New Pope 2013: Pope Francis Sits on Vatican Bank with $8B Assets Shrouded in Secrecy
By Christine Gaylican | March 14, 2013 5:13 PM EST
The new leader of the Catholic Church, Argentine Cardinal Jorge Mario Bergoglio or Pope Francis, who shares to have lived a simple life, will be overwhelmed at how much money the Vatican Bank holds at this time.
Because disclosure is not practiced, records as to how much in assets the bank holds was only as of 2011, estimated at $8.2 billion.
Vatican's tall order of secrecy and bureaucracy is now running in conflict with international banking laws that seek to gather enough information to battle money laundering globally.
This is one of the thorny issues that his predecessor Pope Benedict IV tried to address months before he stepped down by appointing a German aristocrat and industrialist Ernst von Freyberg as head of the Vatican Bank.
Reports from the New York Times and Huffington Post indicated the power struggle stems from the tightly closed institution bound with secrecy all these years.
Built in 1942, the Vatican Bank has been tasked to hold in its vaults the accounts of a select clientele comprised mainly of clerics, religious institutions, and diplomats accredited by the Vatican. The Bank does not issue loans but keeps deposits and patrimony.
According to records as of 2011, the Vatican Bank has 33,000 accounts and some 20,772 clients, a majority or roughly about 68 per cent of them are members of the clergy, according to the New York Times. Assets under management has been placed ay $8.2 billion during that time.
Vatican Bank Management
Some $30 million was almost lost in May 2010, as the bank's president Ettore Gotti Tedeschi and an associate, bank director general, Paolo Cipriani, were held up by Rome's magistrates seeing some discrepancies in Vatican's external accounts and were later charged with money laundering.
The $30 million in funds were returned to the vaults of the Vatican bank. By December 2010, Benedict issued a papal edict creating a Financial Intelligence Authority to meet European anti-money-laundering directives.
In spite the questionable financial transaction made by Mr. Gotti Tedeschi, it was only in 2012 that he was fired by the bank's board publicly declared incompetent.
Before his tenure as pope was over, Benedict vowed that the Vatican bank will join the so-called white list of countries that meet international banking standards.
He even appointed a Swiss lawyer René Bruelhart as head of the Financial Intelligence Authority. Mr. Bruelhart helped Liechtenstein got out of the blacklist of countries that do not adhere to banking standards.
Bank Reforms Sought
Pope Francis will now be closely watched if he will pursue the bank reforms started by Pope Benedict IV.
On Jan. 1, Deutsche Bank Italy was not permitted to conduct business and pursue other financial transactions inside the Vatican after the Church failed to submit documents on December 31, 2012.
Instead of compliance, the Vatican chose a Switzerland consortium, a non-member of the EU, to replace Deutsche Bank's banking services to allow credit card transactions among most of its museum shops.
Is the Vatican bank ready for the changes required by the Brussels-based financial monitoring body on banks? Will it further wrestle for authority with the European Commission?
Every quarter and penny donated during church service in Roman Catholic churches world-wide counts especially to the faithful, who may not even have enough for food and other basic services.
Is it right for the Vatican Bank to keep the records of its transactions a secret for public scrutiny? Is it not worthy to know how the donated money of the faithful be accounted for in return?
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