Pope Francis Reshuffles Leadership of Scandal-Riddled Vatican Bank, Names New Head

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By Esther Tanquintic-Misa | July 10, 2014 3:25 PM EST

Pope Francis has reshuffled the leadership of scandal-riddled Vatican Bank and has named Jean-Baptiste de Franssu, the former head of Invesco Ltd.'s European business, to lead it.

REUTERS/Tony Gentile
Jean-Baptise de Franssu (L), new president of Vatican Bank IOR, outgoing President Ernst Von Freyberg (R) and Cardinal George Pell leave at the end of a news conference at the Vatican July 9, 2014. The Vatican said on Wednesday it will separate its bank's investment business from its Church payments work to try to clean up after years of scandal including allegations of money laundering and tax evasion. French businessman Franssu was named as the new head of the bank, officially known as the Institute for Works of Religion (IOR), succeeding German lawyer Freyberg, who has run the bank since February 2013. REUTERS/Tony Gentile REUTERS/Tony Gentile (VATICAN - Tags: BUSINESS RELIGION)

Australian Cardinal George Pell, appointed prefect of the Secretariat for the Economy in February, also announced his economic plan for the Holy See on Wednesday. His plans basically work around building on a reform framework.

"Our ambition is to become something of a model for financial management rather than cause for occasional scandal," Pell said.

Franssu's main task is to oversee the transfer of the bank's asset-management business to a newly formed Vatican department over a two-year program, essentially ridding Vatican Bank of other skills other than just handling only payment services for priests and religious organizations.

Franssu replaces Ernst von Freyberg, who was appointed by Benedict XVI before he announced his abdication in February 2013.

"Excellent progress has been made through adherence to international standards," a statement released by the Vatican said. "A new anti-money-laundering framework has been put in place and every effort continues to be made to comply with this framework."

Pell's plan, approved by the pope earlier this year, will see the bank playing a smaller role in the Roman Catholic church's finances. He said a new office to administer billions of dollars' worth of investments will be created, which will also review the Vatican's pension fund.

"Basically, the ambition is to be boringly successful, to get off the gossip pages," Cardinal Pell said in the interview with the Boston Globe. "The idea is to introduce modern accounting standards, to strengthen transparency, to increase self-sufficiency and coordination, and eventually to generate more income with lower costs."

On Tuesday, the reforms Pope Francis worked to be instituted at the scandal-plagued bank created a massive drop in its 2013 profits.

Read: Pope Francis' Reforms Trigger Drop in 2013 Profits at Embattled Vatican Bank

Among the important reshuffling moves unveiled on Wednesday include:

  • A downsizing of the troubled Vatican Bank. Administering investments from its estimated $8 billion in holdings will be taken over by a new Vatican Asset Management office, reporting to Pell.
  • The "ordinary section" of the Administration of the Patrimony of the Apostolic See (APSA), responsible for personal and procurement, will be transferred to Pell's Secretariat for the Economy.
  • Appointment of French businessman Jean-Baptiste de Franssu as the bank's new president. From 1990 to 2011 de Franssu was an executive with Invesco Europe, an investing firm with $35 billion in assets under management.
  • Appointment of one new member to a body of cardinals governing the bank, and of several lay people to a board of directors responsible for routine oversight.
  • Creation of two commissions to study the sustainability of a pension fund for the Vatican's roughly 5,000 employees, and a reorganization of media activity expected to result in a downsizing and greater emphasis on social media.

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(Photo: REUTERS/Tony Gentile / )
Jean-Baptise de Franssu (L), new president of Vatican Bank IOR, outgoing President Ernst Von Freyberg (R) and Cardinal George Pell leave at the end of a news conference at the Vatican July 9, 2014. The Vatican said on Wednesday it will separate its bank's investment business from its Church payments work to try to clean up after years of scandal including allegations of money laundering and tax evasion. French businessman Franssu was named as the new head of the bank, officially known as the Institute for Works of Religion (IOR), succeeding German lawyer Freyberg, who has run the bank since February 2013. REUTERS/Tony Gentile REUTERS/Tony Gentile (VATICAN - Tags: BUSINESS RELIGION)
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