In a move to restore the reputation of the Vatican Bank, Pope Francis has reshuffled most of the cardinals from the oversight body of the institution, replacing all but one of predecessor Pope Benedict XVI's appointments.
Pope Francis appointed four cardinals to give new blood to the
five member body tasked with overseeing the reform inside the
very secretive institution. The new members of the consortium are
the Secretary of State, Cardinal Pietro Parolin and Francis’s
close friend Cardinal Santos Abril y Castello. The other new
members are Cardinal Christoph Schoenborn, Archbishop of Vienna
and Cardinal Thomas Collins, Archbishop of Toronto. The one
holdover was French Cardinal Jean-Louis Tauran.
On February 16, 2013, a few days before announcing his resignation, Pope Benedict XVI had confirmed the members of the supervisory board of the bank for five years. Among them was the assistant secretary of state, Cardinal Tarcisio Bertone, who has been widely accused by many for the administrative failures of the Vatican under the rule of Pope Benedict.
The cardinals’ commission is tasked with approval of the overall strategy of the institution including charity work as well as reviewing accounts. It is a de facto link between the Pope and the board of superintendence, consisting of five lay men from around the world. Last February, Ernst Von Freyberg was appointed as the new president of the bank.
Pope Francis has practically canceled the decree of Benedict, replacing Bertone and other members of the committee in charge of reforming the bank formerly known as the Institute for Religious Works (IOR). In the middle of 2013, Pope Francis appointed a trusted friend, Monsignor Battista Ricca, to occupy the post of supervisor and appointed an independent commission of inquiry to examine the activities of the bank and its legal status.
His team shut down many of the suspicious accounts held in the bank and asked the Promontory Financial Group to audit the institution and bring it up to international standards.
Pope Francis has vowed to reform the bank or close it down completely after a series of scandals that tainted the reputation of the Holy Sea and the institution responsible for its charity around the globe.
Last July, IOR director Paolo Cipriani and deputy-director Massimo Tulli resigned, three days after the arrest of Vatican accountant Monsignor Nunzio Scarano on charges of plotting to smuggle 20 million euros ($26 million) into Italy from Switzerland.
Dubbed "Monsignor 500", the man is currently on trial in Rome on the smuggling charge and is also under investigation for money-laundering Vatican accounts.
In a 2010 scandal, Italian police seized 23 million euros from an IOR account. At the same time authorities launched an investigation against IOR's then-president, Gotti Tedeschi and director Paolo Cipriani for alleged money laundering from a Vatican account at an Italian bank. The money was later unfrozen and Gotti Tedeschi was exonerated as a suspect, while Cipriani hasn't been charged.
In 2012, JPMorgan, an American financial giant closed its IOR accounts while Deutsche Bank Italia stopped its 15-year term providing electronic payment services to the Vatican.
In October 2013, for the first time in its 125-year history, the Vatican bank disclosed its annual financial report to the public, showing a total of 4.98 billion euros in assets and 769 million euros in equity funds.