[texts for discussion] Pecunia non olet


Pax-Bank, now “Pax-Bank eG, Bank of the Church and Caritas”, was founded in Cologne in 1917 as a bank cooperative of priests for the ecclesiastical community itself, under the principles of “self-help, own responsibility and self-management”. Referring to historical events, both the October 1917 revolution in Russia and the growing social tensions in Germany itself, which ended in the fall of Kaiser Wilhelm II’s monarchy and then transformed into the revolution of November 1918, it is not surprising that in those times, when the Catholic Church felt directly threatened by the “red tide” of the revolutionary uprisings, the church decides to protect its capital, in this case not only “spiritual” but rather economic, with the founding of said bank. In addition, in 1920, by virtue of the Treaty of Versailles, Germany lost all its colonies, where its “civilizing work” was evidently accompanied by “ardent missionary work”.
In the following years, Pax-Bank, unlike many other financial institutions, survived both the inflation following the end of the First World War and the first major financial crisis (unleashed by the crash of the New York Stock Exchange in 1929). Although many German banks were affected by the economic crisis, in 1932 Pax-Bank stated simply “our profitability has not suffered any damage”.
Of course, the Pax-Bank is absolutely silent regarding its relations with the new political power that came to rule its homeland between 1933 and 1945, that is to say the Nazi party NSDAP, who, thanks to the unconditional support of German capital, was able to unleash its expansionist war machine, occupying up to half of the continent and perpetrating the Holocaust and the extermination of peoples considered inferior. Although it is true that the Catholic Church in Germany, bound by its bonds of faith with the Vatican rather than with Berlin, did not collaborate with Nazi crimes to such an extent as the biggest church in the country, the Protestant, its attitude, in general, was very passive. In 1941 its headquarters in Cologne was, luckily for the image of the bank, destroyed during Allied bombings, along with all its documents, protocols and minutes of previous years. However, the Pax-Bank does not shy away from boasting that it continued to reap significant profits even during the “turbulent war years”, as they themselves laconically describe those years.
In the period after the end of World War II and with the introduction of the Deutsche Mark as a new currency in 1948, Pax-Bank continued to grow and expand. In 1950 it began to train its future employees, while in 1952 it extended its services from churches and priests to monasteries, hospitals and orphanages.

Then, in 1958, a couple of new subsidiaries were opened, including the one in Aachen. From then until the end of the 20th century, this entity continued to grow and the introduction of the Euro as a European currency in 1999 did not affect the bank economically.
In the 21st century, specifically in 2001, the Pax-Bank opened its first headquarters abroad. The obvious choice was Rome, the offices were located near Vatican City and in this way, in the bank’s own words, it penetrates “the heart of Catholicism”. At this point in history the Vatican’s bank had already lost much of its credibility after some scandals in the 1980s and 1990s, and for that reason Pax-Bank, with its “transparent and ethical” banking image, tried to offer itself as an alternative in the world of Catholic capital.
In 2009 Pax-Bank opens an office in a monastery of German Catholic nuns in Jerusalem to “assist its clients in the Holy Land and strengthen the economic situation of Catholic institutions in that country”.


In spite of the ethical and moral Catholic foundations it tries to present to its faithful public, the Pax-Bank was not being exempt of its own scandals. In 2009, its investments in the US pharmacological company Wyeth, the producer of birth control pills, came to light. In the same year, investments in the British arms company BAE Systems, a producer of nuclear submarines and fighter jets, and British-American Tobacco Imperial, a potentate of the tobacco industry, were discovered. The Pax-Bank was quick to apologize to its clients and, as good Christians, its clients accepted the confession and knew how to forgive.
However, the Pax-Bank, that “mediator between God and Money”, as described by the German financial press, with its 8 subsidiaries, 200 employees and its capital of only about 2.3 billion euros, turns out to be an insignificant dwarf, compared to any of the financial colossi of the Spanish state. And if here (in “Spain”) no bank today is explicitly presented as a Catholic, it is because in fact they all are, in one way or another, linked to that huge “anonymous society” called the Church.
The history of savings banks in the Spanish state goes back to different predecessors, among them the Montes de Piedad, that is to say charities where the poor could obtain sums of money by pawning their belongings and thus being able to satisfy their most primary needs. Originally created in fifteenth-century Italy by the Franciscans, they began to spread to Spain in later centuries, the first of which was created in Dueñas in 1550. As socio-economic circumstances changed, savings banks were created within the Montes de Piedad to “foment savings among the lower classes”. The concept of a savings bank as we know it today has its origins in England, where Protestantism, opposed to the Catholic approaches of piety, considered that the improvement of the conditions of the working class could be reached through remuneration of savings. The first savings bank in the Spanish state was the one in Jerez in 1834, and the following year, a royal order established that savings banks were “to receive deposits that would accrue short-term interests in order to spread the spirit of economy and work”. In conclusion, the Spanish savings banks are born with some delay compared to other countries, and almost always linked to the former Montes de Piedad or created at the same time. Their main objectives were to “lead people’s savings towards investment and carry out social work in their respective territorial areas”, that is to say “if you work and pray, we will take care of your money and your soul”.
The close relations between the Church, banks and politics, although perhaps less evident today, especially thanks to countless mergers and name changes (in Spain banks never die, they simply merge…) and given the recent economic crisis, never ceased to exist. From the days of the Caixa Manlleu, which was founded in 1896 by local industrialists and … a bishop, until the beginning of the twenty-first century nothing changed much, at least at the level of economic power. Until the end of June 2016, the position of the president of La Caixa, the entity formed in 1990 by a merger of Caja de Pensiones para la Vejez y de Ahorros de Catalunya y Baleares and Caja de Ahorros y Monte de Piedad de Barcelona, was occupied by the great Catalan businessman Isidre Fainé i Casas, known for his strong religious convictions and ties to Opus Dei. Born in a humble neighbourhood in Manresa, he obtained a doctorate in economics from the University of Barcelona, business administration at Harvard and diplomacy at the University of Navarra, belonging to Opus Dei, and later became one of the most important bankers and entrepreneurs in the country. It is interesting how the Christians, at least those who were not eaten by the lions, inherited from their ancient Roman persecutors not only Latin, but also some of their slogans. Fainé i Casas, proud father of 8 children, resident of Sant Cugat del Vallès and since September 2016 the president of the multinational energy company Gas Natural, successfully adopts that old maxim: “pecunia non olet” (money doesn’t stink).

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