Wednesday

27th Jan 2021

French finance chief joins Vatican attack on markets

  • Stairwell in the Vatican museum. The church's own bank is one of the world's most opaque and least regulated in the world (Photo: Jon Himoff)

France's top financial regulator has told bishops he shares the Vatican's view that financial markets are out of control and need central regulation.

Jean-Pierre Jouyet, the head of the French Financial Markets Authority, laid out his views at a yearly meeting of 24 senior Roman Catholic bishops in Brussels on Thursday (27 October), a few hours after EU leaders finished their anti-crisis summit up the road.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

He described derivatives markets as a vast, opaque structure which has lost touch with reality and which is eroding fundamental values.

Citing the example of the Chicago Mercantile Exchange, which last year traded wheat futures contracts worth 46 times the world's actual production of wheat, Jouyet said: "This [system] has changed our relationship to money, which has become an absolute value and the measure of all things."

He added: "More seriously, states have increasingly fallen under the control of markets, as this crisis shows. We have to constantly react to market expectations, to reassure the markets ... States, politics must regain control of things."

In terms of concrete policies, Jouyet said euro-using countries should establish joint economic governance despite the "unease" of non-euro EU members over a "two-speed" union or resistance among EU voters to a "federal leap."

He added the EU should "strengthen" the powers of its new banking and insurance regulators - the Paris-based Esma, the EBA in London and the Frankfurt-based Eiopa. He backed European Commission proposals to gag ratings agencies and to create a tax on financial transactions. And he said banks should be split into normal lenders and speculators.

He also endorsed Vatican ideas on how to deal with traders and globalisation. "In this regard, the Pontifical Council for Justice and Peace is right to emphasize in its latest report the need to strengthen global governance," Jouyet said.

The Vatican report on Monday urged the G20 and the UN to create "a kind of central world bank" to discipline markets and, later on, a world government or "public authority with universal jurisdiction" to promote peace.

The proposal was based on similar concerns to Jouyet's description of the Chicago exchange.

The Vatican paper said: "The crisis has revealed behaviours like selfishness, collective greed and the hoarding of goods on a great scale ... The negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence."

It added the "primacy of politics, which is responsible for the common good" should be "restored" over "the economy and finance."

For their part, the 24 bishops in their joint statement on Friday turned the discourse on its head, saying markets have become what they are because of politics and culture.

"The causes of the crisis are structural and mainly rooted in the short-term and very often electorally-motivated political choices. These choices often reflect individual behaviour of credit-financed consumerism ... populism ... [and] moral relativism," they said.

The Vatican's own bank, the Institute for Works of Religion, is one of the world's most opaque and least-regulated financial bodies. Last year Italian authorities temporarily seized €23 million of its assets on suspicion of mafia money laundering.

Deal reached on EU economic governance laws

After months of fraught negotiations, a deal has been reached on six new laws designed to keep eurozone member states' budgets in check and prevent a repetition of the current debt crisis. The new set-up will make it harder for deficit-sinners to avoid sanctions.

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Warsaw and Budapest seek EU funds despite national veto

A senior EU diplomat said Poland and Hungary should lift their veto or give a signal they are willing to do by Tuesday - otherwise there will be alternative plans for a recovery fund with the other 25 member states.

Budget deal struck, with Hungary threat still hanging

Ultimately, the European Parliament managed to squeeze an extra €16bn in total - which will be financed with competition fines the EU Commission hands out over the next seven years, plus reallocations within the budget.

Stakeholders' Highlights

  1. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  2. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  3. Nordic Council of MinistersWomen benefit in the digitalised labour market
  4. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  5. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!
  6. UNESDAMaking healthier diets the easy choice

Latest News

  1. Giuseppe Conte: scapegoat or Italy's most cunning politician?
  2. Borrell to meet Lavrov, while Navalny behind bars
  3. Too few central and eastern Europeans at top of EU
  4. Rift widens on 'returns' deadline in EU migration pact
  5. EU adds new 'dark red' zone to travel-restrictions map
  6. Migrants in Bosnia: a disaster foretold on EU doorstep
  7. Navalny protests sharpen EU sanctions talks
  8. Why Russia politics threaten European security

Join EUobserver

Support quality EU news

Join us