What is God saying to His church with regards to the recent global financial crisis

Beginning with the subprime crisis faced by Fannie Mae and Freddie Mac that had to be rescued by U.S. Government. As the price for houses kept on going up over the last 10 years banks in the U.S. such as Fannie Mae and Freddie Mac were willing to give loans to house buyers without much hesitation because homeowners could always refinance their housing loans. These types of home mortgages were called subprime because they were given to people without proper consideration as to whether they could afford to pay. However, their interest rates are higher and when they defaulted in payments that would be worse. Because of their higher rates investment banks could then package these subprime mortgages which were unregulated and exported these toxic debts to European banks besides those in U.S. However, when the price of their valued homes began to drop 20-30% and their interest rates climbed, their monthly payment to service the mortgages also went up. More than 2 million homeowners lost their homes in U.S. when they could not afford to pay up. Titans like Bear Sterns and Lehman Brothers and Merill Lynch went bankrupt while AIG and Citibank were rescued by the Government. Even Royal Bank of Scotland and Barclay were not spared and had to be rescued. Central Banks from Europe had to work with the Federal Reserve to pump hundreds of billions into banks and cut interest rates. If they didn't the International Monetary Fund warned that we would face a financial meltdown. Stock markets around the world began to plunge with trillions of market capitalization lost within two weeks. Unlike the 1930 Depression in the U.S. where the U.S. Government refused to intervene in the financial crisis, the 2008 crisis has forced the U.S. and European governments to get involved. If they don't banks would stop giving loans for houses, cars, and businesses resulting in a major global economic downturn. The Iceland Government was on the verge of bankrupcy but was bailed out by the International Monetary Fund.

There are 2 questions we might ask as it relates to the Church or God's People especially those who are actively engaged in banking and other financial instruments.

1. Do we have a Christian model for lending or financing?
2. Can God's people experience the transfer of wealth when such a crisis take place?

1. The Singapore Business Times, Tuesday August 19, 2008 carried an article entitled "Islamic finance gives comfort to investors looking for security". The AFP article written from Hong Kong states that "The global credit crisis presents the US$1 trillion Islamic finance industry with an opportunity to expand its appeal beyond devout Muslim investors as a haven from speculative excess." With the collapse of the US mortgage market banks were left holding hundreds of billions of dollars of nearly worthless credit instruments tied to home loans by a web of complex structures. Isn't it an irony that while conventional banks are nursing losses of more than US$400 billion from the credit crisis, Islamic banks are virtually unscathed. "Its very much a return to old fashioned conservative lending." said David Testa, chief executive of Gatehouse Bank which began operations in April as Britain fifth Islamic bank. David said that Islamic finance is based on the syariah or Islamic law. It requires that gains be derived from ethical and socially responsible investments and frowns on interest-based banking and sectors such as pork, gaming and pornography. It was reported that the Asian Development Bank estimates that Islamic assets globally aggregate around US$1 trillion with annual growth of 10 to 15% a year. Presently, Malaysia plays a leading role in promoting Islamic banking. Islamic bonds or sukuk is another financial instrument that replace coupons with payouts backed by tangible assets as Islamic law prohibits the payment of interest and requires transactions to be linked to assets, thus deterring the kind of complexity prevalent in conventional financing. Remember that the borrower is the servant of the lender and at the rate U.S. government and other institutions borrow from Islamic finance they may inevitably comply with and promote Islamic banking and shariah laws.

Paul Mills from Jubilee Centre, a Christian Think-Tank based in Cambridge wrote a paper on "Finance" in Chapter 11 of Jubilee Manifesto (published by IVP, 2005, edited by Michael Schluter and John Ashcroft). In examining the Theological foundations of the biblical financial model based on the Old Testament it follows that Christians (after the pattern of Israelites ) are forbidden to extract interest on loans between 'brother' but are permitted to have interest from 'foreigners'. According to Paul, it seems that the Old Testament financial system has four elements.

Firstly, borrowing was permitted and even encouraged as an integral part of the welfare system to help members of the community over times of temporary difficulty with its repayment taken very seriously to such an extent that collateral could be taken and enforced servitude might be required to discharge unpaid debts. Secondly, the absence of interest and the preset cancellation of debts (every 7 years - Jubilee year) meant that someone could not be indebted forever, nor could their children be enslaved permanently. Debt and compounding interest could not be used to oppress one's 'brother' and the jubilee legislation also meant that moneylenders could not use debt foreclosure on farmers to accumulate large tracts of land so preserving the initial tribal allocation of land. Thirdly, the absence of interest (and periodic debt cancellation) meant that lending was done either for charitable purposes or for mutual favours between family, neighbors or business partners. Therefore, there is not incentive to develop an anonymous debt market. Fourthly, investment finance would have been channeled into alternative, risk-sharing and rental contracts rather than commercial loans.

We must appreciate Paul Mills for identifying the Old Testament financial system but the question is "How can Christian banks apply such a system?" It seems that such a system will only work in the context of Christian community and the only kind of bank that can operate such a charitable system would be in a non profit foundation that offers micro credit without seeking interest. Yet, can we have a team of like-minded Christian bankers and financiers to look into the application and implementation of such theoretical framework? Looks like someone like Paul Mills is just talking about it without the corresponding applications in real banking operations whereas the Islamic financial system is already functioning successfully and growing globally with the backing of Islamic nation's Governments and central bankers. At the most Christian businessmen would attempt to buy over banks and called it Christian banks while adopting the present banking practices and products of the day. However, there is a great need to bring forth Kingdom and Biblical principles in banking and financial institutions. Will God's people in the Marketplace especially in the area of finance and banking come forth and take their rightful and needful place?

2. Since there was so much talk of 'transference of wealth' from sinners to the righteous (Prov.13:22) for the last few years "Who are the Christian people and businessmen who actually become recipients of such transference of wealth?" We learn from Haggai 2 that God was shaking the heavens and the earth including financial and economic shaking and when financial crises emerged were God's people ready to seize the opportunity? Were God's people able to take over banks when their values dropped so drastically? We know that Barclays was able to raise 20 billion US dollars from the Middle East but where were God's investors to partake in the transference of wealth?

When God causes transference of wealth to take place for his business people it is for two purposes: for the eradication of poverty and for nation transformation. When Bill Gates, the richest man in the world left Microsoft to head his global charity, he demonstrates a good example by putting in his own money worth 260 billion to help eradicate global diseases such as malaria, it signal the transference of wealth had started. Joan Kroc, the wife of the founder of McDonald died she left 1.5 billion to the salvation army, the biggest amount ever given to Christian organization for charity work. That is what transference of wealth is for. Perhaps many who have lost great wealth and money due to the plunging stock market and collapse of Lehman Brothers should take heed to the Word of God that says "when you have eaten and are full, and have build beautiful houses and dwell in them....... and when your herds and flocks multiply, and your silver and your gold are multiplied, and all that you have is multiplied; when your heart is lifted up, and you forget the Lord your God (by not using your wealth for His purposes including eradication of poverty and for nation transformation).... for it is He who gives you power to get wealth...." Deut. 8: 12-18, should check their heart and ask God for forgiveness and repent.

When the Lord said, "Once more (it is a little while) I will shake heaven and earth, the sea and dry land; and I will shake all nations, and they shall come to the Desire of All Nations, and I will fill this temple with glory," says the Lord of hosts. "The silver is Mine, and the gold is Mine," says the Lord of hosts. (Haggai 2:6-8)

Let God's business people hear His voice and seize their God given opportunities and experience their transference of wealth.