This article is more than 12 years old

This article is more than 12 years old

The Church of England, which this week condemned the practices of some City traders, has been using aggressive tactics to maximise profits on its £5b investment portfolio, according to a thinktank.

The Archbishop of York, John Sentamu, branded financiers who cashed in on falling share prices as "bank robbers" and "asset strippers", and the Archbishop of Canterbury, Rowan Williams, called for fresh scrutiny and regulation of the financial markets.

But yesterday the religion and society thinktank Ekklesia claimed that in 2006 the Church Commissioners, who manage the Church of England's investments, set up a currency hedging programme, in effect short-selling sterling to guard against rises in other currencies. Ekklesia also criticised the church for its shareholdings in oil and mining companies.

Jonathan Bartley, co-director of Ekklesia, said: "The archbishops should be extremely careful when attacking City bank robbers for short-selling and speculation. Amongst the billions of pounds that the church currently invests in property and shares are hundreds of millions invested in oil and mining companies."

He said the church has substantial share holdings in banks and a stated aim of making a profit on its investments of 5% a year above the rate of inflation.

Last night the church denied it was involved in short-selling, saying the think-tank's comments were "misleading".

"The currency hedging programme, set up in 2007, is designed to protect the sterling value of the commissioners' foreign currency-denominated assets," a spokesman said. "It is designed for protective, not speculative purposes and was put into place because the commissioners' foreign currency positions have been growing in significance as part of a wider move to improve the diversification of their asset base."

Bartley said the Church should invest more in institutions such as cooperatives, friendly societies and housing associations in return for a slightly lower profit.