A just-released summary of a Vatican-sponsored conference on “The debt crisis, financial reform and the common good” held in Rome in Sept. 27-28, 2013, details a number of points and conclusions contributed to the proceedings by Catholic University law school Professor George Garvey.
The four-session conference invited Church leaders, theologians, economists, finance professionals, central bank leaders and others to share ideas and suggestions on the central question: how to bridge the gap between common aspirations to global economic justice, solidarity, effective and equitable international financial reform, and the real decisions of policy makers, financial institutions officers, and finance professionals?
Garvey pointed to excessive leverage, improvident lending practices, creation of new opaque financial products and their misuse as part of the consensus explanation of the crisis. Also, supervision and regulations failures were cited by Garvey and fellow scholars.
His paper was also critical of the way ethical issues in finance are commonly understood, noting that they often seem to be centered on matters like moral hazard and agency problems, while overlooking the huge transfers of wealth to the financial sector at the systemic level, both from the real economy and from the poor and middle class.
The conference was sponsored by a Vatican Foundation, Fondazione Centesimus Annus Pro Pontifice. It’s mission is to “help promote the study and diffusion of the social doctrine of the Catholic Church.”
The synthesis of the lengthy proceeding was provided by Simona Beretta, professor of International Economics, the University of the Sacred Heart in Milan.