Economist proposes positive response to financial crisis

"As well as having a charity fund, why hasn’t your church got an interest-free loan fund?" international economist Dr Paul Mills challenged conference participants in Cambridge this week.

Warning that politicians and governments still haven’t recognised that the UK is in the midst of a financial pandemic, Dr Mills suggested that Christians should take a lead in using money to build relationships within extended families and their communities, for instance by investing in local businesses or providing housing equity for family members or others in their congregations.

Speaking of the great opportunities, as well as the great perils, presented by the worse economic crisis since the 1930s, he said governments should promote non-debt forms of house purchase and should stop subsidising corporate indebtedness and bank leverage.

The former adviser to the Treasury, who now works for the IMF, also argued that banks should be made smaller and easier to close, explaining that banks "too-big-to-fail" are "too big to exist".

However, Dr Mills fears that when the immediate crisis passes, vested interests will reassert themselves, preventing the necessary reforms that could prevent the debt-driven cycle of ‘boom and bust’ again in the future.

Speaking in a strictly personal capacity at a conference organised by the social reform charity the Jubilee Centre, Dr Mills offered a positive and uniquely Christian contribution to the current debate in which policy makers, bankers, and concerned citizens alike are all looking for a new model of finance.

For more than 25 years, the Jubilee Centre has explored whether there is a Christian-based alternative to socialism and capitalism and whether the Bible has anything distinctive to say about public policy beyond general goals such as stewardship and justice.

Dr Mills has worked at the UK Treasury and the UK Debt Management Office. He currently works for the IMF, where his interests include global financial stability, the US financial system, innovative risk transfer, climate change and financial markets, and Islamic finance, although his contribution to the conference was in a personal capacity only.