Understanding the Financial Reforms of the Holy See

A vast set of reforms has been accomplished in the Vatican State since the creation of the Financial Information Authority (AIF) by Benedict XVI in 2010. FSSPX.News invites you to discover the organizations that have resulted from it and their organization chart.

Since 2010 and especially since 2014, the financial system reforms of the smallest state in the world have multiplied. They were needed in more than one way. But what is the result of these measures? And what are the bodies that now make up the economic and financial structure of the Vatican?

These elements are considered in their chronological order of appearance.

1. Institute for Works of Religion (IOR)

Founded in 1942 by Pius XII to allow transfers of funds abroad and to shield them from the Nazis.

It is a private bank that must ensure the conservation and administration of movable and immovable property entrusted to it by natural or legal persons and intended for works of religion or charity. It only accepts deposits from high officials of the Church and entities attached to the Holy See.

It is governed by a director, a board of directors, and a cardinal vigilance commission.

2. Administration of the Patrimony of the Apostolic See (APSA)

It was created in August 1967 by Paul VI.

It is the central bank of the Vatican, with the obligations and responsibilities of similar institutions around the world. It provides a treasury role for the Vatican City State and for the Holy See and must maintain relations with other central banks.

It is presided over by a cardinal, assisted by a secretary, and a council of cardinals.

3. Financial Information Authority (AIF)

It was created in December 2010 by Benedict XVI.

It is an institution linked to the Holy See, endowed with a public canonical legal personality and its seat is in the Vatican City State.

It is responsible for monitoring and regulating, in a preventive manner, institutions that exercise activities of a financial nature and the fight against money laundering; finally, it has a financial reporting role.

It is headed by a president, assisted by a board of directors and a director.

4. Secretariat for the Economy

It was created in February 2014 by Pope Francis.

It is in fact the Vatican Ministry of Finance or Economics.

It is responsible for implementing the economic policies and budgetary control of the dicasteries of the Roman Curia, institutions linked to the Holy See and the Vatican City State. In 2015, it was given the responsibility of administering the goods of the Holy See.

It is headed by a prefect assisted by a secretary general.

5. Council for the Economy

It was created in February 2014.

It can be seen as the management section of a finance ministry.

It is responsible for overseeing the economic management and looking after the structures and the administrative and financial activities of the Dicasteries of the Roman Curia, the institutions linked to the Holy See, and the Vatican City State. It is not a mere advisory body for the Secretariat for the Economy, but has its own authority.

It is made up of 15 members including eight cardinals and bishops and seven lay experts, chaired by a cardinal coordinator.

6. Auditor General

It was created in February 2014.

It corresponds to a court of auditors.

It is responsible for carrying out accounting and financial audits of the Vatican accounts. In February 2019, the post was elevated to the rank of Anti-Corruption Authority, within the meaning of the United Nations Convention against Corruption or the Mérida Convention.

It is headed by a examiner assisted by two deputy general examiners. A group of professional auditors, formed by the PricewaterhouseCoopers supports ecclesiastical personnel.

7. Committee for Reserved Issues

It was established by the Public Procurement Code promulgated in June 2020.

This code centralized all the attributions of public markets and contracts. There are, however, exceptions, which concern “the office and security of the Roman Pontiff, the Holy See and the universal Church” or are necessary “to ensure the mission of the Church in the world and to guarantee the sovereignty and independence of the Holy See or of the Vatican City State.” It will be up to this commission to determine on which acts of an economic nature it is necessary to maintain confidentiality.

It has a president and four other members.

8. Investment Committee

In process of approval.

Must guarantee, together with the Council of the Economy and the Secretariat of the Economy, the ethical nature of investments inspired by the social doctrine of the Church and, at the same time, their profitability.

Composition: high level external professionals.

Conclusion

Since 2010, the economic structure of the Holy See has strengthened considerably. The Vatican has now equipped the Ministry of Finance with three offices: economic policy, management, and audit. Added to that is oversight and information. The latest reforms have made it possible to bring together all the assets under the responsibility of the central bank, APSA, and to centralize the management of all public markets and contracts. The final touch will be to verify the ethical value of the investments.