Vatican proposes a “Global Public Authority” to stabilize economy

by | Oct 25, 2011 | Justice and Peace | 3 comments

According to RomeReports TV  In light of the economic crisis, the Vatican released a proposal to tackle the world’s financial  market. The document titled, “Reforming the International Financial System” was presented at the Vatican Press Office.  The document says the market needs a so called “Global Public Authority” that can make sure all players are following the rules of the game.

The document claims that the current leadership of the G7 and G20 is informal. It also says it excludes too many countries.

Italian economist Leonardo Becchetti explained some of the key points.

Leonardo Becchetti
Economist, Università Tor Vergata (Rome)

“To protect some of the global public goods, there needs to be a quick international coordination among States. For example, on issues like pollution and also financial stability. We need better international coordination, quicker responses and true representation.” 

The Vatican says part of the solution is a World Central Bank. Under the proposal, the bank  would regulate currency exchange. It would also have a world fund to re-capitalize where needed. It would implement different rules for commercial and for investment banks and it would also impose a tax on financial transactions.

Leonardo Becchetti
Economist, Università Tor Vergata (Rome)
“This crisis stems from financial reasons that in turn weaken countries. The weak states are now causing problems for banks. So it’s normal to ask the financial sector to pay, so that the weakest states or the welfare state don’t have to front the burden. The Church is at the forefront. It endorses this proposal which first came from the civil society. It’s something that’s already supported by some countries, and also by the president of the European Comission.”

The document is the work of the Pontifical Council for Justice and Peace, meaning it’s not the work of the papal Magisterium. It was done in part, to promote a different type of discussion in the G20 meeting scheduled for November 3rd and 4th. It’s also a way to stimulate discussions among different governments and institutions.




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    Cardinal Backs Wall Street Protests as Vatican Urges Regulations
    Flavia Rotondi and Jeffrey Donovan, ©2011 Bloomberg News
    Monday, October 24, 2011
    Oct. 24 (Bloomberg) — A senior Vatican official said the Occupy Wall Street protests were justified, as the Holy See called for overhauling global financial rules and establishing an international market regulator.

    “Do people at a certain time have a right to say: ‘Do business differently, look at the way you are doing business because this is not leading to our welfare, to our good?'” Cardinal Peter Kodwo Appiah Turkson told reporters at the Vatican today. “Can people demand this of the people of Wall Street? I think people can and should be able to.”

    The comments by the Ghanaian-born cardinal came as the Vatican office he heads, the Pontifical Council for Justice and Peace, called for changes in the way financial markets are run and regulated. The appeal is the latest by the Vatican following a 2009 encyclical by Pope Benedict XVI calling for a new financial order.

    The council laid out its proposals in a document released today in Vatican City that included a call for taxing financial transactions. Economic injustices including “the hoarding of goods on a great scale” may create “a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even those considered most solid,” according to the text.

    The Vatican called for a global authority with “universal jurisdiction” over financial policy, including a “central world bank” with functions similar to those of national ones. Such sweeping changes would have to be “gradual,” according to the document.

    “Everybody knows about globalization, everybody feels its impact,” Turkson said. “But single individual countries don’t have the competence to deal with it.”

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