The Church Commissioners claimed last night that criticism of their actions was "misleading" and that it was about price protection rather than speculation.
But Ekklesia says that this is an evasion. "The fact is that that the Church deliberately hedged sterling speculatively, to offset their risks," said Jonathan Bartley.
"The Church had £13 million invested in Man Group, the largest listed hedge fund manager, at the end of last year, so it is certainly making money out of those who are shorting the markets."
Indeed, it has emerged that the extent of the Church's embroilment is far greater than hedging.
Andrew Brown, secretary to the Church Commissioners, who manage the C of E's financial portfolio, admitted that the Commissioners do, through their custodians (JP Morgan), have what he called "a small stock lending programme. In the first quarter of the year it started lending out stock using its custodian, JP Morgan Chase."
The Church has traded debts, too. The commissioners also sold a £135 million mortgage portfolio last year, according to their annual report, in spite of Dr Williams’ criticism of trading debts exclusively for profit, points out Ekklesia.
This is not the first time the Commissioners have been in hot water over their investment policies. In 2002 a multibillion-pound fund which clergy rely on for their pensions lost £400 million.
Falling share prices at the time wiped 10 per cent off the value of the investment portfolio used to support retired vicars and parishes, which comprises equities, properties and assets including a collection of 17th century Spanish paintings.
The loss was one of the largest in the history of the church, which decided to invest more heavily in the stock market after it lost £800 million in property speculation in the late 1980s and early 1990s.
Back in 1989 the then Bishop of Oxford, the Rt Rev Richard Harries, asked the Church Commissioners of England to re-evaluate their investment portfolio following disquiet over investment in apartheid South Africa from some of their holdings.
The subsequent Court case revealed a tension between those pushing for ethical investment and the definition of "fiduciary responsibility" on trustees of charitable money. But the Church was told that it could act according to "core principles".
This, says Ekklesia, is the key. "Perhaps now would be an opportune moment to look at the whole C of E investment system," said Simon Barrow, "and to revisit earlier world church debates about the 'ecumenical sharing of resources' - which was about how the Christian community could promote economic justice in the world, and in its own relations. This is an opportunity for the Church to be honest and positive, not anxious and defensive."
In 2005 the British and Irish churches commissioned a report on the market system, published by the official ecumenical body CTBI as 'Prosperity With A Purpose'. It argued that the churches had been too anti-free market in the past and should now embrace the brave new world of turbo-capitalism while holding on to social values.
Ekklesia's theological and economic critique of this report, called 'Is God bankrupt?', suggested that this was too shallow an approach that missed the distinctive contribution the churches could make, and failed to take seriously the problems of neo-liberal ideology.
The call for a radical "new economic approach" among the churches has been strengthened in the past ten years years by practical global consultations involving the World Alliance of Reformed Churches, the World Council of Churches and others.
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