Vatican City
Reuters
Pope Francis on Tuesday acted to eliminate wiggle room or foot- dragging by Vatican departments in imposing tighter financial controls, setting a deadline for the closing of investment portfolios in foreign banks, including in Italy.
Francis issued a document known as a “rescriptum”, or re-writing, making clear that all investments by all departments would have to go through the Vatican bank under new rules that come into effect on 1st September.
The Vatican’s elite Swiss Guards march in front of the Vatican bank tower at the Vatican, on 6th May, 2014. PICTURE: Reuters/Tony Gentile/File photo.
A greater role for the bank is a key plank in a centralisation policy announced last month that strips all Vatican departments of the ability to invest their funds independently.
It was this practice that allowed the Secretariat of State to invest directly in a London building that is at the centre of a corruption trial. The botched deal resulted in a loss of €140 million. All the defendants have denied wrongdoing.
Tuesday’s papal document clarified that there were no exceptions to the rule regarding the central role of the Vatican bank, officially known as the Institute for Works of Religion, as stipulated in an article of the Vatican’s new constitution, issued on 19th March.
In July, the Vatican issued an new overarching policy on investments to ensure they are ethical, green, low-risk, and avoid weapons industries or health sectors involved in abortion, contraception or embryonic stem cells.
The policy ordered Vatican departments to close their investment accounts or stock holdings in foreign banks, including in Italy, and transfer them to the IOR, to be overseen by a department called the Administration of the Patrimony of the Holy See.
In Tuesday’s document, the Pope set a deadline of 1st October for the transfers to be completed, indicating that some departments were dragging their feet.
The Vatican’s financial investments, excluding real estate, are estimated at just under €2 billion.
In June, the Vatican established a committee to oversee investment ethics. It is made up of non-Italians: Irish-American Cardinal Kevin Joseph Farrell, who is based at the Vatican, and four outside lay financial experts in Britain, Germany, Norway and the United States.
Many Vatican financial scandals in the past have stemmed from an abundance of trust in financial managers, almost always Italians, who were friends of Vatican officials.
Discussing finances in an exclusive interview with Reuters last month, Pope Francis gave the example of priests who had no financial experience being asked to manage the finances of a department and who in good faith sought help from friends in the outside financial sector.
“But sometimes the friends were not The Blessed Imelda,” the Pope said, referring to a 14th-century, 11-year-old Italian girl who is a symbol of childhood purity. Francis blamed “the irresponsibility of the structure” for past financial scandals.
