Pope Francis has issued new laws governing the Vatican’s bank, ruling that the accounts must be signed off by an external auditor and staff sign up to a code of ethics. Source: The Tablet.
Francis has approved a set of statutes which mark another step in his reforms of Vatican finances which includes cleaning up an institution that has long been a source of scandal and embarrassment for the Church.
Given its location in a small and discreet sovereign state, the bank, known as the Institute for the Works of Religion (IOR), has been vulnerable to money laundering, corruption, tax-evasion and embezzlement.
It famously became embroiled in financial controversies in the latter part of the 20th century including the collapse of the Banco Ambrosiano, of which the IOR was a significant shareholder, and convicted fraudster Michele Sindona, who used the Vatican to channel money from his banks into Switzerland.
Francis, who toyed with closing the Vatican bank in the early days of his pontificate, is putting the bank under firmer oversight while ensuring it follows its original purpose of holding assets intended for “the works of religion or charity”. His statutes update ones set down by Pope St John Paul II in 1990.
The outside auditor, the new rules explain, will be required to sign of financial statements, according to international standards of accounting. The auditors will offer their “judgment on the Institute’s balance sheet” and go through all the “books and accounting documents”. The auditors chosen by the bank will serve for a term of three consecutive financial years, which can be renewed only once. Up until now, the bank has relied on internal auditors working on constantly renewable terms, although has made use of Deloitte accountancy firm to audit financial statements.
The bank, which holds assets of €5 billion ($8.3bn), offers low-risk savings accounts to a tightly controlled group of clients, mainly religious orders, clergy and Vatican employees. Last year it made €17.5 million ($29m) profit, down from €31.5m ($52m), a decrease which the bank said was down to market turbulence. The profits go to the Pope for him to distribute.
Pope issues new laws governing Vatican bank (The Tablet)
Pope Francis renews the Statutes of the Vatican Bank (IOR) (Vatican News)