October 5, 2010. Just as the Vatican has its own postal service, police and fire department, so it also has its own bank. It’s a means of ensuring the Holy See’s independence, to avoid financial speculation with the Church’s money, and to save costs for dioceses and religious orders.
Its official name is IOR, the Institute for Works of Religion. This is a unique bank: it only makes ethical investments, their profits go to charity and their customers are dioceses, religious orders and Vatican departments and employees.
"The IOR is a very sui generis bank, that was created in 1942 by Pope Pius XII. According to its statutes it only can receive deposits from Vatican officials, religious congregations, local clergy and other people like that."
A year ago, Benedict XVI appointed Italian Ettore Gotti Tedeschi as new president of the bank of the Vatican. He asked him to make the bank completely transparent - that is, adapt it to European laws that require customers to identify all operations.
According to the Vatican, since January it’s been working with the Bank of Italy and European organizations to fully regularize its processes before December 31.
But bureaucratic mistakes can still be made. Last September, the IOR made two transfers without revealing the names of clients. These were then blocked by the Italian authorities.
The Vatican bank chief said it was an internal treasury operation, not an order for its customers. He called it a misunderstanding.
"There are a number of accounts whose owners are known only to the bank. And I think this is the current problem in the sense that to adapt to European anti-money laundering rules – a work that the bank is doing now by its President Gotti Tedeschi, after a mandate of the Pope and Bertone – it is necessary that these accounts are removed or become totally transparent."
Since the incident, the Pope has publicly supported the Bank’s current president.
"If there is a management team that’s capable of making the IOR transparent, this is it. Unfortunately, as often happens with the paradoxes, the injustices of history, a more transparent management is the one who has problems."
The only Vatican bank office is located here in the tower of Niccolò V. It has 130 employees and 44 000 current accounts. Its interest rates range from 4 and 12%, and there’s no tax. It’s financial assets are thought to amount to 5 billion euros.
It’s a place surrounded by discretion. The most visible part of the IOR are its ATM machines whose on-screen instructions are – naturally – in Latin.