Lord Brian Griffiths of Fforestfach is an especially good candidate for the Register’s 2008 year-in-review issue. The member of the British House of Lords was one of the few to predict the year’s current financial crisis. He saw it coming in 2005 when he chaired a commission on the issue of personal debt.

As vice chairman of the banking group Goldman Sachs, Lord Griffiths has also witnessed firsthand the turmoil that has stricken the world economy.

A committed Anglican and a friend of the Acton Institute, a think tank which tries to foster Christian values in the market economy, he spoke with Register correspondent Edward Pentin Dec. 7 about the reasons for the crisis, its likely effects, and what can be done to prevent another such debacle.

What is your analysis of this crisis of 2008, not so much as a banker and financier, but as a Christian? Would you say it is the consequence of unethical behavior in the financial sector?

I think it’s very hard to say that, in some sense, there’s a direct correlation between a lack of ethics or lack of morality and the crisis. But if you stand back, what does concern me, if you take a view based on the last 20, 30 or 40 years, is that we’ve seen the decline of religion as a source of values in Western Europe. It seems to me a more libertarian ethos has emerged and almost a more selfish lifestyle, which isn’t confined to the financial sector or, indeed, the economic sector.

In Britain, there’s the whole growth of the yob culture [the current phenomenon in the U.K. of young unruly, disrespectful people], the problem of discipline in schools — all of that is a reflection of a changed system of values. I think that the problems in the banking system are also a reflection of that change in a system of values, but there’s no direct connection, and I certainly don’t think you can say the crisis is a judgment of God or something like that.

Many people believe greed has a lot to do with it. Do you think it is a major cause?

The people in the financial sector whom I work with are made up of all sorts of people, and I’m sure that some of them have been quite greedy. But I also have a lot of colleagues who are highly responsible and who are not greedy. So I find it very odd to say that it is really symptomatic of greed, because if you feel greed is a characteristic of our society, then I think it’s been a characteristic of our society for some time. So why then would the crisis come now? That’s what I mean when I say you cannot directly correlate it with something like greed, but in terms of the underlying culture, the decline of religion as a source of values is not helpful.

Father Robert Sirico, president of the Acton Institute, and others have criticized the U.S. financial bailout as unjust, in that those who lent money irresponsibly are being rewarded, while those who didn’t are not and that this is distorting the market economy. Do you agree with this view?

No, I totally disagree with that. Back in October, after the Lehman Brothers collapse, there was a real panic in the banking system, and there was nearly meltdown in the global capital markets on two occasions. I think in that situation, the British and American governments did absolutely the right thing because there was no alternative. The alternative would have been horrendous — the world’s payment system would have completely dried up. Of course, this does not justify irresponsible lending, but irresponsible lending is not an argument against decisive action taken by governments to kill the panic.

Pope Benedict XVI and the Vatican have been concerned that this crisis will affect the poor the most. Do you think that will happen?

The commission which I chaired was particularly concerned about borrowing, lending, and debt among poorer families. I think as you tighten up the financial system, bank lending will be reduced and the poor are really at the bottom of the pile. They are really going to see the effects in a major way. The only alternative source of borrowing they have is loan sharks. So for the poor, what we have to see, certainly in Britain, is more action by the government to increase the number and scale of credit unions. Much like in the 19th century when we had the building societies, trustee savings banks, and so on, what we need to encourage at present among communities is the growth of not-for-profit banks, and there are various models for how this can be done. But I think the government really has a responsibility to low-income families as a result of the crisis, to take much more action than they’ve taken — even a Labour government — in the last five years.

Britain’s The Observer newspaper claimed Dec. 7 that the Holy Father was compiling a “policy paper” that would pin the blame for the international financial crisis largely on tax havens. The document is said to also attack short-term greed, which is also said to have caused the turmoil in the economy. Do you think these are correct accusations?

I think tax havens are separate issues from the global credit crunch. Tax havens are not all the same and have pros and cons. What is important is that banks should not use tax havens for tax evasion; however, I do not think tax havens are a major cause of the present international financial crisis. Frankly, they are virtually irrelevant. Short-term greed is an altogether different matter, and I would love to read more about Pope Benedict’s views on this.

How should banking practices be changed?

One reason why the banks are vulnerable — especially retail banks — is that their lending policies were much too aggressive. People were inundated with offers of credit cards and things like that. Sometimes the terms on which the money was being offered were in the small print, and so, not easy to access. That has to be totally changed. For myself, banking used to be a very personal business between a bank manager and an individual, much as medicine is between a doctor and an individual. We need to rediscover something of the personal element in banking, because it’s become very impersonal.

Edward Pentin is