The pope’s financial gospel and the Vatican bank

UPDATE: Yesterday it was the church and wealth. Today Pope Francis took aim at the shortcomings of the global economic system.

Addressing several new ambassadors to the Vatican, the pope said:

“The worship of the golden calf of old has found a new and heartless image in the cult of money and the dictatorship of an economy which is faceless and lacking any truly humane goal.

The worldwide financial and economic crisis seems to highlight their distortions and above all the gravely deficient human perspective, which reduces man to one of his needs alone, namely, consumption.”

The full test is here, and well worth reading. Yesterday, he spoke about the church and money.

“When a priest, a bishop goes after money, the people do not love him – and that’s a sign…. St. Paul did not have a bank account, he worked, and when a bishop, a priest goes on the road to vanity, he enters into the spirit of careerism – and this hurts the church very much – [and] ends up being ridiculous: he boasts, he is pleased to be seen, all powerful – and the people do not like that!”

The financial gospel of Pope Francis has become a little clearer every day, and these words from his morning Mass today in the Vatican guest house underline his conviction that the church’s pastors need to be true pastors – not business managers, CEOs or investment strategists.

The line about St. Paul not having a bank account, of course, brings to mind the Vatican bank and its future under the new pope. The bank has had more than its share of problems and scandals over the years, and there’s been speculation that Pope Francis envisions far-reaching reforms or even its suppression.

Dismantling the bank is not very likely, I believe, in part because of a last-minute decision made by Pope Benedict. Two weeks before he retired, Benedict appointed a new director of the bank, German financier Ernst von Freyburg; the move was seen as an effort to place the institution firmly on the path of reform.

This week, von Freyburg announced to his staff that the bank would publish its financial accounts before the end of the year and would launch its own website, in steps toward greater transparency.

A month ago, at the Vatican’s request, European banking regulators said they would expand their evaluation of the Vatican bank’s efforts to prevent money-laundering and the funding of terrorism – another move toward compliancy with international norms.

There are many who wonder, “Why does the Vatican need a bank?” and even some cardinals have recently posed that question. Some Vatican officials believe it’s a matter of sovereignty, and say that placing Vatican financial operations under the control of foreign banks is not a good idea.

Others point out that the Vatican bank, known officially as the Institute for the Works of Religion, has always had a function that makes it unique in banking circles. It was established in the late 1800s (under a different name) as a means to help Catholic groups send funds to needy Catholics in another part of the world.

Religious orders have used the bank to transfer funds to their houses in various countries, and missionaries rely on the bank’s expertise to help them find secure ways to exchange currencies and move money to particular church communities.

I remember once seeing an African bishop in line at the Vatican bank, holding some benefactors’ bank account numbers in one hand and building plans for a new diocesan center in the other. When his turn came up, he dumped it all in front of the cashier and asked him how he could make one thing lead to the other.

The Vatican bank has taken significant steps toward transparency over the last few years. Its director, Paolo Cipriani, in a press briefing last year, disclosed that the bank has about 33,000 accounts with assets of about 6 billion euros ($7.4 billion). He said that contrary to rumors, the bank had no secret accounts and no dealings with off-shore banks.

It’s still too early to tell exactly where Pope Francis will go with the Vatican bank, but it’s clear he wants to underline the function of service and move away from the kind of deals and practices that have landed the bank in trouble in the past.

As he said in this morning’s homily: “Pray for us that we might be poor, that we might be humble, meek, in the service of the people.”