Article by Fr. Seamus Finn, OMI “Money Has to Serve, Not to Rule”
At an industry conference in mid-June, Jamie Dimon, the JPMorgan Chase chief executive, commented on the process and standards whereby the company came to a decision about how to respond to the $6 billion dollar trading loss in its London Office in 2012 that came to be known more popularly as the “London Whale.” As reported in the Financial Times, Mr. Dimon said that he set the following framework at meetings that were organized for resolving the issue; “Make believe the Pope is over here and the chairman of the Securities Exchange Commission is over here,” he said. “What is the right thing to do? And that is what we are going to do.”
While this process and standard was presented by Dimon in the context of keeping any who were contemplating lawsuits over the loss at bay, it made me wonder about the advice the two people that he mentioned might have offered if they were actually invited to the meetings. Both have recently taken up their respective positions and may indeed have some fresh advice to offer not only to JPMorgan Chase but to the remaining institutions in the financial services sector and to those responsible for regulating the sector.
On the one hand Pope Francis has been raising fundamental questions about the social purpose of the financial system and the ethical and moral policies and practices of the institutions and individuals that operate in that space. During her confirmation hearings, the new SEC chair has reiterated the core mission of the commission and other regulators in supervision and analysis and in guaranteeing both the transparency and accountability that are the foundation for sound capital market operations, something in which Dimon has continually professed unshakeable confidence.
Over a period of two weeks in late May, Pope Francis spoke frequently about the challenges and opportunities that redirecting “a culture of waste” and the reform the global financial system present today. After speaking to a group of ambassadors on May 16th about the new idols that are grounded “in the cult of money and the dictatorship of an economy which is faceless and lacking any truly humane goal,” that we have fervently embraced, he goes on to suggest that the ongoing impact of the 2008 global financial crisis is a clear indictment of their “gravely deficient human perspective, which reduces man to one of his needs alone, namely, consumption. Worse yet, human beings themselves are nowadays considered as consumer goods which can be used and thrown away.”
When commenting specifically on the challenges that sovereign states face in fulfilling their responsibility to “provide for the common good,” Pope Francis says that they face a virtually impossible tasks because of the power that “ideologies which uphold the absolute autonomy of markets and financial speculation” exert. He describes this power, which globally significant financial institutions like JPMorgan Chase and others collectively wield, as “a new, invisible and at times virtual, tyranny … one which unilaterally and irremediably imposes its own laws and rules.”
In her confirmation testimony for SEC chair, Mary Jo White highlighted the challenge that that fast paced technologies will continue to present to regulators who are responsible for both monitoring and analysis and for “appropriate and timely regulatory and enforcement responses.” She also mentioned the enforcement function of the SEC when she stated that “Investors and all market participants need to know that the playing field of our markets is level and that all wrongdoers — individual and institutional, of whatever position or size — will be aggressively and successfully pursued by the SEC.”
In his address to ambassadors Pope Francis pointed specifically to the essential role that governments and political leaders play through regulatory agencies like the SEC when he states that “there is a need for financial reform along ethical lines that would produce in its turn an economic reform to benefit everyone. This would nevertheless require a courageous change of attitude on the part of political leaders… Money has to serve, not to rule!”
Finally the pope points out that in ideologies that are grounded in the drive for power and for possessions a rejection of both God and others and an attitude that considers ethics as a nuisance. “God is thought to be unmanageable by these financiers, economists and politicians; God is unmanageable, even dangerous, because he calls man to his full realization and to independence from any kind of slavery.”
“An ethics, like solidarity, is a nuisance! It is regarded as counterproductive: as something too human, because it relativizes money and power,” according to Pope Francis, but it must be restored to the credo of all institutions in the financial services sector as the foundational compass for their decisions and actions.
Follow Rev. Seamus P. Finn, OMI on Twitter: www.twitter.com/SeamusPFinn