Vatican restructures scandal-hit bank, vows transparency

Wed Jul 9, 2014 4:42pm EDT
 
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By Philip Pullella

VATICAN CITY (Reuters) - The Vatican on Wednesday said it would separate its bank's investment business from its Church payments work to try to clean up after years of scandal, and vowed to become a "model of financial transparency".

French businessman Jean-Baptiste de Franssu was named as the new head of the bank, officially known as the Institute for Works of Religion (IOR), succeeding German lawyer Ernst Von Freyberg, who has run the bank since February 2013.

Freyberg, who has said he is leaving for personal reasons, has introduced reforms to make the IOR more transparent and compliant with international norms against money laundering, and has closed many suspicious accounts.

The Vatican also plans to increase scrutiny on one of the two sections of the Administration of the Patrimony of the Holy See, or APSA - also hit by recent scandals - that runs Vatican properties, handles income and spending, prepares budgets and acts as a central accounting department and purchasing office.

Australian Cardinal George Pell, head of the Vatican's recently formed Secretariat for the Economy, told a news conference that the move was necessary in order for his department to "exercise its responsibilities of economic control and vigilance" over all Vatican departments.

To underscore the importance the pope attaches to cleaning up the Vatican, he issued an official Latin decree called a "Motu Proprio" modifying a Vatican constitution to shift the responsibility for the APSA department to the Secretariat.

The decree said all had to obey his order "regardless of anything to the contrary".

A new central Vatican Asset Management department will handle investments, leaving the bank to concentrate on its original aim and focus on payment services for religious orders, Vatican employees and charities, he said, changes that will be phased in over three years.   Continued...

 
Jean-Baptise de Franssu, new president of Vatican Bank IOR, gestures as he speaks at a news conference at the Vatican July 9, 2014. REUTERS/Tony Gentile