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City traders who made millions of dollars in profit by cashing in on the falling share prices of leading banks are "bank robbers" and "asset strippers," the Archbishop of York has said.
In an address at the Worshipful Company of International Bankers' annual dinner on Wednesday, Dr. John Sentamu said that the financial world appeared to be governed by “Alice in Wonderland” rules.
“The share value of a bank is no longer dependent on the strength of its performance, but rather on the willingness of the Government to bail it out,” he said.
Sentamu criticized in particular a practice known as short-selling, in which traders deliberately undersell shares of troubled banks and financial institutions, gambling that a further fall in prices will enable them to make profit by buying the shares back at a cheaper price.
His criticism follows the collapse of U.S. investment bank Lehman Brothers and the announcement of British lender HBOS' takeover by rival Lloyds TSB.
"To a bystander like me, those who made £190m (over 352 million U.S. dollars) deliberately underselling the shares of HBOS, in spite of a very strong capital base, and drove it into the arms of Lloyds TSB, are clearly bank robbers and asset strippers," said Sentamu.
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"We find ourselves in a market system which seems to have taken its rules of trade from Alice in Wonderland," he said.
Sentamu went on to criticize the way in which huge sums of money were being put forward to bail out troubled banks while governments remain reluctant to come up with the funding necessary to eradicate poverty.
"One of the ironies about this financial crisis is that it makes action on poverty look utterly achievable. It would cost $5 billion to save six million children's lives,” he said.
"World leaders could find 140 times that amount for the banking system in a week. How can they tell us that action for the poorest is too expensive?"
World leaders will meet on Thursday in New York for a special UN session on poverty in which UN Secretary General Ban Ki-Moon will attempt to revitalize financial commitment to the Millennium Development Goals to halve global poverty by 2015.
