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He is the economist credited with having the most influence on the Archbishop of Canterbury. And Paul Dembinski is clear that regulation is not enough to improve banking - a fundamental cultural shift is needed
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Pope Francis has reformed the Vatican’s financial regulatory body that his predecessor set up in 2010 by specifically requiring that its officers be “free from any conflict of interest” and that they have “recognised professional competence in the legal, economic and financial fields”.
The reform was announced on Monday by means of a “motu proprio” that essentially provides new statutes to re-define the internal structure of the Vatican’s Financial Intelligence Authority (FIA). The new statutes were to take effect on Thursday and bring the FIA into compliance with new laws the Pope issued a month ago to strengthen financial transparency.
The revamped statutes re-affirm the FIA’s “full autonomy and independence” to supervise and regulate the monetary and commercial activities of Vatican agencies. These include the Governorate of Vatican City State, the Vatican Bank, the Administration of the Patrimony of the Apostolic See (APSA) and the Congregation for the Evangelisation of Peoples. The FIA also oversees the prevention of money-laundering and of financing of terrorism, as well as providing financial intelligence.
It is not clear if the FIA’s current president, Cardinal Attilio Nicora, will continue in his position, which is by appointment of the Pope. The cardinal was head of APSA for nine years, up until 2011, and that link could be seen as a “conflict of interest”.
Meanwhile, the Vatican also announced on Monday that the UK-based financial adviser, EY (formally known as Ernst & Young), had been hired to review the Governorate’s economic activities and its administrative procedures. The office was featured in the VatiLeaks scandal because of alleged corruption and cronyism in awarding outside contracts.
This is the third Vatican office that has been placed under outside review. The Promontory Financial Group has been monitoring the activities of the Vatican Bank and APSA.