Meeting report
“Sustainable Mercy in Finance” at LUMSA

Sustainable Mercy in Finance at LUMSA

Time: 18 April 2016 – 9h00 to 12h30
Place: Aula Giubileo, LUMSA, Rome

Libera Università Maria Ss. Assunta (LUMSA) co-organised an international event about “Sustainable Mercy in Finance”, with the International Research Centre on Cooperative Finance (IRCCF), Assopopolari, CERBE and Misericordes Sicut Pater.


The Extraordinary Jubilee of Mercy, declared by Pope Francis to emphasize and celebrate God’s forgiveness and mercy throughout the Catholic World and the 140th anniversary of the foundation of the cooperative movement in Italy, threatened by new regulations of the banking industry in the country.

Opening Remarks

Francesco Bonini,
Rector of LUMSA University

Prof. Bonini opened the conference by first highlighting the perceptual contradiction between finance and mercy. He then pointed out the role that cooperatives could play, not only in streamlining mercy into finance, but more broadly contributing to the shift from a dehumanizing to a human-centered economy. This would be one where the interactions between humans are put at the center of a sustainable development model. He concluded by addressing the participants about how to make finance sustainable – and not just profitable – which consequently broadened the scope of the discussion.

Giuseppe de Lucia Lumeno,
Secretary General of Assopopolari

Mr. de Lucia Lumeno, representing the Italian National Association of Cooperative Banks, focused the discussion upon the ongoing change of status quo brought about by the financial and economic crises, which highlighted the flaws in the market freedom ideology that had dominated the global landscape during the last two decades. He further stressed the need to shift from a human-depleting to a human-centered economy, where social and cultural development is actively pursued alongside economic development. This change in approach built on Pope Francis’s call for a sustainable society, conducive to sustainable development. He concluded by stressing the role of cooperatives in contributing to this shift by streamlining values of subsidiarity, solidarity and humanity alongside profitability.


Msg. Lorenzo Leuzzi,
Coordinating Committee of the Jubilee of Universities

Msg. Leuzzi started by introducing the Jubilee of Universities and reminded the participants of the words of Pope Francis, who highlighted the importance of knowledge and of the fundamental human value of mercy which should be applied to everything, including finance. He supported the arguments of previous speakers concerning the shift towards a human-centered economy by quoting Pope Benedict XVI and the desire for humans to be more. He continued by arguing that “we are in a shift of epoch and not an epoch of shifts” with all the challenges this entailed and that it was important to keep in mind that “the economy is the body and not the soul of society”. He concluded by stating that the economy should enable humans to be more without losing themselves, their identity, their stability and their eternity.

Invited Speech

Sustainable Mercy in Finance at LUMSA

Monique Leroux,
President of International Cooperative Alliance

Mrs. Leroux started by recalling the crucial role the correspondence between Luigi Luzzatti and Alphonse Desjardins played in the history of Italian and Canadian cooperatives and what it meant for her to attend the commemoration of Luigi Luzzatti as former president of the Movement Desjardins. She then elaborated on the concepts of long-term prosperity and sustainable capitalism which, in her experience of being a businesswoman active in the domain of cooperatives, defined the business model of the latter. This was based on a multi-stakeholder approach contrasting with an unsustainable shareholder approach over time. She highlighted the intrinsic role of cooperatives in supporting society beyond mere business profitability and detailed the initiatives she took when guiding the Mouvement Desjardins to “be there beyond quarterly results”. These initiatives included, among others, pooling young leaders together to define key issues, for what she defined as smart prosperity; that is, innovative, sustainable and inclusive. She then discussed in more detail these three dimensions, arguing that cooperatives were born out of innovation and a desire to build a better world, that sustainability could be achieved only if profitability over time is accompanied by robustness in times of crises, and that democracy within the business was a challenge but also the essence of that better world cooperatives pursued.

“Co-operative businesses are fully engaged in long-term capitalism and contribute to sustainable prosperity for people and communities.”
– Monique Leroux

Mrs. Leroux concluded by answering a series of questions posed by Prof. Ferri about the challenges of dealing with democracy in large companies, the opportunities brought by new technologies in doing so and, more broadly, the future of the cooperative movement in the world. She argued that democracy necessitated spending time with people but that it was always beneficial to do, so because it enabled business intelligence to be created and, ultimately, robustness of the business to be improved in times of crises. She continued by highlighting the possibility of bringing more people in, to make business even more inclusive, brought about by new technologies and that, as a result, cooperatives had a key role to play in some advances, such as the sharing economy. She concluded by giving some numbers to the participants about the actual size of the cooperative movement, attesting to its relevance in the global society and economy, notwithstanding that current ideology didn’t support the cooperative model, despite its great potential for sustainable development.

Round Table

Prof. Ferri opened the roundtable presenting the participants and refocusing the discussion to a more technical level on how regulation can hamper or enable banks, in particular, cooperative banks, in bringing about sustainable mercy.

Sustainable Mercy in Finance at LUMSA

Rym Ayadi,
Director of IRCCF

Prof. Ayadi started by underlining the challenges of translating mercy into numbers but argued that this concept was relevant to the extent, that it allowed for a discussion on the underlying problem of excessive greed in the financial sector. She pointed out that excessive greed was fuelled by the now dominant shareholder value model. In line with this assumption, she stressed the importance of analyzing business models to have a clearer view on the different behavior that banks were likely to have concerning issues such as sustainable mercy. She then presented the results of the BBMM in an attempt to shed light on which business models had more room for maneuver in giving a second chance to borrowers with a negative credit history. She also highlighted the importance of resilience, since more resilient banks were likely to take more risks in lending money. She concluded by highlighting the importance of adapting regulation to the diversity of business models and built on this by proposing a series of questions about sustainable mercy to the other participants of the round table.

Eric Meyer,
Director of Institute of Cooperative Research at University of Munster

Dr. Meyer started by framing his contribution to the regulatory context of the European banking sector and, more particularly, the pressure suffered by European banks facing a decrease in interest rates and an increase in the cost of regulation, as a result of ECB policies. He then highlighted the importance of constructive failures in the process of creative destruction which were central to capitalistic development and discussed under which conditions sustainable mercy could be a useful tool to ensure that participants could learn from their failures. He continued by arguing that mercy could be an element of resilience and stability in the system but that this would require everyone assuming responsibility, which could be problematic in a situation where systemic risks somewhat transcended the risk management of individual banks.

Giulio Sapelli,
Professor at University of Milan

Prof. Sapelli started by discussing the main determinants of the financial and economic crises and criticized the rhetoric developed since the onset of both of these, arguing that as long as the shareholder value model was dominant in finance it is an ideological mystification to speak of mercy. He returned the discussion to the fundamental question of the shift needed from a paradigm exclusively focused on profitability, to a more sustainable model, in which the human was put at the very center of socio-economic development, claiming that otherwise there was no place for concepts and instruments such as sustainable mercy.

Prof. Ferri closed the roundtable by reflecting on the role of rationality, the now predominant concept in the way individuals were thought of in the profit-oriented economy, as opposed to a human-centred society outlined in the discussion of the participants. He then launched a discussion among participants and attendants, which included Mrs. Leroux who stayed in the audience after her speech, about the role of cooperatives in a more sustainable society and the economy of the future.

Concluding Remarks

Prof. Ferri concluded the conference by thanking the participants for their contribution and the public for their attendance, acknowledging that the discussion had shifted from a focus on mercy in finance to a broader reflection on the preconditions for such focus to be relevant, namely the construction of a more human-centred society and economy in which social, cultural and ethical values were streamlined alongside profit.