The Vatican

Vatican finances: how they work and what are their organs?

It is not easy to understand how Vatican finances work. The changes made in recent years have created some new control bodies. In this article we explain which entities manage the Vatican patrimony and what each one is responsible for.

Andrea Gagliarducci-July 29, 2022-Reading time: 7 minutes

Photo: headquarters of the IOR, the Vatican Bank. ©CNS photo/Paul Haring

It is not easy to untangle the folds of Vatican finances. Certainly, the latest reforms brought by Pope Francis force a constant updating. The competencies and management of offices are changed, dicasteries are redesigned and even who and how money is managed is redefined. But how did the Pope's finances come about, how have they been structured throughout history, and how are they managed now? 

The origins of modern Vatican finance

Just one day after the death of Pope Pius XI, on February 10, 1939, Monsignor Angelo Pomata appeared at a counter of the "Opere di Religione". The cashier was Massimo Spada. Pomata was there by order of Eugenio Pacelli, who had assumed the office of Camerlengo with the death of the Pope. Pacelli - who would be elected Pope at the next conclave - had ordered Monsignor Pomata to deposit the money found in the Pope's desk drawer, in lire and dollars. 

Spada opened an account, under the name "Secretariat of State - Obolus New Accounts". The history of modern Vatican finances begins there. Through that current account, and then through the total autonomy of the "Istituto di Opere di Religione" - the so-called "Vatican bank", which in reality is more like a trust fund - funds could be made available to the Pope at his discretion. Funds with which to replenish the budget of the Holy See, as has happened recently. Or funds to be earmarked for charitable works. Or funds - and this was the case with Pius XII - to go through secure channels, to help peacekeeping operations.

The Vatican State

If the call "Onbolo AccountThe "Institute for the Works of Religion" was founded a few years before the Holy See began to provide itself with financial instruments. From 1870 to 1929, after Rome was invaded by the Kingdom of Italy, the Holy See had no territory. But in 1929, with the Conciliation and the signing of the Lateran Pacts, the Vatican City State had been created, "that great body which serves to support our soul", in the words of Pius XI. 

The Italian government had also agreed to transfer a sum to the Holy See to compensate for the "evil" caused by the loss of the Papal States. Pius XI personally took charge of the negotiations, to the point of agreeing to an indemnity on the part of the Italian State of 1750 million lire, partly in cash and partly in bearer bonds. 

What to do with this patrimony? Two months after the signing of the Lateran Pacts, and almost thirty days before their ratification, the Pope contacted the engineer Bernardino Nogara, who was manager of the Italian Commercial Bank, to entrust him with the management of the funds coming from the Financial Convention.

Bernardino Nogara brought the concept of stock ownership to the Vatican. He was entrusted with the Special Section of the Administration of the Patrimony of the Apostolic See, and from that position - analogous to a central bank - he bought shares, with conspicuous and successful investments. It was the time of the Great Depression of 1929, and it allowed Nogara to buy shares in several companies. Nogara was thus able to sit on the boards of directors of countless Italian companies, which increased his international prestige. And, precisely during the Great Depression, Nogara created two companies, Grolux and the Swiss Profima, with the idea of diversifying the investments of the Holy See, focusing on gold and bricks. 

The poles of Vatican finances

The Constitution of the Vatican City State thus laid the foundations for the two main financial institutions of the Holy See: the Institute for the Works of Religion and the Administration of the Patrimony of the Apostolic See. 

The first is generally known as the "Vatican Bank"but in reality it is not a bank, has no offices outside the Vatican, and only recently obtained an IBAN, after the Holy See entered the SEPA transfer zone, i.e. the Single European Payments Area.

The IOR's road to recognition by foreign institutions as a reliable counterparty has been particularly long, as it has been for all financial institutions in the world. John Paul II established the IOR's new statutes in 1990, while the first external audit dates back to the mid-1990s. 

In the 2000s, the IOR implemented a series of innovative measures, which were also recognized by the international evaluators of MONEYVAL, the Council of Europe's committee that assesses States' adherence to international standards against money laundering and terrorist financing. 


The other pole of Vatican finances is the Administration of the Patrimony of the Apostolic See, the APSA. It has a function similar to that of a "central bank". Until the early 2000s, the APSA also provided pensions and had registered accounts, but these were closed to better meet international standards.

As a "central bank," APSA also has the management of the Holy See's real estate assets. According to APSA's first balance sheet, published in 2021, it says the Vatican owns 4,051 properties in Italy and another 1,120 worldwide, mainly in luxury real estate investments in London, Paris, Geneva and Lausanne. 

"It is also thanks to the market-rate rents charged on the prestigious real estate owned in Paris and London, that it is possible to grant the Apostolic Almshouse a free loan for the use of a structure such as Palazzo Migliori, a stone's throw from the colonnade of St. Peter's, for the reception of the homeless hosted by the volunteers of the Community of Sant'Egidio. In addition, with the purchase of a property near the Arc de Triomphe in Paris, thanks to the mediation of Sopridex, the seller earmarked part of the proceeds of this operation for the construction of a church in a Parisian suburb".

Since last year, APSA has also been managing funds that were previously managed directly by the Secretariat of State, and it is assumed that the entire Vatican apparatus will have a single sovereign fund managed by APSA.

Autonomous entities

In addition to the administration of the Secretariat of State, there are other entities that are autonomous. The Governorate of Vatican City State, for example, has its own budget and resources, although they have not been disclosed since 2015. A consolidated budget that includes that of the Curia, i.e., that of the Holy See's agencies, and that of the State has long been envisaged, but has not yet been achieved. The most important revenues of the Governorate are those of the Vatican Museums and the museum complex of the Papal Villas.

It remains to be seen, however, whether the Dicastery for Evangelization will inherit the financial freedom of the Congregation for the Evangelization of Peoples. When the missionary dicastery was actually established under the name Propaganda Fide in 1622, it was planned to give it financial autonomy, so that money could go directly to the missions. The former Propaganda Fide also had real estate, now estimated at 957 properties including land and buildings in Rome. 

It should also be borne in mind that, in reality, all the dicasteries enjoyed financial autonomy, within certain limits, because they received personal donations and for personal purposes. When Cardinal George Pell, as Prefect of the Economy, spoke of hundreds of millions of euros hidden, i.e., concealed, in various accounts, he was speaking precisely of the personal resources of the dicasteries that they could administer liberally. Nor could the dicasteries choose the IOR as an investment bank, so it is not surprising, for example, that the Secretariat of State invested with Credit Suisse. 

Supervisory bodies

The APSA, therefore, increasingly assumes the role of a central bank, which is why it underwent a minor reform in 2013, which changed the role of advisors, making them part of a supervisory board. Pension provision, finance management and sovereign wealth funds will be in the hands of the administration. 

The Secretariat for the Economy is the controlling body for the finances of the Holy See. It oversees budgets, gives spending guidelines and rationalizes costs. The Prefect of the Secretariat for the Economy is also a member of the Commission on Confidential Matters, which establishes which acts of an economic nature must be confidential. The Secretariat for the Economy also oversaw the regulation of the Vatican's procurement code.

It is worth mentioning that all these decisions follow the Holy See's accession to the Merida Convention, which is the United Nations Convention against Corruption. As a result of this accession, the office of the Auditor General is now also defined as the "anti-corruption office" of the Vatican.

The Auditor General

The Auditor General, needless to say, is in charge of control, while the Council of Economy is a kind of Ministry of Finance, whose task is to direct the financial work. 

In this case, the novelty lies mainly in the name and approach, not in the substance. The Secretariat for the Economy used to be the Prefecture for Economic Affairs, which was reformed in 2012 and almost equated to a Ministry of Finance. The Council of the Economy used to be the Council of Fifteen, that is, of cardinals called to oversee the financial approach of the Holy See.

Finally, there is the Financial Information and Supervisory Authority. This is an intelligence authority, which has only one entity under direct observation, which is the IOR. The Authority is tasked with investigating suspicious financial transactions reported to it and delivering the reports to the Promoter of Justice, who will then decide whether or not to continue the investigation. The Authority also plays a crucial role in international cooperation, due to the relationships it exchanges with its counterparts, to the extent that it has also played a role in the resolution of some international cases.

The reform of finances desired by Benedict XVI also led, in 2013, to the creation of a Financial Security Committee, a body that certifies the sovereignty of the Holy See and allows the Secretariat of State (i.e., the government) and other agencies to work together to prevent money laundering. 

Consistent commitment to the mission

This is, broadly speaking, the financial structure of the Holy See. We read in MONEYVAL's first report in 2012 that the Holy See's move toward financial transparency was a path "consistent with its international nature and character," as well as with "its religious and moral mission." It is an important commitment to be credible in the world. For the Church, after all, money is not an end, but a means, and it serves the mission, which is a mission first and foremost for the least.

The authorAndrea Gagliarducci

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