The "Institute for the Operations of Religion"(IOR), known as the Vatican's bank, although not really a bank, offers some financial and fund transfer services to the Catholic Church in all its branches: the Holy See, related entities, religious orders, Catholic institutions, clergy, accredited diplomatic corps and employees of the Holy See. Most of the Institute's clients are engaged in charitable works in institutions such as schools, hospitals or refugee camps.
While banks such as Citybank have hundreds of millions of customers with offices in hundreds of countries, the IOR has less than 13,000 customers, with only one office, in Vatican City, in Torrione Niccolò V and 117 employees.
The sad events of the 1980s and 1990s
A series of sad events in the 1980s and 1990s marked the management of Vatican finances, from the time of Msgr. Marcinkus onwards, including the bankruptcy of the Ambrosiano Veneto bank, the Enimont case and several other controversial events, to say the least.
The change of course
The turning point came with Pope Ratzinger and his Motu Proprio of December 30, 2010, on the subject of financial transparency, the fight against money laundering, the creation of the Financial Intelligence Authority (AIF today ASIF) and the adaptation of the IOR to international transparency standards.
This "legislation - declared at the time the spokesman for the Press Office, Father Federico Lombardi - responds, therefore, as a whole to the need to maintain effective operations for entities operating in the economic and financial field (...) and - before that - to the moral requirement of 'transparency, honesty and responsibility' that in any case must be observed in the social and economic field (Caritas in veritate, 36)".
"The implementation of the new regulations will certainly require a lot of effort," Lombardi added, and in fact the transformation of the IOR has already led to the change of authorities, from presidents Gotti Tedeschi, Hermann Schiitl, Ernst von Freyber, to Jean Baptiste de Franssu, who has been in office since 2014, in addition to many officials.
With this document, the monetary agreement signed with the European Union on December 17, 2009 came into force on April 1, 2011 and the controls resulted in the closure of hundreds of accounts of entities or individuals that were not eligible and a series of strict control rules.
The IOR today with Pope Francis
The purpose of the Institute - as the Pope reaffirmed in a chirograph dated 2023 - is to "lend to the custody and administration of movable and immovable goods" for a precise purpose: "destined for works of worship or charity".
Today the IOR, after a path towards transparency, is subject to a precise regulatory framework and supervised by the Financial Information and Supervisory Authority (ASIF), which is part of the Egmont GroupThe Financial Intelligence Unit (FIU), the global forum that currently brings together financial intelligence units from 152 countries and jurisdictions for international collaboration and exchange of information against money laundering and crime.
The Vatican boasts of being fully included in the SEPA circuit, Single Euro Payments Area, can issue "Tertium millennium" debit cards of the VISA circuit, and in the Vatican City it is also possible to pay with cards of the international circuits.
The itinerary of Pope Francis
Following the guidance indicated by Pope Benedict XVI, on June 24, 2013 the Holy Father Francis erected the Pontifical Commission Concerning the IOR, in order to achieve complete and recognized transparency in its work.
It was followed by the Motu Proprio of July 11, 2013 to delimit the competence of the judicial bodies of the Vatican City State in criminal matters and the chirograph of July 18, 2013 to institute COSEA (Pontifical commission for study and guidance on the organization of administrative power). economy).
Also in 2013, on August 8, the Holy See's Financial Security Committee for the prevention and fight against money laundering was formed to bring the IOR in line with all international standards.
And then, on November 15, 2013, the Financial Information Authority (AIF, today ASIF), created by Benedict XVI with a Motu Proprio of December 30, 2010, was consolidated.
In addition, with the Motu Proprio of February 24, 2014 (Fidelis dispensator et prudens) Pope Bergoglio erected the Secretariat for the Economy and the Council for the Economy, replacing the Council of 15 Cardinals, with the task of harmonizing control policies.
Among the results of transparency, on November 18, 2014 the Italian State released funds blocked in September 2010 as a preventive measure.
In line with transparency, since 2013 the IOR has published its annual accounts on the internet, according to IAS-IFRS international accounting criteria, with €29.6 million of profit in the management of 2022.
Also indicative of these changes are the actions taken by the IOR on December 1, 2017 against some employees, and that on February 6, 2018 the Civil Court of Vatican City State recognized that two former long-term IOR managers were responsible for mismanagement.
In 2021, the fruits of this turnaround mean that Moneyval, the Council of Europe body that oversees the fight against money laundering and terrorist financing, after a lengthy "inspection," has given the Holy See five "substantial" effectiveness judgments, six "moderate" effectiveness judgments, and in no case a "low" effectiveness judgment.
The Institute's assets, as of December 31, 2022, clientele consisted of religious orders (49 %), dicasteries of the Roman Curia, offices of the Holy See and Vatican City State and apostolic nunciatures (26 %), episcopal conferences, dioceses and parishes (91 %), cardinals, bishops and clerics (71 %), employees and retirees of the Vatican (71 %), foundations and other entities governed by canon law (21 %)
Deposits amounted to EUR 1.8 billion, managed portfolios amounted to EUR 2.9 billion and portfolios under custody and administration amounted to EUR 477.7 million for total deposits of EUR 5.2 billion.
A Vatican source questioned by OMNES on how transparent the IOR is currently in financial matters, on a scale of one to ten, answered without hesitation "ten" and added that according to an internal evaluation, the Vatican City State would be approximately eighth in the world ranking for the fight against money laundering and terrorist financing.
The IOR was established by Pius XII on June 27, 1942, its origins go back to the "Commission ad pias causas" instituted by Leo XIII in 1887 and today the Supervisory Commission of Cardinals is made up of five cardinals appointed for five years by the Pope, with the possibility of a second term.
