Pope caps reform of Vatican bank with new statutes

The Vatican’s elite Swiss Guard march past the Institute for Works of Religion, the Vatican’s once scandal-ridden bank. (Reuters)
Updated 11 August 2019

Pope caps reform of Vatican bank with new statutes

  • New rules ban employees from consultancies or roles with outside institutions

VATICAN CITY: Pope Francis has approved new statutes for the Vatican Bank, making an external audit obligatory and introducing other changes to bolster reforms that have turned around the once scandal-ridden institution.

The statutes, approved in a papal document released by the Vatican on Saturday, cap more than six years of changes at the bank since Francis was elected in 2013, since when he has made reform of the bank one of his priorities.

The bank had been caught in previous years in cases of corruption, tax evasion, embezzlement, money laundering and real estate fraud, some involving top officials and prelates, damaging the Vatican’s ethical credentials.

Andrea Tornielli, the Vatican’s editorial director, called the new rules “an important step in the process of adhering to the best international standards.”

Soon after his election, Francis considered closing the bank, formally known as the Institute for Works of Religion (IOR), but decided to continue reforms launched by his predecessor Pope Benedict.

The new statutes make an external audit mandatory. While this has taken place in the past few years, the previous statutes, issued in 1990 by Pope John Paul, called for internal audits.

The new rules ban bank employees, nearly all of whom are non-clerics, from holding consultancies or other roles with outside institutions.

The number of members of the lay board of supervisors, which is made up of internationally known outside financial experts, is increased from five to seven.

This will effectively strengthen the role of the lay board and weaken that of a supervisory commission of cardinals, whose number remains five.

For decades before reforms were implemented, the IOR was embroiled in numerous financial scandals as people with no right to have accounts opened them and used them for illicit purposes with the complicity of corrupt insiders. In the past six years, hundreds of accounts have been closed at the IOR, whose stated purpose is to manage funds for the Church, Vatican employees, religious institutes, or Catholic charities.

Last year, the Vatican’s controller, the Financial Information Authority (AIF), carried out an on-site inspection of the IOR to ensure it was complying with anti-money laundering legislation and the outcome was “substantially positive,” the AIF said in its report for that year.

In 2017, Italy put the Vatican on its “white list” of states with cooperative financial institutions, ending years of mistrust. The same year, Moneyval, a monitoring body of the Council of Europe, gave Vatican reforms a mostly positive evaluation, particularly those carried out at the bank.


Oman’s sultan says government will work to reduce debt

Updated 23 February 2020

Oman’s sultan says government will work to reduce debt

DUBAI: Oman's Sultan Haitham bin Tariq al-Said said on Sunday the government would work to reduce public debt and restructure public institutions and companies to bolster the economy.
Haitham, in his second public speech since assuming power in January, said the government would create a national framework to tackle unemployment while addressing strained public finances.
"We will direct our financial resources in the best way that will guarantee reducing debt and increasing revenues," he said in the televised speech.
"We will also direct all government departments to adopt efficient governance that leads to a balanced, diversified and sustainable economy."
Rated junk by all three major credit rating agencies, Oman's debt to GDP ratio spiked to nearly 60% last year from around 15% in 2015, and could reach 70% by 2022, according to S&P Global Ratings.
The small oil producing country has relied heavily on debt to offset a widening deficit caused by lower crude prices. Also, the late Sultan Qaboos, who ruled Oman for nearly 50 years, held back on austerity measures.
The country has delayed introducing a 5% value added tax from 2019 to 2021, and economic diversification has been slow, with oil and gas accounting for over 70% of government revenues.
Last week, rating agency Fitch said Oman was budgeting for a higher deficit of 8.7% for 2020 despite its expectation of further asset-sale proceeds and some spending cuts.
"We are willing to take the necessary measures to restructure the state's administrative system and its legislation," Haitham said in his first speech since the mourning period for Qaboos ended, without elaborating.
He said there would be a full review of government companies to improve their business performance and competence.
Oman observers have said that if Haitham moves to decentralise power it would signal willingness to improve decision making. Like Qaboos, he holds the positions of finance minister and central bank chairman as well as premier, defence and foreign minister.