After publicly condemning the practice the Church of England have been accused of using short selling to boost their assets.
In a week that saw two prolific members of the Church of England publicly condemn the ‘City’ for its role in the turmoil currently afflicting the global economy, financial practices used by the ecclesial institution have also come under fire.
The Church are said to have been involved in short-selling, a practice that has now been banned by the Financial Services Authority (regulator of the UK's financial services industry) after its part in the near-failure of HBOS last week .
Dr John Sentamu, Archbishop of York, went on record this week dubbing city traders and hedge fund managers "bank robbers and asset strippers". While Dr Rowan Williams, Archbishop of Canterbury and head of the Anglican Church denounced the global trade of debt responsible for the credit crunch.
However, religion and society think-tank Ekklesia have now come forward accusing the Church of employing the financially-dubious practices they attack.
They claim that the Church have in recent times used hedging to build on their £5.5billion portfolio of assets. And, in addition; have lent foreign stock for a fee, potentially facilitating the short-selling of shares.
The Church are known to have invested £13million in hedge funds with Man Group as well as a sizable amount with Auriel Capital, a hedge fund that centres on trading currency to make profit.
Jonathan Bartley, Director of the Ekklesia think tank commented: "The archbishops should be extremely careful when attacking City "bank robbers" for short-selling and speculation.
"By its own admission it has hedged against a fall in the value of sterling and set up a currency hedging programme in 2006, effectively short-selling sterling in the currency markets."
A spokesperson for the Church Commissioner refuted accusations of hypocrisy in an interview with the Financial Times, commenting: "The Commissioners do, through their custodians (JP Morgan), have a small stock lending programme.
"Stock lending is used for a variety of purposes, not simply to cover shorting by hedge funds. We can assure you that the Commissioners' stocks have not been used to facilitate the shorting of financially vulnerable institutions in the US and UK, including HBOS. Nor will this happen."
