Prophets' Words on Greed Speak to All of Us

Article excerpt

DAVID HARRIS

BANK PROFITS are up again. The collective resentment of the country finds expression in our secularized society's prophets: self-appointed citizens groups and politicians on the left. Profits have always been of interest to prophets: the latter invariably railing against the former.

But if this collective moral indignation is to have any weight, it needs to be solidly grounded. It's easy to say banks are greedy when the profits are huge. But who is really being greedy?

Banks, particularly, have a unique place in Canada. Go to the downtown of any major city and at its heart is an intersection marked by banks. Huge towers usually. In the centre of the country's financial district in downtown Toronto they call it MINT corner (Montreal, Imperial, Nova Scotia, Toronto-Dominion).

Canadian banks were able to make their money by being permitted branches across the country. They have had plenty of influence in Ottawa too, filling party coffers for election campaigns and grading successive finance ministers' budgets.

And, recently, they have made good profits. The irony about our relationship with banks is that although we have given them a fairly free hand and favourable legislation to make those profits, the tradeoff is that we are proportionately skeptical when they begin to make any amount of money and outraged when they start raking it in.

Greed becomes the word.

The banks' defence is that they have to make money for shareholders. When our prophets criticize this, it's as if those shareholders, often mutual and pension fund managers, were someone else, not us.

But is it so? Canadians have long had an aversion to the stock market. But lately, mutual funds have been popular, perhaps because they are perceived as intermediaries; a way to participate in profits without sullying our hands in the filthy lucre. And those profits are boosting our RRSPs, letting us think of retiring earlier and richer. Mutual fund managers are making money all right ... for us.

Pension fund managers are making money too ... for us. The single biggest sector in stocks held by the Anglican Church's pension fund, for instance, is in financial services: i.e. …