CATHOLIC NEWS OF THE WEEK . Saturday, 20 October 2018

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New president of Vatican bank out to dispel a few myths

VATICAN CITY (CNS): Ernst von Freyberg was appointed president of the Institute for the Works of Religion, also known as the Vatican bank in February this year,

He met employees on May 13 and announced that, as part of ongoing efforts to promote transparency and chip away at the myths surrounding the bank, he will launch a website by the end of the year and publish its annual report. 

Greg Burke, the media adviser for the Vatican Secretariat of State, announced that the website will not offer online banking and the annual report will not list clients, but it will explain what the institute is and what it does. 

The Institute for the Works of Religion was formally established in 1942, but it has its roots in an administrative body that was started by Pope Leo XIII in 1887 to support the work of the Catholic Church. 

It was founded to safeguard and administer the financial resources of Church offices, religious, congregations, orders and institutes. 

In some ways it does work like a bank, as it has cheque and interest-bearing savings accounts, and even cash machines.

However, unlike a bank, it is not a lending institution and does not engage in commercial enterprise for generating capital.

The institute’s director, Paolo Cipriani, told reporters in June 2012 that it handles about d6 billion ($61.2 billion) in assets spread out among 33,000 accounts. More than three-quarters of all account holders are in Europe, presumably Italy, while just 7.3 per cent of accounts— the next highest percentage—are at the Vatican. 

Cipriani said the bank has no numbered or secret accounts and no relationship with offshore banks or countries and called such claims a myth he hoped to shoot down once and for all.

Pope Benedict XVI started implementing changes in 2010 to improve monitoring of the Vatican’s financial operations, particularly those of the Vatican bank, and ensure they conformed to the latest European Union regulations and other international norms against money-laundering and the financing of terrorism. 

In May 2012, the bank’s previous president, Ettore Gotti Tedeschi, was ousted following a vote of no confidence by the institute’s board of supervisors. This came in the midst of the VatiLeaks scandal, which included the leaking of documents hinting at financial mismanagement within the walls of the Vatican. 

For six weeks at the beginning of 2013, the Vatican was forced to stop accepting ATM and credit cards after Italy’s central bank denied Deutsche Bank Italia permission to continue offering the service.

The central bank claimed the Vatican’s banking and financial laws were not stringent enough to prevent money laundering. 

But Rene Brulhart, the Swiss finance lawyer hired to monitor the legality and transparency of Vatican financial activity, said the Italian central bank’s action was surprising, particularly because no other European country or agency shared Italy’s concerns. 

In fact, in 2012, the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval) said the Vatican met nine of its 16 key and core recommendations to prevent finance-related crimes. 

 

The Vatican has said it is continuing to bring its procedures in line with Moneyval recommendations; the next evaluation report is scheduled to be released in December. 

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