Last week, the Russian Chamber of Commerce and Industry threw its support behind a so-called Orthodox Financial System developed under the aegis of the Moscow Patriarchate and strongly resembling the better known Islamic financial system.
“The Chamber of Commerce and Industry supports the creation of the Orthodox Financial System … and is ready to provide its platform for detailed and professional discussion of these questions together with the relevant committees of the chamber,” the chamber’s press service reported last Friday after a meeting between its chairman Sergei Katyrin and Vsevolod Chaplin, a senior Orthodox cleric overseeing the project.
“Now, during a time of crisis when access to financial resources is limited because of sanctions, we are finally being heard. And society has reacted positively to our proposal,” said Dmitry Surmilo, the coordinator of the working group creating the Orthodox Financial System at the Moscow Patriarchate’s department of external church relations.
Based on Russian law, Orthodox morals and Russian business traditions, the Orthodox Financial System is designed to be resilient to world crises and help reduce Russia’s reliance on the Western banking system, the project’s authors said.
The Russian economy is expected to contract by about 4 percent in 2015 due to dropping oil prices and restricted access to Western finance as part of the sanctions package imposed last year against Russia over its role in the Ukraine conflict.
The idea of developing its own financial alternative to the existing banking system was floated by the Russian Orthodox Church around 20 years ago but only recently garnered attention from banking officials and the public.
The Orthodox Financial System was publicly unveiled by Chaplin in December last year.
At that time, Chaplin — known as one of the most conservative and outspoken Orthodox clerics — prophesied the end of the current “money makes money” economy. Therefore, a financial system based not on usury — charging interest for lending money — but on traditional social values should be introduced, he said.
The new system is not designed to replace traditional banking but to complement it, according to its authors.
The new financial system aims to incorporate respect for the law, charity, moderate consumption and quality goods and services that are safe for consumers’ health, soul and the environment.
Other religions are welcome to participate within the Orthodox Financial System, on the condition that they follow these regulations.
Just like Islamic banking, the Orthodox Financial System does not allow service charges on loans. Participants of the system share risks, profits and losses. Speculative behavior is prohibited, as well as investments in gambling, drugs and other businesses that do not meet Orthodox Christian values.
Orthodox banking is made up of a low-risk credit organization that controls all transactions, and investment funds or companies that source investors and mediate project financing.
The authors claim that a low-risk credit organization will prove invulnerable given its avoidance of operations with active financial risks.
Priority is placed on ensuring financing of the real sector of the economy, according to Surmilo.
However, with inflation in Russia expected to reach 10.8 percent by the end of the year according to the Central Bank, it was not immediately clear how such a system of personal loans would work.
“The system can only function if the loans we are planning to offer at least correspond to the level of inflation in order to preserve the value of given funds over time,” Surmilo said.
Comment: Islam can make converts from Christendom in part because Islam is wise enough to decry usury.
If Christians don’t want their children to convert to Islam, it makes sense for Christians to purge Christian societies of complicity with usury.