Secretive Vatican bank takes step to transparency
VATICAN CITY – THE Vatican took another step in its efforts to be more financially transparent by publishing a first-ever annual report for the Vatican bank yesterday. It comes as Italian prosecutors investigate alleged money-laundering there, a Vatican monsignor remains in detention, and the pope himself probes the problems that have brought such scandal to the institution.
Earnings at the bank, known as the Institute for Religious Works, rose more than four-fold in 2012 as net trading income rebounded from a loss in 2011, the report said. The IOR said it earned (euros) 86.6 million (US$116.95 million) as the value of the securities it held and sold rose to (euros) 51.1 million from a loss of (euro) 38.2 million in 2011. More than (euros) 50 million of that profit was given to the pope for his charitable works.
The picture may not be so rosy for 2013, with rising interest rates cutting into profits and millions of euros earmarked for the IOR’s ongoing transparency process, which has involved hiring outside legal, financial and communications experts to revamp its procedures, review its client base and remake its image.
“Overall, we expect 2013 to be marked by the extraordinary expenses for the ongoing reform and remediation process, and the effects of rising interest rates,” bank president Ernst von Freyberg said in a statement.
He said the publication of the report meets the bank’s commitment to providing transparency about its activities.
Aside from the earnings, the 100-page report published Tuesday provides some fascinating reading about the secretive institution: The IOR in 2012 had (euros) 41.3 million in gold, metals and precious coins, owned a real estate company, and was bequeathed two investment properties worth (euros) 1.9 million. It also made some (euros) 25.8 million in loans in 2012.
The Vatican has long insisted the IOR isn’t a bank but a unique financial institution aimed at managing assets for religious or charitable works — a distinction that presumably helped it avoid typical banking regulations. Yet in the past year, the IOR has slowly revealed itself to work very much like a bank, providing asset management services to its clients, earning some (euros) 12.2 million in fees and commissions for such services in 2012 and making loans.
The Vatican is about to enter a second round of international scrutiny by the Council of Europe’s Moneyval committee, which helps countries comply with international norms to fight money laundering and terrorist financing.