To send content items to your account,
please confirm that you agree to abide by our usage policies.
If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account.
Find out more about sending content to .
To send content items to your Kindle, first ensure firstname.lastname@example.org
is added to your Approved Personal Document E-mail List under your Personal Document Settings
on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part
of your Kindle email address below.
Find out more about sending to your Kindle.
Note you can select to send to either the @free.kindle.com or @kindle.com variations.
‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi.
‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Pope Pius XII has been identified as the final pope of the “Modern” or “Leonine” school of social thought, stemming from the time of Pope Leo XIII. Key components of thjis school include support for political democracy, support of workers’ rights, support for moderate social welfare policies, and encouragement of lay movements like Catholic Action. These strategies were combined with a philosophical and theological emphasis on Natural Law, a communitarian vision of the human person, and a hierarchical understanding of church and society. Pope Pius XII brought these teachings to the laity in an effort to promote human welfare. Through the principle of subsidiarity, he offered resistance to totalitarian governments, and most importantly, he defended the family as society’s foundational cell, the “natural nursery and school where the man of tomorrow grows up and is formed.” He continued the Vatican practice of forming alliances with democratic nations, but under Pius the Church formed a much closer alliance with the United States. In so doing this, he largely repudiated the so-called “phantom heresy” of Americanism.
Modern Catholic social teaching, especially as articulated by the popes, the curia, and the bishops, has said little directly and formally about systems of finance. Where these voices have spoken, they have encouraged sound practices in broad outline and criticized obviously unsound and immoral behaviors. Unfortunately, their own financial management practices have not offered good models for what might be done. Nevertheless, key concepts like the logic of gift, the idea of solidarity and the common good, and the vision of integral human development, coupled with the competence and integrity of Catholics working in systems of finance, can imagine possibilities and generate inspiring models of professional conduct. The key to making this work well is to understand and embrace the possibility of pursuing work in the system of finance as a genuine Christian vocation that in its own way genuinely addresses human needs and helps to build the Kingdom of God. In service of this, the pastors of the Church at every level can and should affirm this profession as a vocation, encourage Catholics to bring their faith to their work, avoid unnecessary criticism of business practices, and assist business professionals to see more clearly the challenges and possibilities they face.
The common good (bonum commune) has, since antiquity, referred to the aim of social and political association, and was particularly prominent in medieval Christian political theology. Since St. John XXIII’s 1961 encyclical letter, Mater et magistra, ecclesiastical statements about social teaching have employed a formulation of the common good, usually in the version that appeared in the Second Vatican Council’s 1965 Pastoral Constitution for the Church in the Modern World, Gaudium et spes, as “the sum of those conditions of social life that allow social groups and their individual members relatively thorough and ready access to their own fulfillment.” This chapter discusses the origins and development of this formulation as well as the ways that it has been used in subsequent Catholic Social Teaching. While it has sometimes been interpreted as an “instrumental” account of the common good, the sources and uses of the notion suggest that it is the particularly modern political component of a fuller notion of the common good continuous with the tradition. In particular, the recent formulation is concerned to limit the power of the modern state and protect the dignity of the human person in the challenging conditions of political modernity.
This chapter is an analytical summary of Rerum novarum. Its goal is to illuminate the purpose of the encyclical and the main lines of Pope Leo’s reasoning, his key premises and central ethical conclusions, and in this way, to articulate as clearly as possible the teaching that comprises Rerum novarum. Rerum’s influence on Catholic teaching and practice is most manifest in the Church’s “social teaching,” which in various ways identifies the encyclical as its founding statement. This identification is made in the names and citations of some of the most important papal contributions to Catholic Social Teaching (CST) and is pervasive throughout the corpus of CST. And it is revealed in the ways in which the accepted principles of CST are present or anticipated in Rerum novarum. Although the chapter does not undertake the large and formidable task of characterizing CST, it does indicate how these principles figure in Pope Leo’s analysis. It also underlines the extent to which these principles are not the main point of Rerum novarum, but stand in the service of the moral and religious reform urged by Pope Leo.
It has been an enduring concern of institutional economics and critical realism to understand how individuals are able to exercise agency in the context of social structures, and to maintain appropriate connections, separations and balances between these two levels of causal power. This paper explores the contribution of Alasdair MacIntyre's neo-Aristotelian philosophy to the topic. Empirical data are provided from the career narratives of senior Scottish bankers recalled in the aftermath of the global financial crisis of 2007/8. The method of the study is interpretive, using themes drawn from MacIntyre's writings. These bankers faced moral choices as tensions developed between their own professional standards and the new corporate goals of the banks. We discuss MacIntyre's understanding of individual moral agency as a narrative quest in the context of different types of institution with different and often conflicting ideas about what constitutes good or right action. Habituation and deliberation are important in enabling action, but fully developed moral agency also depends on individuals being able to make choices in the space opened up by tensions within and between institutions.
This article explores the process of the formalisation of the Swedish financial market, through an analysis of commercial bank lending in the late nineteenth and early twentieth century. The analysis shows that the incorporation of Swedish business around the turn of the century led to a shift from lending primarily backed by name security to an increased use of mortgage and shares as collateral – after the severe stock market crash in 1920/1 mortgage lending surpassed lending against shares as collateral. We interpret this change as an important part of the formalisation process of the financial system, as it standardised the valuation process and allowed creditors to exit on a secondary market. Our statistical testing points to increased financial wealth and liquidity represented by the broad money supply, plus population growth and urbanisation, as important forces behind this formalisation.
Much actuarial work is underpinned by the use of economic models derived from mainstream academic theories of finance and economics which treat money as being a neutral medium of exchange. The sustainability of a financial system whose understanding is based on a limited view of the role of money has increasingly been subject to criticism. In order to identify needed research programmes to address such criticisms and improve these disciplines, we sought to understand the current state of knowledge in economics and finance concerning the link between monetary and financial factors and sustainability. We have approached this through a search for relevant literature published in the highest-rated academic journals in economics, finance and the social sciences for titles and abstracts containing both references to the financial system on the one hand, and sustainability and environmental factors on the other. The systematic search of a universe of 125 journals and 355,000 articles yielded the finding that surprisingly few research papers jointly address these concepts. Nevertheless, we find that current research shares a broad consensus that the implications of the growth-oriented economic model results in an increasingly interconnected and fragile financial system whose participants are not incentivised to fully recognise the natural environment and resource constraints. We further observe that the prescriptions offered are relatively limited and small-scale in their outlook and that there is a vital need for further research, particularly for actuaries who are required to take a longer-term outlook. The Resource and Environment Board has supported this work with two key objectives: first, to identify research that may have direct application to actuarial work and, second, to identify gaps in academic research that would help drive the Institute and Faculty of Actuaries’ own research agenda. With this in mind there are three further areas of potential actuarial research. These are the policy aim of pursuing growth without limit within a finite ecosystem; discount factors as the primary means of capital allocation and investment decisions; and the use of gross domestic product as the key metric of economic activity and success. We also conclude that further academic research is urgently needed to understand the sustainability of the banking and monetary system.
In this article, we investigate a possible conflict between two core objectives of cooperatives, members’ income, and continuity, by examining the link between debt and the price paid to producers for Bordeaux wine cooperatives, according to their downstream strategies: (1) the traditional strategy, which is to sell wine in bulk to négociants; (2) joining a federation of cooperatives which blends and puts the wine in the retail market; and (3) vertical integration. We show that downstream strategies are related to different lending regimes, making the relationship between banks and cooperatives a key issue for the lifecycle of cooperatives. (JEL Classifications: D230, G320, Q130)
Why do private banks lend preferentially to politically connected firms? Focusing on the case of Egypt during the later years of Mubarak's rule, we identified politically connected firms, and we documented, using the Orbis corporate data on large firms in Egypt, that they received a disproportionate amount of the loans going to the private sector during 2003–11. We then investigated the determinants of their borrowings, and we found evidence that connected firms were more attractive to banks both because they made larger profits, and because they were seen to be implicitly guaranteed by the state against failure. We also found evidence that non-connected firms had a lower demand for loans.
This article argues that migration and investment from India moved in tandem to chart the evolution of transnational Indian business in the twentieth century, first toward Southeast Asia and Africa and later toward the United States, Europe, and West Asia. With a focus on the banking and diamond sectors, the overseas investment project of the Aditya Birla Group, and the transnational linkages of India's one hundred richest business leaders, the article locates important events, policies, and actors before economic liberalization in 1991 that laid the foundation for subsequent globalization of Indian firms.
We study liquidity effects and monetary policy in a model with fully flexible prices and explicit roles for money and financial intermediation. Banks hold some fractions of deposits and money injections as liquidity buffers. The higher the fraction kept as reserves, the less liquid the money is. Unexpected money injections raise output and lower nominal interest rates if and only if the newly injected money is more liquid than the initial money stocks. If banks hold no liquidity buffers, liquidity effects are eliminated. In an extended model with temporary shocks, we show that failure to withdraw state-contingent money injections does not make the stabilization policy neutral, though the economy may undergo higher short-run fluctuations than otherwise. Under this circumstance, the success of stabilization policy relies on unexpected money injections being more liquid than the initial money stock.
This article studies the relationship between Bank and Treasury during the War of the Spanish Succession. It examines two new series of Exchequer bills implemented in 1707 and 1709. Far from being loans-for-rents contracts, the principal aim was to accommodate war-related pressures on the nation's monetary system by manufacturing a substitute for scarce specie. The article also shows there was a covert struggle within the financial community for access to the specie flows associated with the nation's system of public finance.
The financial strains of the Revolutionary and Napoleonic Wars had a significant impact on
the Bank of England. In its position as banker to the state and manager of the
state's debt, it experienced a significant increase in workload and thus was forced
rapidly to expand its workforce. From a complement of around 300 in the mid 1780s, the number
of clerks employed had increased to over 900 in 1815. Using a unique set of records preserved
in the Bank's archives, this article investigates the backgrounds and skills of the
men recruited during the expansion of the early nineteenth century. It finds a significant gap
between the skills required by the Bank and the skills possessed by its potential
The legal and regulatory aspects of Islamic banking present a challenge to most financial and regulatory authorities. To many observers, legal and regulatory complexity in this respect stems from the link between the banking business and Islamic law. Compliance with some Islamic rulings forces the sector to operate an unusual business model, which is different from that of their conventional counterparts. After expounding the ideological foundation of Islamic banking and the sector's evolution, this article examines the genesis of the legal and regulatory challenge by conducting a compatibility analysis between Islam and banking. It will be argued that the conceptions of Islam and banking ought not to conflict, which means that achieving regulatory equilibrium in relation to Islamic banking is possible.
The institutional environment of Portuguese banking during the golden age years of economic growth (1950–73) has been criticised in many instances, at the time and in recent literature. Direct observers of the period as well as historians have stressed two main aspects of that environment: excessive protection of existing banks, allowing them to obtain high rents, which represented a disincentive for them to compete and innovate; excessive concentration of their activity on short-term commercial paper, thus preventing them from contributing to finance growth. There seems to be a contradiction here, however, with the high growth rates of the years 1950 to 1973. The apparent contradiction is not limited to Portugal, in fact, as rapid growth in many economies in that period occurred within a framework of heavily regulated financial systems. This is the ‘financial paradox’ of the golden age. Portugal is an interesting case in the international perspective. As in the rest of the western world, legislation repressed banking quite tightly, but banks circumvented the law and competed with each other. The signs of competition were visible mostly in two dimensions: the growth of time deposits and geographical expansion.
Until 2008, Ireland's banks had a solid reputation. Its two long-established banks could trace their origins back to the beginnings of joint-stock banking in 1825. Few banks of consequence had failed in the interim. The last such failure, the focus of this article, was that of the Munster Bank in 1885. That event tells us much about the history of Irish banking before recent events.
This paper applies panel cointegration tests and panel vector error correction models for 17 OECD countries and considers cross-sectional dependence and structural breaks to investigate the interrelationship between an insurance market's development and real output, controlling for banking activities. We first obtain evidence of a fairly strong long-run equilibrium relationship among them. Second, we find that insurance market development has positive effects on real output and that banking activities have an unfavorable, if not negative, effect on real output. In fact, insurance market activity is much more productive than banking sector activity. Finally, there exists bidirectional causality between insurance premiums and economic growth in the long run, suggesting the existence of the feedback hypothesis for the insurance–output nexus.
In the seventeenth century, Amsterdam and London developed distinctive innovations in finance through both banks and markets that facilitated the growth of trade in each city. In the eighteenth century, a symbiotic relation developed that led to bank-oriented finance in Amsterdam cooperating with market-oriented finance in London. The relationship that emerged allowed each to rise to unprecedented dominance in Europe, while the respective financial innovations in each city provided the means for the continued expansion of European trade, both within Europe and with the rest of the world. The increasing strains of war finance for the competing European powers over the course of the eighteenth century stimulated fresh financial innovations in each city that initially reinforced the symbiosis of the two centers. The external shocks arising from revolutionary movements in America and France, however, interrupted the relationship long enough to leave London as the supreme financial center.
This paper develops a search-theoretic model to study the interaction between banking and monetary policy and how this interaction affects allocation and welfare. Regarding how banking affects the welfare costs of inflation, we find that, with banking, inflation generates lower welfare costs. We also find that lowering inflation improves welfare not just by reducing consumption/production distortions, but also by avoiding financial intermediation costs. Therefore, understanding the nature of financial intermediation is critical for accurately assessing the welfare gain from lowering the inflation rate. Regarding how monetary policy affects the welfare effects of banking, we find that, when the inflation is low, banking is not active in channeling liquidity; when inflation is high, banking is active and improves welfare; and when inflation is moderate, banking is active but reduces welfare. Owing to general-equilibrium feedback, banking is supported in equilibrium even though welfare is higher without banking.