The Sunday Times (registration required or try the Oz version) is reporting that
The Church of England is faced with having to cut clergy and sell some of its most valuable treasures after losing almost £1 billion on disastrous stock market investments.I suspect I am hopelessly out of date, but since when have endowments been invested for capital gains instead of income?
Rowan Williams, the incoming Archbishop of Canterbury, may have to institute a radical restructuring of the church after he takes office next year.
Almost a quarter of the church's £4.4 billion estate is understood to have been wiped out by the recent stock market crash, with £500m lost in the past six months.
The church has relied extensively on profits from stock market transactions to fund its activities and this income has collapsed. The church also invested heavily in telecoms, technology and pharmaceutical companies that do not tend to pay generous dividends. During 2001, income earned from shares dropped by £7m and sharper falls are expected this year alongside the deep fall in capital values.
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The losses are particularly embarrassing for the Church Commissioners, who manage the church's assets, as they decided to move most of its investments into the stock market after losing £800m in the property crash of the late 1980s and early 1990s.
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The church is now expected to press ahead with the controversial sale of a £20m collection of paintings by the 17th-century Spanish master Francisco de Zurbaran hanging in Auckland Castle, home of Michael Turnbull, the Bishop of Durham.
