♠ Posted by Emmanuel
at 7/11/2014 01:30:00 AM
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| Nowadays, the Pope appoints merchants to run the show instead of Christ running them out. |
Part of the reason why Pope Francis' predecessor Benedict XVI had a tumultuous reign was due to money matters. How does the Vatican clean up shop? The same options faced by state-owned banks were on the menu: Privatization made limited sense since these small-sized entities could hardly operate on an independent basis in the city-state. The Vatican bank (IOR) had assets worth EUR 5 billion--not a lot in the wider (European) scheme of things. However, further secularization has been the path taken from those available. With clerics routinely abusing their status in financial matters, it was time to resort to professional management:On June 28 [2013], Italian police arrested a silver-haired priest, Monsignor Nunzio Scarano, in Rome. The cleric, nicknamed Monsignor Cinquecento after the €500 bills he habitually carried around with him, was charged with fraud and corruption, together with a former secret service agent and a financial broker. All three were suspected of attempting to smuggle €20m by private plane across the border from Switzerland.Prosecutors alleged that the priest, a former banker, was using the Institute for Religious Works – the formal name for the Vatican’s bank – to move money for businessmen based in the Naples region, widely regarded in Italy as a haven of organised crime. Worse still, Scarano (who, together with the other men, has denied any wrongdoing) had until only a month earlier been head of the accounting department at the Administration of the Patrimony of the Apostolic See, the treasury of the Vatican.
It follows an initial clean-up of the Institute for Religious Works (IOR), the official name of the Vatican bank, last year that saw the closure of 3,000 customer accounts under pressure from international anti-money laundering regulators concerned about its use as a tax haven. The latest shake up has a wider scope, encompassing the Vatican’s long secretive central bank, its media operations and all its assets – from real estate to stocks and bonds.
It also brings a cadre of lay advisers and finance professionals into the Vatican’s closed hierarchy, including prominent figures such as Lord Patten, the former BBC Trust chairman, and Clemens Boersig, former head of finance at Deutsche Bank and chairman of the German bank’s foundation. On the board of the scandal-ridden Vatican bank, lay advisers will now outnumber clergy...
Management of the IOR’s €4bn in assets and the billions of euros of real estate held by APSA will be handed to external, specialist asset managers focused on “ethical investment”.The irony should not be lost on the rest of us. Many blamed the global financial crisis on a lack of religiosity among bankers and their ilk. However, it turns out that the world's largest religious organization was hardly free from the ills plaguing money managers elsewhere. So, to clean up shop, Pope Francis is making the Vatican bank's board more secular to look more like regular banks without a religious charter.
At this rate it will be nothing more remarkable than a fairly small regional bank whose funds are largely managed by ethical fund investors. From both ethical and financial standpoints, this may be a good thing given the Vatican bank's rather checkered recehistory.
