Wednesday, October 26, 2011

European leaders reach deal on bank recapitalisation

WORLD WEDNESDAY, OCTOBER 26, 2011


By KARL STAGNO-NAVARRA

Prime Minister Lawrence Gonzi arriving for tonights meeting in Brussels

Scheme requires big banks to have 9% of capital by June as a one-off stabilisation measure.


European Union leaders have reached agreement on a plan to recapitalise Europe's biggest banks, in a bid to contain the effects of any further shocks in the eurozone.


The plan entails that big European banks will be required to have “9% of the highest quality capital” by June 2012, measured against assets, EU President Herman Von Rompuy said, adding that the banks should raise capital from the private-sector where possible.


However, where that proves impossible, member states will be obliged to provide capital in exchange for equity.


The eurozone's rescue fund, now known to be the European Financial Stability Facility (EFSF), could be used as a last resort.


In a statement issued by EU leaders at the end of their meeting, it was said that guarantees were needed for banks' liabilities to ensure that they could obtain medium-term funding.


They have asked the European Commission to work with the European Banking Authority, the European Investment Bank and the European Central Bank to explore options for a co-ordinated EU approach.


Polish Prime Minister Donald Tusk, who currently heads the EU’s rotating presidency, said that the plan was adopted “after a short, heated debate” among the 27 leaders, before the eurozone leaders began their own meeting.


“An emotional element during the debate was the fact that this is not a permanent element,” Tusk said, referring to the “exceptional circumstances” that had made such a move necessary. “This will not be a permanent solution for the future.”


Although neither Tusk nor Van Rompuy gave a figure for therecapitalisation needs of EU banks, the total is expected to be around €109 billion.


Regarding the prospects for a comprehensive crisis response beingfinalised by eurozone leaders tonight, Tusk said: “I think we are very close to a full political agreement. However, there are some important details that might require some more debate. We need to be patient.”


But Tusk also stressed that the bank recapitalisation plan was part of the overall crisis response. “The recapitalisation of banks will work only when the euro area approves other elements that are currently being debated,” he said. “The bank recapitalisation without the remaining elements, without the firewall, wouldn't have any chance of success.”


Tusk said that Italian Prime Minister Silvio Berlusconi , had submitted a letter to the group to inform them of his government's austerity measures. Tusk said that the letter included a “detailed work plan” from the government and was “very well received”.


British Prime Minister David Cameron said: “We've made good progress on the bank recapitalisation, it wasn't watered down. But it will only go ahead when the other parts of the full package go ahead and further progress needs to be made tonight.”


Cameron was one of the leaders of non-eurozone countries who had insisted on a full Council meeting before the summit of eurozoneleaders.


Leaders of the 17 eurozone countries – including Maltese Prime Minister Lawrence Gonzi - are meanwhile holding a separate meeting tonight to try to agree ways to increase the firepower of the eurozone rescue fund and cut the size of Greece's debt as part of a package of measures to tackle the eurozone crisis.



Source


A Face You Can't Forget

protesters outside St Pauls

During the OccupyWallStreet demonstrations many of the protesters have worn a peculiar mask. This mask has become very popular with the growing anti-establishment movement worldwide. I first noticed this trend when there were riots throughout Europe, and many of the activists wore this particular mask. An activist Hacker group called Anonymous has issued press release videos with one of its representaives wearing such a masks.
I am almost certain that the popularity of this strange disguise grew out of the release of a film named "V", in which the lead character wore a similar mask; It was released a few years ago, and it was based loosely on the Guy Fawkes Gunpowder Plot of 1605 in England. Well, Guy (Guido) Fawkes was acting at the behest of (in collusion with) the Jesuits and the Roman Catholic Church who wanted to regain control of Britain, and reverse the spread of the Protestant Reformation in Europe. Therefore, every time I see one of these Guy Fawkes "V" Masks, I think about the Gunpowder Plot, the Jesuits, and conspiracies.

So, taking these factors into account: Can we be very far from the truth when we speculate who could be fomenting this civil unrest - when the activist wear these masks?

Hmm?

By the way "V" stands for Vendetta; An Italian word for Vengeance, vindicate, (old quarrel)...


Arsenio.


For peace: Pope invites leaders of all faiths; no common prayers this time


Published: Wednesday, Oct 26, 2011, 17:41 IST
Place: Vatican City | Agency: DNA
Pope Benedict XVI
Reuters


To mark the 25th anniversary of the 1986 meet of leaders belonging to different faiths, Pope Benedict XVI has invited Jews, Hindus, Sikhs and Muslims for a pilgrimage in Assisi.

However, unlike in the 1986 edition, the leaders won't take part in common prayers.

Twenty-five years ago they were invited by Pope John Paul II for a daylong prayer for peace. Then-Cardinal Joseph Ratzinger had been critical of common prayers and disapproved of leaders of all faiths praying together. This time they will be allowed personal time for individual prayer one after another post lunch.
Around 300 participants are expected to attend.

According to an AP report, Pope Benedict XVI held a pre-trip prayer service for Christians at the Vatican on
Wednesday.

AP quoted Cardinal Peter Kodwo Appiah Turkson, who helped organise Thursday's event as head of the Vatican's justice and peace office, as saying the "real" prayer for peace commemorating John Paul's 1986 meeting was Wednesday's vigil service inside the Vatican. "The emphasis is on pilgrimage rather than on praying together," Turkson told reporters last week.


Source

Everybody Is Confused”

Everybody Is Confused”

Jordan's King Abdullah II

An interview with Jordan’s King Abdullah about the chaos in Syria, and his view that the Arab Spring is a “disaster” for Israel.



Source

Getting it Done: How Civil Society Can Help Secure the U.S.-Mexico Border

OCT 25 2011, 10:41 AM ET

In a rapidly changing world of complex systems, small shifts can produce very big consequences. Here are some ways that local institutions and social networks are already working along the Rio Grande border
ams oct25 p.jpg

A truck bearing Mexican and U.S. flags approaches the border crossing into the U.S., in Laredo / Reuters

If power really is shifting in part from governments to social actors and if those actors have a growing role to play in helping to solve regional and global problems, as I have been arguing, then the proof comes from through innovative partnerships, networks, and collaborations. State, local, and municipal governments also have a big role to play here, as do traditionally domestic government agencies. All of these actors fit in the broader category of non-traditional foreign policy participants. From time to time I will write a column in an ongoing series on "Getting It Done," documenting examples of the work that is happening and producing results on the foreign policy frontier. I encourage all readers to send me examples they know about, preferably through Twitter at @slaughteram, so that I can spread the news through Twitter as well as reporting on it here. But you can also write me by posting a comment here at The Atlantic.

I'm going to kick off this series with a discussion of the role of new players in performing perhaps the most sacred function of territorial states: protecting their borders. The border between the U.S. and Mexico divides two very different states, differences that give rise to many of the problems along the Rio Grande. It is certainly possible to understand much of what happens along that border in terms of clashing state interests and relative state power. The U.S. has sent troops, spies, and law enforcement agents across the Mexican border many times, in ways that will color U.S.-Mexican relations for decades if not centuries to come. The U.S.-Mexican relationship has also shaped traditional Mexican foreign policy, leading successive Mexican governments to align with the non-aligned movement during Cold War struggles between the U.S. and the Soviet Union, for example, and to rarely side with the United States on international votes.

The state-to-state lens remains useful in thinking about U.S.-Mexican relations. But when it comes to life as it is actually lived along the border, where transnational problems arise and must be solved, sub-state and transnational actors are developing their own solutions.

One of the biggest transborder issues is the horrific civil violence caused by drug cartels operating in both the U.S. and Mexico, which both spills across the border and weakens the Mexican state. Within Mexico, 34, 612 people have been killed from 2006 until January 2012, a toll higher than that in many ongoing civil wars. Governments, corporations, and citizens are responding in part by trying to map the violence using texts, digital mapping technology, and social media.

It's a strategy that recently cost Maria Elizabeth Marcia, the 39-year old editor of Primera Hora in Nuevo Laredo, her life. The killers placed Marcia's head next to a computer, mouse, cables, and headphones. Her crime? Using social media to report on the activities of local drug gangs. This was just the latest of a string of gruesome attacks. Earlier this month, two young people were murdered and hung from an overpass in the same city for daring to blog about gangs. The swiftness and brutality of the gang response suggests they understand the potential power of this strategy to mobilize ordinary citizens against the gangs. We should be doing everything we can to support Mexicans who are taking these kinds of risks. As one example, my former colleagues at the U.S. State Department traveled to Mexico two years ago to explore ways to use technology to reduce violence, as just one example of government-to-society diplomacy.

In other cases, different government agencies have forged their own partnerships across the border. Since 2010, American and Mexican border guards are increasingly working together to coordinate patrols. Our environmental regulators have been doing this with Mexico since at least 1994, building an extensive set of institutional linkages to manage pollution that floats unimpeded across the border. American companies might be able to outsource production to Mexico, but many of the environmental impacts of the maquiladoras that line the border slip right back across.

Some of the most dynamic connections are happening at the regional level, through a dense network of institutions, such as the U.S.-Mexico State Alliance Partnership.State legislatures along the border have regular joint meetings.The governors of the four American and six Mexican border states have met annually since 1980 through the Border Governors' Conference. This group, a kind of G-10 for the Rio Grande, creates joint workplans on everything from security to agriculture to economic development to transportation. Or at least it used to. Last year, the Mexican governor boycotted the meeting in Phoenix to protest Arizona's harsh new immigration law. This year, just one U.S. governor, Susana Martinez (a Republican) of New Mexico, attended the summit, which took place last week in Ensenada. In other words, state-to-state diplomacy can be just as dysfunctional as country-to-country, but needn't be. Governors Rick Perry (Republican of Texas), Jerry Brown (Democrat California), and Jan Brewer (Republican of Arizona) would be wise not to give up on this mechanism.

The most innovative projects are coming from outside of government altogether. Meet some of the entries to the 2011 U.S.-Mexico Cross-border Cooperation Awards. Sponsored by the North American Center for Transborder Studies at Arizona State University, the competition aims to shift public attention from violent crime to practical stories of successful cooperation. Here are four proposals and the states they affect:

  • The El Paso Museum of Art:A Cultural Crossroads for the United States and Mexico" (Texas-Chihuahua-New Mexico) has been working with its counterpart in Ciudad Juarez to organize joint exhibitions of local artists on both sides of the border.
  • Proyecto Bio-Regional de Educación Ambiental (PROBEA): "Environmental Education without Borders" (California-Baja California). Sponsored by the San Diego Natural History Museum, this alliance of environmental groups from the U.S. and Mexico works to "build environmental knowledge, awareness, skills and active participation and communication in the citizenry of Baja California, Baja California Sur, Sonora and Sinaloa, in Mexico." Kids learn about border-spanning ecosystems and take actions to help them.
  • Yuma Crossing: This cross-national alliance shows that environmental protection can lead to border security and human security. That's the aim of project to restore Hunter's Hole, a 435 acre scrubland on the border of Arizona and Sonora, turning it back into a vibrant wetland. The new marsh would not only create habitats for migratory birds and other wildlife, it would place a natural barrier across a dangerous route used by smugglers of drugs and people.

Small potatoes? Perhaps. It's certainly far from the perceived glamor and danger of eyeball-to-eyeball brinkmanship between great powers. But this week, in my Princeton course on Politics and Public Policy, we read political science articles on the critical role of civil society groups in preventing violence and sustaining vibrant democratic politics, particularly those that cross ethnic communities. More broadly, transnational partnerships and initiatives such as those listed above gradually weave social webs that do not erase borders but overlay them, building trust, resilience, and capacity. And anyone with energy and ideas can participate; local, state and national governments can facilitate and help connect different initiatives in ways that make it possible to develop synergies, distill best practices, and creates templates for others to follow.

It's government not as negotiator, funder, or imposer, but as enabler, facilitator, connector. We don't know exactly how or when we will need all these connections and relationships, but in a rapidly changing world of complex systems in which small shifts can produce very big consequences and we need to mobilize every asset we have, they put money in the foreign policy bank. In that sense, the U.S.-Mexican border is a tangible example of the foreign policy frontier.



Source

Vatican Global Finance Plan Provokes Controversy

Tuesday, 25 Oct 2011 04:23 PM

By Edward Pentin


A new Vatican document which calls for the creation of a new global authority to regulate financial markets and a tax on financial transactions has been praised by some for reminding world leaders to uphold the dignity of the poor.

But others have roundly criticized it for being out of touch with political and economic reality.

The 41 page document, drawn up by the Pontifical Council for Justice and Peace and published Oct. 24, was aimed at contributing to the upcoming G-20 summit Nov. 3-4 which will be devoted to the ongoing global economic crisis.

Titled "Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority," the Vatican said the current global financial crisis has revealed "selfishness, collective greed, and the hoarding of goods on a great scale."

It advocated a supranational authority as a possible remedy, one that places the common good at the center of international economic activity.

Although the document drew partly on the teachings of a number of popes, it is not considered official Catholic Church dogma. Vatican spokesman Father Federico Lombardi stressed that it was not from Pope Benedict and so it was not “an expression of papal magisterium.” But he did say it was an "authoritative note of a Vatican agency.”

The document said a global authority would include “a kind of central world bank” and a “set of public institutions” that will “guarantee the unity and consistency” of common decisions.

The U.N. should help establish such an authority, it said, and do so gradually without force. It should operate on the principle of subsidiarity, it added, intervening "only when individual, social, or financial actors are intrinsically deficient in capacity.” It should also transcend special interests, and not be beholden to the interests of developed nations or lobby groups.

“In this process, the primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics — which is responsible for the common good — over the economy and finance,” it said.

Among other measures, the paper proposed a transaction tax to help promote “social justice and solidarity.” It advocated the creation “of a world reserve fund” to support countries suffering from economic crises, and called for recapitalization of banks with public funds but conditional on “virtuous” behaviors aimed at developing the “real economy.”

The document warned of an “idolatry of the market” — a term Blessed John Paul II used in 1991 after the fall of Soviet communism — and said his warning "needs to be heeded without delay.” And it claimed the primary cause of the current global crisis was "an economic liberalism that spurns rules and controls" and that relies solely on the laws of the market.

Italy's main leftist party, Partito Democratico, said the transaction tax had its “full support.”

“We hope the proposal [that has been proposed] elsewhere but with little success, can be immediately applied,” said Giuseppe Fioroni, the party's head of welfare. “The document underlines the necessity to confront the crisis and change the economy with a perspective not only on personal enrichment but on the growth and welfare of the community.”

Others have praised the Vatican for reminding world leaders to uphold and protect the poor and disenfranchised, and to place the human person rather than utilitarian considerations at the center of the economy.

Kishore Jayabalan, Rome director of the Acton Institute for the Study of Religion and Liberty, a free-market think tank, welcomed the Vatican's attempt to deal with the economic crisis, but he said their conclusions were based on “political and economic ignorance rather than experience.”

Jayabalan argued that “the supranational authority” to promote the common good is God, and yet the paper “doesn't speak of God or the natural law and so neglects this substantial notion of the common good,” he said.

The idea of a global authority was a “sentimental hope,” he added, one that has always proved unworkable. It cannot command universal support because of human diversity, and any attempt to empower such an authority to enforce its commands “would most likely be considered tyrannical and therefore unjust by a large part of the world,” he said.

Dr. Thomas Woods, a Catholic senior fellow at the Von Mises Institute, a libertarian think tank, said he didn't think the document was “entirely without its merits” and welcomed its warning against “excess credit creation” by central banks and the banking industry. But he said there were “some troubling aspects,” namely that a supranational body would add another layer to a system that instead needs more radical reform.

He argued that the mistakes of the Federal Reserve (such as setting artificially low interest rates that many believe led to the housing bubble which precipitated the current crisis) show these institutions are harmful and cannot be trusted. And he added that this economic crisis came about despite a threefold increase in spending on regulation of the economy over the past 30 years.

Rather than an idolatry of the market, he said, “we have had an idolatry of the public authorities” — institutions that are “taken for granted and whose indispensability is a myth.”

The U.S. banking sector, he added, is a highly regulated cartel dominated by a central bank. “There is a grave misconception about what's really going on,” he said.

Jayabalan, a former official at the Pontifical Council, said greed and idolatry are permanently recurring temptations that require “constructive ways” to combat them. And yet “quite surprisingly for an office of the Roman Curia and from a Catholic perspective, the note does not tell us much about the spiritual battle that must take place.”

Rather than draft this note, Jayabalan said the Vatican should have drawn on the “economic wisdom of the division of labor” which would have told them “to stick to what it knows and does best.”


Source

Tuesday, October 25, 2011

Vatican note on economy the first ripple of a southern wave

Oct. 25, 2011
By John L Allen Jr









A woman carries bananas to market in Nyei, South Sudan, in this 2009 file photo. (CNS photo/Paul Jeffrey)





Commentary


Whenever the Vatican appears to lurch in a given direction, there's a tendency in Catholic circles to become obsessed with how much ecclesiastical authority the gesture or text in question carries. For the most part, it's a legitimate question; when Benedict XVI uses kneelers during Communion, for instance, people have good reasons for wondering if it's a harbinger of a policy move or simply a matter of personal taste.


Sometimes, however, fussing about the authority behind something misses the bigger picture. Reaction to Monday's note from the Pontifical Council for Justice and Peace, titled "Towards Reforming the International Financial and Monetary Systems in the Context of Global Political Authority," offers a classic case in point. (Read the document.)


To recap, the note expressed a clear rejection of "neo-liberal" economic policies (in American argot, "neo-conservative") and an equally clear endorsement of a "true world political authority" to regulate a globalized economy, one not dominated by major powers such as the United States. As a preliminary step, the document called for the creation of an institution, or several institutions, that would play the role of a "central world bank." It also offered a plug for the "Tobin Tax" on financial transactions, public recapitalization of banks and greater regulation of "shadow markets."


"The primacy of the spiritual and of ethics needs to be restored, and, with them, the primacy of politics -- which is responsible for the common good -- over the economy and finance," the note reads. "We should not be afraid to try new ideas, even if they might destabilize pre-existing balances of power that prevail over the weakest."


Critics, dismayed by the note's content, rather predictably have challenged its Vatican standing. George Weigel dismissed it as the product of a "rather small office in the Roman Curia" while Bill Donohue said it contains "neologisms" not found in the thought of Pope Benedict XVI. To be fair, there's merit to these points. The note is hardly a dogmatic definition, and on matters outside the Catechism, the Vatican rarely speaks with one voice.


Focusing on how much papal muscle the note can flex, however, risks ignoring what is at least an equally revealing question: Whatever you make of it, does the note seem to reflect important currents in Catholic social and political thought anywhere in the world?


The answer is yes, and it happens to be where two-thirds of the Catholics on the planet today live: the southern hemisphere, also known as the developing world.


It's fitting that the Vatican official responsible for the document is an African, Cardinal Peter Turkson of Ghana, because it articulates key elements of what almost might be called a "southern consensus." One way of sizing up the note's significance, therefore, is as an indication that the demographic transition long under way in Catholicism, with the center of gravity shifting from north to south, is being felt in Rome.


There are almost 750 million Catholics scattered across Africa, Asia and Latin America, and generalizations about such a vast pool of people are always hazardous. Nonetheless, on matters of sexual morality and the "culture wars," Catholics in the south generally strike Europeans and Americans as remarkably conservative -- opposed to gay marriage, anti-abortion, devoted to the traditional family. When the conversation shifts to economic policy and geopolitics, however, Catholic opinion in the developing world often comes off in the West as strikingly progressive.


To be specific, Southern bishops, priests, religious and laity often are:



  • Skeptical of free-market capitalism and unregulated globalization;

  • Wary about the global influence of the United States;

  • Pro-United Nations and pro-global governance;

  • In favor of a robust role for the state in the economy.

A few examples flesh out that picture.


In a 2002 issue of Theological Studies, the late Dean Brackley and Thomas Schubeck outlined a "Latin consensus" on the economy, expressed not just by avant-garde theologians in Latin America but in official church documents. They described it this way: "The market is a useful, even necessary means for stimulating production and allocating resources. However, in the 'new economy,' overreliance on the market has aggravated social inequality, further concentrated wealth and income, and left millions mired in misery."


Catholic leaders in other parts of the global south hold similar views. For instance, in a 127-page report issued in 2004, the Catholic bishops of Asia declared that "neoliberal economic globalization" destroys Asian families and is the primary cause of poverty on the continent.


In June 2005, a group of Catholic bishops from Eritrea, Ethiopia, Kenya, Malawi, Tanzania, Sudan, Uganda, Zambia, Somalia and Djibouti declared, "We are particularly horrified by the ravages of unbridled capitalism, which has taken away and stifled local ownership of economic initiatives and is leading to a dangerous gap between the rich few and the poor majority."


Now consider the language of the Vatican note, which breathes much the same air: "What has driven the world in such a problematic direction for its economy and also for peace? First and foremost, an economic liberalism that spurns rules and controls ... an economic system of thought that sets down a priori the laws of market functioning and economic development, without measuring them against reality, runs the risk of becoming an instrument subordinated to the interests of the countries that effectively enjoy a position of economic and financial advantage."


One can certainly debate the merits of those perceptions, or the policy moves that might flow from them. Yet to dismiss all this as nothing more than the rogue perceptions of an isolated Vatican department ignores the demographic and cultural realities of the church in the 21st century.


This is not the dying echo of warmed-over European socialism. For better or worse, it's the first ripple of a southern wave.


[John L. Allen Jr. is NCR's senior correspondent.]


Source


Mgr. Vegliò: “We must guarantee everyone a dignified life”


10/25/2011

Refugees



Wth this message, Benedict XVI referred to the challenge that lies ahead for the new evangelisation: warmth and meetings between people


Alessandro Speciale
vatican city

Faced with a world that is becoming less and less homogenous and increasingly complex as a result of migration, the Church is called to “review its methods, its ways of expression and its language,” taking into account this new reality.

This is a challenge which Antonio Maria Vegliò, President of the Pontifical Council of Pastoral Care for Migrants and Itinerants, is acutely aware of. The Archbishop presented the Pope’s message today, ahead of the World Day of Migrants and Refugees, which will be celebrated on 15 January 2012.

“It is obvious – Mgr. Vegliò explained – that the mix of nationalities and religions is growing exponentially. In Countries with Ancient Christian history, we can see the penetration of secularisation and increasing insensitivity to the Christian faith, whilst in other Countries with non Christian majorities, there is an emerging influx of Christianity.”

At the same time, all Countries are “teeming with new sectarian movements,” some of which aim to “eliminate Christianity’s social and symbolic visibility,” as if God and the Church did not exist.”

It is not just the developed Western Countries that are faced with the challenge of migration. According to the International Organisation for Migration’s (IOM) World Migration Report 2010, in recent years, the United States have been the Country with the greatest influx of migrants, followed by Russia, then Germany, then Saudi Arabia.

Most importantly, it is mainly developing Countries that become responsible for refugees and asylum seekers. This is according to the Secretary of the Pontifical Council, Mgr. Joseph Kalathiparambil.

The report by the UN High Commissioner for Refugees stated that “4/5 of the world’s refugees are taken in by developing Countries, in both absolute terms and in proportion to their economic systems.” Pakistan is the Country with the greatest number of refugees (1.900.000), followed by Iran (1.000.000) and Syria (1 million).

Mgr Kalathiparambil went also said “this is happening at a time characterised by growing hostility towards refugees in a number of industrialised Countries.”

Then there is another category of migrants whom the Pope focused on in his message: students studying abroad. These “exceed three million and their number is expected to rise to 7 million by 2025,” the Under Secretary to the Pontifical Council, Fr. Gabriele F. Bentoglio said.

“Over 50% of the total influx of international students registered in 2008 came from about twenty different Countries, with most coming from China, Poland, India and Mexico,” he added.

Between 30 November and 3 December, the Pontifical Council for the Pastoral Care of Migrants and Itinerants, promoted the “Third World Congress for the Pastoral Care of Foreign Students” in Rome.

There will be 123 delegates (24 Bishops, 38 priests, 9 clerics, 26 lay pastoral assistants and 26 university students), from Europe (42 delegates from 14 Countries), from Africa (28 from 9 Countries), from America (20 from 7 Countries), from Asia (14 from 5 Countries) and 3 from Australia, as well as some representatives from religious Institutes, lay associations and international and regional organisations.

This special attention to “migrant” students - Fr. Bentoglio explained – comes as a result of THE Pope’s request for young university students to meet “genuine Gospel witnesses and example figures of Christian life,” who could encourage them to “play active roles in the new evangelisation.”



The Vatican’s Radical Ideas on Financial Reform

By Amy Sullivan @sullivanamy October 24, 2011



(L-R) Tapestries showing Bonifacia Rodriguez De Castro of Spain, Guido Maria Conforti of Italy and Luigi Guanella of Italy hang from Saint Peter's Basilica as Pope Benedict XVI leads a mass for their beatification in Saint Peter's Square at the Vatican October 23, 2011. REUTERS/Giampiero Sposito


Those politicians who think the Dodd-Frank law went too far in attempting to reform Wall Street will likely need smelling salts after taking a look at a proposal for reforming the global financial system that was released by the Vatican on Monday. The proposal’s centerpiece is a call for the formation of a global political authority that would, among other things, possess broad powers to regulate financial markets. The reality of globalization, says the document, necessitates a “gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities.” The Vatican envisions this global authority playing a role not just in overseeing financial markets, but also disarmament and arms control, food security and peace efforts.
Calling into question the entire foundation of neo-liberal economics and proposing one world financial order? You never know what those radicals over at the Pontifical Council for Justice and Peace will come up with next.

The 41-page document, “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority,” (it’s no wordier than some of the signs at the protests) can be seen as a practical extension of Pope Benedict XVI’s 2009 encyclical Caritas in Veritate. In that document, Benedict argued that there is “an urgent need of a true world political authority” to address problems of economic inequality both within and between countries. Writing in the wake of the financial meltdown, Benedict identified the roots of the crisis as economic, financial, and also moral. It is not possible, he suggested, to pursue the common good while also glorifying the values of utilitarianism and individualism.
The writers of this new Vatican proposal also hammered the values of the financial world, writing that “the crisis has revealed behaviors like selfishness, collective greed and the hoarding of goods on a great scale.” At fault, they say, is “an economic liberalism that spurns rules and controls.” It’s a fierce denunciation of the free-market theology embraced by Republicans and Democrats alike, and likely to put more than a few Catholic politicians in the uncomfortable position of either ignoring or downplaying the Vatican’s position on financial reform. I’ve put in calls to Speaker Boehner and Paul Ryan’s offices, and will update if and when they respond with comment.

Concern about the consequences of unfettered capitalism is not new for the Vatican, nor is the institution’s belief in the need for global authorities. (The document cites the teachings of popes over the past 40 years on the need for global institutions that can look beyond national interests.) But this proposal has a very specific context. This past June, the Vatican hosted a summit on “Ethics for the Business World” that examined possible options for ethical oversight in the post-crisis financial world, and which included leaders from banking, manufacturing and financial sectors.

Officials at the Vatican timed the document’s release to precede the G-20 Summit in France that will happen the first week of November. Of course, the document’s release also comes amid the campaign for the GOP presidential nomination. I would dearly love to hear a question about the proposal posed in an upcoming debate. The language of a “world global authority” to which nations transfer part of their powers seems almost drawn from a list of Phrases That Freak Out The Tea Party. But if Republicans can spend two hours talking about 9-9-9 on national television, surely they can spare a few minutes for the Vatican’s proposed financial reforms.


Source: http://swampland.time.com/2011/10/24/the-vaticans-radical-ideas-on-financial-reform/#ixzz1bpYyisJb

Monday, October 24, 2011

"The final movements will be rapid ones"...


We are living in the time of the end. The fast-fulfilling signs of the times declare that the coming of Christ is near at hand. The days in which we live are solemn and important. The Spirit of God is gradually but surely being withdrawn from the earth. Plagues and judgments are already falling upon the despisers of the grace of God. The calamities by land and sea, the unsettled state of society, the alarms of war, are portentous. They forecast approaching events of the greatest magnitude. {9T 11.1}

The agencies of evil are combining their forces and consolidating. They are strengthening for the last great crisis. Great changes are soon to take place in our world, and the final movements will be rapid ones. {9T 11.2}

The condition of things in the world shows that troublous times are right upon us. The daily papers are full of indications of a terrible conflict in the near future. Bold robberies are of frequent occurrence. Strikes are common. Thefts and murders are committed on every hand. Men possessed of demons are taking the lives of men, women, and little children. Men have become infatuated with vice, and every species of evil prevails. {9T 11.3}

The enemy has succeeded in perverting justice and in filling men's hearts with the desire for selfish gain.

Testimonies for the Church, vol. 9, p. 11.


Vatican Issues Major Document on Global Financial Reform


Posted at: Monday, October 24, 2011 08:46:53 AM
Author: James Martin, S.J.

From CNS with link to full text of the document here:

VATICAN CITY — A Vatican document called for the gradual creation of a “world political authority” with broad powers to regulate financial markets and rein in the “inequalities and distortions of capitalist development.” The document said the current global financial crisis has revealed “selfishness, collective greed and the hoarding of goods on a great scale.” A supranational authority, it said, is needed to place the common good at the center of international economic activity.

The 41-page text was titled, “Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority.” Prepared by the Pontifical Council for Justice and Peace, it was released Oct. 24 in several languages, including a provisional translation in English. The document cited the teachings of popes over the last 40 years on the need for a universal public authority that would transcend national interests. The current economic crisis, which has seen growing inequality between the rich and poor of the world, underlines the necessity to take concrete steps toward creating such an authority, it said.

One major step, it said, should be reform of the international monetary system in a way that involves developing countries. The document foresaw creation of a “central world bank” that would regulate the flow of monetary exchanges.

The document also proposed:

– Taxation measures on financial transactions. Revenues could contribute to the creation of a “world reserve fund” to support the economies of countries his by crisis, it said.

– Forms of recapitalization of banks with public funds that make support conditional on “virtuous” behavior aimed at developing the real economy.

– More effective management of financial “shadow markets” that are largely uncontrolled today.

Such moves would be designed to make the global economy more responsive to the needs of the person, and less “subordinated to the interests of countries that effectively enjoy a position of economic and financial advantage,” it said.

In making the case for a global authority, the document said the continued model of nationalistic self-interest seemed “anachronistic and surreal” in the age of globalization.

“We should not be afraid to propose new ideas, even if they might destabilize pre-existing balances of power that prevail over the weakest,” it said.

The “new world dynamics,” it said, call for a “gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities.”

“In a world on its way to rapid globalization, the reference to a world authority becomes the only horizon compatible with the new realities of our time and the needs of humankind,” it said. Helping to usher in this new society is a duty for everyone, especially for Christians, it said. --CNS

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Sunday, October 23, 2011

La. Gov. Bobby Jindal wins re-election

Updated 19h 10m ago


BATON ROUGE, La. (AP) – Louisiana Gov. Bobby Jindal on Saturday easily coasted to a second term, winning in a landslide election after failing to attract any well-known or deep-pocketed opposition.






By Richard Alan Hannon, AP
Louisiana Gov. Bobby Jindal delivers his victory speech.















The 40-year-old Republican overwhelmed nine competitors in the open primary, where a candidate wins the race outright if he or she receives more than 50 percent of the vote. With 99 percent of precincts reporting, Jindal had received about 66 percent of the total vote.

His closest competitor, Tara Hollis, a Democrat from north Louisiana, garnered nearly 18 percent of the total vote. All of the other candidates were in single digits.

"I will use every day, every hour of these next four years to make Louisiana the very best that we can be. I don't believe in resting on our past accomplishments. I don't believe in taking time off," Jindal told a packed hotel ballroom of supporters in Baton Rouge.

Jindal piled up $15 million in campaign cash from around the nation and attracted no Democratic challengers with statewide name recognition or fundraising heft. He's had consistently high approval ratings since taking office in 2008.

His win comes amid the virtual collapse of the Democratic Party's clout in the state. In the current term, Republicans have gained control of all seven statewide elected posts and both chambers of the legislature. Hollis was an outsider to the political establishment and was unable to drum up the cash needed to challenge Jindal or mount a big-ticket advertising competition.

The first Indian-American governor in the United States, Jindal is considered by some a possible presidential contender in the future. He recently published a book and regularly appears on national news shows, but he ruled out a 2012 run.

Still, his brand of conservatism and refusal to raise taxes has resonated outside the state. His new term begins in January.

The race that received more attention in Louisiana was the one for lieutenant governor, because the officeholder is next in line should Jindal step down because of his national political ambitions.

Incumbent Jay Dardenne, who took office after a special election last year, had 53 percent of the ballot in defeating Plaquemines Parish President Billy Nungesser with 47 percent , results showed with 99 percent of precincts reporting. Like Jindal, Nungesser was a vocal critic of the federal response to the massive Gulf oil spill.


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Global Financial Regulation: A Goal Many Espouse But Can It Be Done?


Police arrest an "Occupy Wall Street" protester near Zuccotti Park in New York City on October 14.
October 23, 2011
By Ron Synovitz
Calls for a more coordinated system of international financial regulation have been growing as the Occupy Wall Street protests in New York inspire similar demonstrations around the world.

Since activists in September began the Occupy Wall Street movement in New York's financial district, protesters have been calling attention to unfulfilled promises for tighter regulation of the financial institutions that they blame for the global economic crisis.

Indeed, many reforms pledged by politicians as the global economic crisis unfolded in 2008 have been blocked or delayed -- leaving only modest changes to the way the world's financial system is regulated.

Frustration with the authorities dragging their heels on reform has now made itself felt on the streets of New York and other U.S. cities.

"It's clear that people feel like the politicians have not been prioritizing the needs of working people," says Mark Bray, a spokesman for the Occupy Wall Street protest movement.

"Even if the political parties change, when the economic crash occurred and the Wall Street bankers speculated and gambled away people's lives, nevertheless, working people are the ones who suffer and the financial institutions are the ones that continue with business as usual."

Giving Voice To Frustrations

U.S. President Barack Obama recently claimed the Occupy Wall Street movement gives voice to broader frustrations about how financial sector lobbyists work to prevent more stringent regulation, despite the fact that the United States has just endured "the biggest financial crisis since the Great Depression."

"And yet you're still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive practices that got us into this problem in the first place," the president said.

On a global level, critics argue that international regulators have failed to keep pace with the globalization of financial markets. But calls for stronger global regulation raise the question of who should serve as the police and courts for international financial markets.

Masked protesters warm themselves at a fire after setting up camp in front of the European Central Bank in Frankfurt.
​​Many economists say the problem is not a lack of global institutions. Rather, they argue, there is neither a hierarchy between existing regulators nor a central power that has the authority to force urgent action.

In other words, when it comes to regulating global financial markets, no one is really in charge of anyone else -- not in the way, for example, that the World Trade Organization has the authority to regulate and enforce international law in trade disputes.

Indeed, the International Monetary Fund and the World Bank have oversight roles that allow them to monitor international finance. But neither is a financial regulator with the powers to do things like set minimum capital requirements for banks or draw up international accounting standards.

Compliance With Standards Is Voluntary

Such regulations are drawn up by the Basel Committee on Banking Supervision, which brings together central bankers from more than two dozen countries. But the Basel Committee works on the basis of consensus among its members. Compliance with its standards is voluntary.

The International Organization of Securities Commissions (IOSCO), which groups together financial regulators from more than 100 different countries, also works on the basis of consensus and voluntary compliance by its members.

Nobel Prize-wnning economist Joseph Stiglitz believes banking lobbyists are slowing down reform.
​​In 2009, the G20 established the Financial Stability Board to promote international financial stability and transparency. It brings together all of the G20 finance ministries and central bankers as well as international financial bodies.

But the IOSCO and the Basel Committee have been reluctant to take instructions from the Financial Stability Board or its predecessor, the Financial Stability Forum.

Even within regional economic groups, such as the eurozone, national governments have hesitated to surrender their sovereignty to a stronger central state in Brussels when it comes to fiscal federalism in Europe.

Lack Of Interaction

This is still the case despite the sovereign debt crisis in Europe and the pressures the euro currency has been under.

"What is lacking is really a more fundamental discussion about how economic institutions, economic policies and political institutions interact in Europe -- and how we can move this interaction forward," says Anke Hassel, a professor of public policy at the Hertie School of Governance in Berlin.

"Obviously, the European economy is at a crisis point and at a turning point. And we need new ways of dealing with that."

Eddy Wymeersch, the former chairman of the Committee of European Securities Regulators, suggests that the global economic crisis has brought the world further from establishing some form of global financial authority.

The 2001 Nobel laureate for economics -- former World Bank chief economist Joseph Stiglitz -- believes that banking industry lobbyists have been responsible for slowing down the drive toward regulatory reform.

Underlying Problems

"There was a slight attempt [at reforming financial sector regulation] after 2008 but it was beaten back by the banks," he says. "A little bit happened, but for the most part it was beaten back. And we haven't dealt with the underlying problems."

"And in fact, some of those underlying problems have gotten worse -- [banks that are] too big to fail, inequality, all those things have actually been exacerbated by the crisis itself."


Britain is a case in point when it comes to financial sector lobbyists and national interests conflicting with calls for global regulatory reforms.

At the start of the global economic crisis, the British government initially said its system of financial regulation was no longer suitable and needed to be replaced with a framework to promote "responsible and sustainable banking."

In a bid to bring banks back toward more traditional banking practices -- rather than acting as risk-taking hedge funds -- the British government proposed regulatory powers that would discourage risky bank lending.

The British Treasury also argued that banks which pose a bigger risk to the financial system as a whole -- either because of their size or inter-connections with other banks -- should face greater regulation.

But in the end, many of the proposed reforms stalled amid arguments from figures within the financial sector that tighter regulation could cost Britain its role as a financial hub for Europe.

EU proposals for tighter hedge fund regulation were resisted by London as "anti-competitive."

The British government concluded that regulation must be agreed at a global level so that firms don't simply migrate to countries with less stringent regulations.


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