The Institute for Works of Religion – colloquially known as the ‘Vatican Bank’ – has said it has laid the groundwork to make it an “outstanding service provider” in Catholic finance.
In its financial statements for 2013 released today, the IOR gave details of its first phase of reform.
Ernst von Freyberg, IOR’s president, said the institute has focused on making itself “compliant with financial regulation, safer and more transparent, so as to create options for the Holy Father to decide on the future of the Institute.”
“Through this work we have laid the ground for a new team to make the IOR a truly outstanding service provider in Catholic finance,” he added.
Furthermore, he stressed that “notwithstanding this housekeeping effort,” the institute has delivered a “creditable performance for its customers, first and foremost the Holy See itself.” In the first half of 2014, the Vatican’s finance facility “delivered a very positive performance that validates the efforts of all those working at the IOR,” he said.
The IOR’s reforms have put a large dent in its profits, however. These fell in 2013 to 2.9 million euros, from 86.6 million euros in 2012.
The second phase of the IOR’s reform concerns the integration of the IOR into the new economic-administrative landscape of the Vatican. The institute says this will be entrusted to a new board and executive team, operating under a new governance structure.
In summary, the IOR statement says:
* Phase I 2013-2014 of IOR reform concluded: all accounts checked, principal legacy cases investigated, transparency achieved, procedures improved.
* Satisfactory operating performance in 2013, Net Profit and Assets under Management affected by reform process.
* Successful first half of 2014, with strong financial results.
* Phase II: IOR to continue to serve the Catholic Church worldwide with a new focus, a new governance and a new board and executive team.
The IOR, which is closer to a finance facility for the Church’s charitable funds than a bank, has come under increased scrutiny in recent years due to allegations it has sometimes been used as a mechanism for financial misconduct. Reforms to make the organisation more transparent were first introduced by Benedict XVI.
In June 2012, the IOR gave a first presentation of its operations and published its first ever annual report last year. Last June, Pope Francis created a special investigative Pontifical Commission to study IOR reform, and in April this year, he approved respective recommendations on the IOR’s future.
More extensive reform is expected in the second phase which is to be announced tomorrow.
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On the NET:
IOR’s financial statements for 2013
