Vatican Bank Under Scrutiny in the Wake of Pope Benedict’s Resignation

Michael Teague |

Pope Benedict XVIThose who were unaware that the Vatican had its own bank were likely also in the dark about its assets.  Although, on this point, it turns out they were not too much different from the rest of us.  Indeed, the Vatican has only once released information about its assets, for the year 2011, when it had 20,772 clients (two-thirds of these members of the clergy), 33,000 accounts, and $8.2 billion in assets under its management.

Over the past few years, and particularly under the guidance of Pope Benedict XVI, the Vatican has been more responsive to pressures from the European Union to comply with international banking standards. One of the last things Benedict did before his resignation was to appoint a German aristocrat as the bank’s new president, breaking years of control of the Vatican’s finances by a small group of Italians.  The latter had been suspected of collusion with Italy’s famously corrupt financial and political classes.

Back in 2009, the Vatican penned a deal that committed it to accepting the jurisdiction of the European Union Court of Justice in disputes over the monetary arrangement with Europe that allowed it to print Euro.  The arrangement required the Vatican to commit to money-laundering standards, which, as one European official put it, marks “the first time in history the Vatican recognized a superior authority that is not God”.  No small deal, to be sure.

That said, money-laundering is still the biggest accusation levied against the Vaitcan’s banking operation, and despite all the historic changes that have been enacted in recent years, there is stiff resistance from within the church to any outside intrusion.  This is all very interesting, however, because it provides a unique view of the power struggle currently taking place within the church in the wake of Pope Benedict’s resignation.

With Italian and European authorities beginning to get comfortable with more aggressively investigating the church’s finances, in particular whether the accounts of clerics are being used for other interests (from insurance fraud to political bribes, if accusations are to be believed), the confrontation within the church will take place between those who are advocating for greater transparency and acceptance of the modern playing field, versus those who are still clinging to the church’s traditional privileges and powers.

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