Archbishop of York writes in The Times

It began with a squeeze, then the squeeze became a crunch and the crunch became a downturn and the downturn became a crisis. A crisis of faith as the temple of Mammon on which we have all sought to build our economic prosperity was tried in the fire of truth, honesty and reality, and was revealed to have shaky foundations.

It began with too much debt. Bad debt in the form of junk mortgages sold to people without a hope of paying them back and then pooled together and traded as collateralised debt obligations - against which further loans were made. When the day of reckoning came - and there is always a day of reckoning - the winds of truth blew away the countless houses of cards.

Greed, risk-taking, the trading of false rumours and the speculation of the money markets has pulled down banks and businesses overnight. The removal of morals from markets has led us to this present position.

Any putative regulation must not simply seek to limit the reoccurrence of recent events; regulation should also take into account a more basic understanding of the moral implications of our actions. A moral framework for free enterprise must be created in which God is not an add-on but its foundation. This framework would help us to see that the economy is our servant and not the master. Therefore, the purpose of our wealth and its creation must be used in the service of a greater vision. Our economic ship is leaking dangerously. We have to find a way of getting it into port. But when we get there it must not be business as usual.

Delivering the Social Service lecture in 1943, Archbishop William Temple outlined the basis upon which our economy must function: "Maximum output is not a true end of human enterprise; the end is fullness of personality in community; nothing economic is a true end. Consequently all economic methods and structures must be subject to criticism on non-economic as well as economic grounds. On economic grounds they must be tested by the question of whether they are fully efficient, or, in common speech, do they work? And this question must be asked of any improvement of them proposed on humanitarian grounds. But the non-economic question must be kept in view: does this economic method or structure help or hinder the development of people in community?"

In this time of crisis, we have a great opportunity to create a renewed shared vision of community based on service, rather than caring for No1 on covenant not contract; on duty not entitlement.

The story is told of the zookeeper who one day was passing the monkey house. He looked in and saw a monkey sitting on the branch of a tree with the Bible in one hand and Darwin's On the Origin of Species in the other. "What are you doing?" asked the zookeeper?

The monkey replied, "I'm trying to discover whether I'm my brother's keeper or my keeper's brother!"

One of the lessons of the present turmoil is the recognition of our interdependence upon each other. It is a lesson that is at odds with the mindset of speculative profiteering, but it is a lesson that bears repeating in times of crisis.

Am I my brother's keeper? Yes I am. The impact of what happens with a sub-prime mortgage in America has an impact upon my brother employed in Newcastle working for Northern Rock.

Am I my brother's keeper? Yes I am when speculation leads to mergers, with redundancies for thousands of my brothers and sisters.

Am I my brother's keeper? Yes I am, because the systemic risk of allowing a bank to fail makes sense only when it is translated into the thousands of individual stories of hardship that flow from its collapse.

A year before his lecture, Temple argued in a debate in the Royal Albert Hall that justice was more important than comfort, and the "profit motive" should never be allowed to predominate. "There is no harm," he admitted, "in the profit motive as such"; it was to be condemned only when it comes first in economic activity, when it was the priority. Profit should have a purpose beyond itself. There was a section of his speech that attracted wide notice at the time: "In my judgment at least it should now be regarded as improper for any private person or corporation to issue new credit; as it was is the Middle Ages for any private person or corporation to mint actual money, for the two are equivalent. And so I should like, I confess, to see the banks limited in their lending power to sums equivalent to that which depositors have entrusted to them, and all new credit to be issued by some public authority."

One banker commented to Temple that: "The joke about financial questions is that nobody knows the technical answers to them. If somebody will start giving the moral answers, we may get somewhere."

We cannot know what the situation would be if Temple's advice had been heeded. Certainly if a public authority, such as the Bank of England, had been more active in controlling the supply of money and credit there would have been an impact (doubtless some would argue deleterious) upon the growth of our economy. But such a measure might have kept in constant mind Temple's questions about the purpose of growth.

We have all worshipped at the temple of money and we have all placed beams in our own eyes. In a headlong rush for growth we have lost sight of the moral purpose of money. We have entangled ourselves in the chains of debt, longer than those of Scrooge, or his partner, Marley, with little to show for our enslavement. As Rabbi Abraham Heschel said: "We must remember that in a free society all are involved in what some are doing. Some are guilty, all are responsible."

In her latest book, Payback, Margaret Atwood, writes: "In Heaven, there are no debts - all have been paid, one way or another - but in Hell there's nothing but debts, and a great deal of payment is exacted, though you can't ever get all paid up. You have to pay, and pay, and keep on paying. So Hell is like an infernal maxed-out credit card that multiplies the charges endlessly."

At Christmas we are reminded that God invested himself in the most unpromising way - in humanity at its weakest and most vulnerable. We are reminded too that the coming of God offers us the opportunity to begin anew, for our debts to be forgiven and for those beams to be removed from our eyes by God.

This grace is freely given and joyfully unregulated. It calls us to active compassion and thereby overcoming the danger of disengagement or the abandonment to the common good. The endless supply of God's grace in a constantly demanding world offers us all a route to a more hopeful future.

The article is available to read at The Times