New board takes over at the Vatican bank

In the latest of Pope Francis’ sweeping reforms to Vatican finances, he has appointed a new board to the scandal-plagued Vatican bank (IOR) with French financier Jean-Baptiste de Franssu as president.

The outgoing president, German industrialist Ernst von Freyberg, who was appointed by Benedict XVI in one of his final acts as Pope, said the IOR had completed the first phase of its reforms, investigating all of its clients, and has now “created transparency”.

The IOR is closing more than 3,000 suspect or inactive accounts and had terminated more than 300 customer relationships after deeming that they did not have the criteria to hold an account at the bank, he said.

At the press conference announcing the changes on Wednesday, Cardinal George Pell, prefect of the Secretariat for the Economy recently appointed by Pope Francis to oversee the IOR, thanked the old board for ­“navigating the ship through sometimes stormy seas”.

He said he wanted the Vatican bank to become “a model for transparency instead of a cause for occasional scandal”. Mr de Franssu said the handover had been “amicable”.

But the new president has a difficult task ahead of him. The clean-out has come at a heavy cost, with the bank revealing a nosedive in profits last year. Figures showed profits plummeted from €86.6 million (£68.9m) to €2.9m (£2.3m) due to the “extraordinary” costs of hiring external consultants to advise on compliance and transparency and write-downs to shed undesirable investments at a loss.

There are signs that the bank has now turned a corner, the IOR said, as the figures from the first half of 2014 show it is on track to return to pre-2013 profit levels.

Other board members appointed include former US ambassador to the Holy See, Mary Ann Glendon, and British-Australian philanthropist Sir Michael Hintze.

In an interview with the German daily Bild Zeitung on 9 July, Mr von Freyberg said: “Sometimes one has the feeling that right in the Curia of all places, not only the best brains, but also great connivers are to be found.”

He was also critical of the Vatican’s consultors and lawyers. He deplored that “in the past, dubious investments have cost the Pope €45m (£35m)”.

(See Jason Berry, page 4.)