Vatican Bank Committed to Fight Against Money Laundering

The Vatican Bank has increased efforts to comply with international rules to control money laundering and is committed to transparency, Paolo Cipriani, director general of the Institute for the Works of Religion, said today in Rome.

“We have stepped up anti-money laundering controls to protect the reputation of the Holy See, remove the veil and shadow of the past” when the IOR was known as one of the world’s most secretive banks, Cipriani said today at the first-ever briefing with reporters inside the bank in Vatican city. “There are no secret numbered accounts here,” Cipriani said.

The Vatican bank has 33,000 accounts with assets of around 6 billion euros ($7.5 billion), Cipriani said today. The bank’s cash machines allow users to operate in Latin.

Set up in 1942 by Pope Pius XII to manage the Vatican’s finances, the bank, known as the IOR from its Italian initials, is controlled by the pontiff and has recently been at the center of several financial scandals. Cipriani and his former boss, Ettore Gotti Tedeschi, were placed under investigation by Italian prosecutors in a probe in 2010 for allegedly omitting data from some wire transfers from an Italian account.

Prosecutors seized 23 million euros ($28.6 million) from a Rome bank account registered to the IOR amid suspicions of money-laundering violations. The funds have been unblocked though “for administrative reasons, we are still waiting to have permission to use them and they are still at Credito Artigiano SpA.”

In March, Il Sole 24 Ore, Italy’s main financial daily, reported that JPMorgan Chase & Co. was closing an account held by the IOR to comply with Italy’s anti-money-laundering rules. The biggest U.S. bank, in a Feb. 15 letter to the IOR, cited a lack of transparency on payments through the IOR’s account in Milan, the newspaper said.

The bank does not engage in speculative investments, Cipriani said.

“Investments in equities are no more than 5 percent of total assets, they are quite limited and have a low return because they are aimed at protecting the capital and not at making profit,” he said. “We have no relationships with banks or states offshore, money transfers are controlled.”

Most of the IOR’s assets are invested in government bonds, he said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE