The numerous financial scandals of recent years has seen a backlash from law-makers seeking to increase the amount of regulation faced by financial groups. Now many of those banks are revisiting what they do and why they do it. Though broker dealers in 2008 switched to become bank holding companies, some are now considering another change of status to become religions instead.
Many remember how the CEO of Golden Muppet Securities commented that he ”was doing God’s work”. Few realised that this could be the start point of him converting the company into a religion. But sources close to Wall Street suggest that rather than convert to religious status, the firm might instead seek to maximise its brand loyalty and goodwill by instead launching a hostile bid for a religion.
As there is no regulatory oversight of religions, so the deal is likely to go through without any objection from the NY regulator or EU competition authorities in Brussels. Conflicts of interest between the finance services and the world’s leading religions are rare, although Golden Muppet is rumoured to currently advise many of the world’s leading religions on ethics and M&A.
Traders on the street pointed to the flurry of activity in March 2013 Judaism Put Options, and speculated that perhaps Golden Muppet Securities was planning an assault on the big one.
“This would be a mega deal” said Bart Smith, a corporate financier at Zen Buddhist Advisors . ”Judaism is not only a popular religion, but it’s also an extremely wealthy one. The defence fees on this deal could be enormous. And the ethical synergies for Golden Muppet Securities could be enormous as well, especially if it could re-write the rule book. It really could end up doing God’s work, or at least a revised version thereof”
Analysts think there is a good chance Judaism could reject the deal and try to mount a defence. David West, a banks analyst at Yoga Philosophy LLP said “I think they really want the whole Judaism thing. The Rabbi’s will need nerves of steel if they want to hold out for a higher offer, there’s not exactly a white knight, or in this case a white angel waiting in the wings. There is also the chance they could walk away and bid for someone else, especially as the Catholic church looks weak after its Italian Bond portfolio fell in value. Failing that, the Greek Orthodox Church looks like a sitting duck.”
However, others have pointed to a less ambitious “distressed asset deal”, with an un-named European bank bidding for the Vatican Bank. According to The Economist, the bank is modest in size: as of last November it had just Eu6.3bn ($8.3bn) in assets, 33,4000 accounts and 13 ATMs. Though small in size the bank has other features that make it alluring. “We see this as a way of hedging ourselves against the break up of the Euro, with the ability to sell papal indulgences to Northern Europeans in order to fund the extravagant Mediterranean life style.” said an unnamed source that is looking at the deal.
Commentators see that there could be other benefits to this deal. If Golden Muppet Securities does gain a religious status it will stop being regulated by the SEC and the FED. In fact there is every possibility it could claim it has a higher status and instead seek to become the regulator of the SEC and FED. Opinion here is mixed. One compliance officer commented “As most of the FED and SEC used to work there, we don’t feel regulatory framework could be much more favourable. There would be no real benefit to this.“
Keen minded financiers are already assessing the financial benefits of the deal. “This is virgin territory. The Judaism business model is thousands of years out of date and in desperate need of updating, meaning there would be huge potential, with little competition for fees. For example there could be plans to restructure worshiper cashflows into off-balance sheet vehicles. Then there is a property aspect with plans for Synagogue Backed Securities and trading potential through CDOs on scrolls.” said Winston James from the Rastafarian Bank of New York. “And this one really would be too big to fail” he added.
Banks are concerned that there may be a poor public image associated with plans to package up and sell a religion. But Fred Finkenstein, a consumer goods analyst at Seventh Day Adventist Securities points out: “Really though the whole religion thing can be broken down into its constituent parts. The business dynamics are much like any other consumer or leisure business. There is an element of of brand identity and loyalty, weekly events at themed venues, family membership and lifestyle packages. Payment is either through subscription or pay as you go. It’s just business. It’s not exactly sacred.”
Off the shelf conversion
With demand from other banks seeking to convert, some existing religions are offering an “off the shelf” conversion package. For example, The Church of Scientology are offering a white label religion. Purchasing banks simply replace references to Operating Thetan with some other phrase such as “Securitisationism” or “Conduitism”, revisit the fee structure for their target market to attain something other than “OT VIII” and pass the resultant document through their legal team.
From employee to devotee
But it is not all plain sailing and many employees struggle to cope with the change of status from employee of a bank to devotee or follower of a religion. One devotee who did not wish to be named said that “After my employer had become a religion, it adopted a new set of principles including: client focus, respect for the individual, teamwork, responsible citizenship and integrity”. “It has been quite a change as now we try stick to these, meaning it is completely different to when we were workers at the bank” he said. “And of course not being an employee, means we don’t get paid anymore, which has posed other challenges”
There are also worries about similarities with the way dangerous cults operate. Cults are pseudo religious organisations run by fanatical and highly charismatic leaders, often seeking to become rich. This may be achieved by brainwashing their followers to work hard for long hours, while giving everything to the cause with unquestioning loyalty and devotion. Contact with those outside the cult is discouraged, and followers often lose touch with their friends and family, instead relying on other cult members for their “support network.” Followers find remaining within the fold is of the utmost importance to them and they fear the consequences of being ejected and having to face the world without a belief system or the support of others. Experience to date though shows that many of these worries have been alleviated when the banks concerned convert and become religions.
Living on Charity
Converted banks may find that as a religion they are able to gain charitable status. Many would be able to help their devotees to enjoy some of the benefits that were humbly given up for a life of religious servitude. “Such gifts could include West End mansions, school fees, weekends in Verbier and private jets” said Herman Miller of Amish Brothers Employee Benefit Consultants. “But this is small beer compared to the greatest benefits of doing god’s work, namely social acceptance. For example, at dinner parties rather than trying to hide one’s status as an investment banker, one could proudly claim to be a Minister preaching the word of the Lord and being supported only by the charity of one’s congregation.”