Now that the smoke has cleared in Vatican City – both figuratively and literally – and the Catholic Church has new leadership, one of the many issues facing Pope Francis is the pressure being exerted on the Vatican to clean up its bank.
Steeped in decades of secrecy, the Vatican Bank has been under mounting pressure in recent years to clean up its act or face global financial instability.
On the one side are those seeking greater transparency, on the other are those seeking to preserve status quo and continue to operate under a blanket of secrecy.
The Vatican Bank and America’s banks have much in common – both have lost their way and now efforts are underway in Italy and in the U.S. to reign them in and clean them up.
The Vatican Bank was created in the 1940’s and was seen as a way to get money to Eastern Bloc countries to bring an end to Communism. Today, it’s said that the bank helps the Vatican operate in places such as Cuba. A noble beginning to be sure, but in recent years there have been allegations of money laundering and the disappearance of millions.
European agencies that monitor financial institutions are pushing for change much like lawmakers in the U.S.
In recent months, several lawmakers, including Massachusetts Senator Elizabeth Warren have sounded the alarm that tougher action against banks is needed.
“What does it take, how many billions of dollars do you have to launder from drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution,” Warren asked at a Banking Committee hearing.
And, this week comes word that the five banks that agreed to a $25 billion settlement to resolve fraudulent foreclosure claims attempted to hinder an investigation into their practices, according to a report released by the Department of Housing and Urban Development’s Inspector General’s office.
Over the years both the Vatican Bank and banks in the U.S. have lost their way. Now, finally, the people are saying enough.
In Italy, all eyes will be on Pope Francis to see if he is willing to pull off the veil of the secrecy surrounding that financial institution and clean up the corruption, while in the U.S. it will be up to our lawmakers to decide whether, as U.S. Attorney Eric Holder recently declared: “Banks in America are too big to fail,” or if they have what it takes to clean up the banking industry.