FaithWorld

from Breakingviews:

Pope’s “authentic” economics make sense

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Pope Francis is a Jesuit, a Catholic order which has traditionally, among other things, served the rich and powerful as teachers and confessors. At its best, a Jesuit education inspires the mighty to serve the lowly. The Pope’s address to the business and political leaders assembled at the World Economic Forum at Davos fits right into that tradition.

He flatters the “innovative” for “improving the lives of many people by their ingenuity and professional expertise.” Then he hits. Davosians, he says, “can further contribute by putting their skills at the service of those who are still living in dire poverty.”

In other words, if you are clever enough, and determined enough, to rise to Davos-level, you should do more to help those who cannot help themselves. It’s hard to disagree.

Almost all the delegates have a surplus of something valuable – money, knowledge or influence. Almost all of them waste that surplus, by the Pope’s standards. Francis thinks they should invest the surpluses in what the bishop of Rome calls “the life of humanity.” If they wanted to they could do much more to promote: “an inclusive approach which takes into consideration the dignity of every person and the common good.”

from Davos Notebook:

Will there be charitable action at Davos?

Reuters Editor Jennifer Ablan would like to see a different kind of monetary stimulus come from Davos this year -- charitable giving:

Islamic finance’s reputation as “safe” is a myth: Qatar regulator

saudi-bankers

Traders at the Saudi Investment Bank in Riyadh, 8 Oct 2008/Fahad Shadeed

It’s a myth to assume Islamic finance products are safer than conventional products and underlying risks should be studied more carefully, Qatar’s top regulator said at the Davos World Economic Forum meeting on Wednesday. Despite being billed as a safer alternative to traditional banking because assets must underpin deals, Islamic bondholders have found they may not have any more legal safeguards than conventional counterparts in the event of default.

Such issues were highlighted after sukuk — or Islamic bonds — had the first ever defaults last year.  Sukuk, one of the flagship products in the $1 trillion Islamic finance industry, are structured as profit-sharing or rental agreements and returns are derived from underlying assets because Islamic laws prohibits paying or earning interest.

“There is some assumption that some of it is cosmetically more comforting, but when so many Islamic instruments are now trying to mimic the effect of conventional products, you need to examine if they carry the same risk profile,” Philip Thorpe, chief executive of Qatar Financial Center Regulatory Authority, told Reuters.