Pope Francis has appointed a former European fund manager to lead the Vatican's bank as part of its efforts to rid the Catholic Church of murky financial operations and focus on the institution’s asset management business.
“Our ambition is to become something of a model in financial management rather than a cause for occasional scandal,” said Cardinal George Pell, who was recently appointed head of the Vatican economy.
Jean-Baptiste de Franssu, formerly chief of Invesco’s European business and a 20-year asset management veteran, will replace Ernst von Freyberg and take over the Institute for Religious Works (IOR)—better known as the Vatican Bank—as president.
“It’s an honour to have been called to implement the changes that are now required to further transform the IOR into a dedicated service provider for the Church,” de Franssu said on the Vatican radio station Wednesday.
"Our ambition is to become something of a model in financial management rather than a cause for occasional scandal,” said Cardinal George Pell.
Under his tenure, the IOR said it would gradually shift its €6 billion ($8.2 billion) of assets to a newly created Vatican Asset Management office, downsizing the scandal-ridden bank.
According to the Vatican’s reports, IOR profit fell to €2.87 million ($3.9 million) from €86.6 million ($117 million) last year due to write-downs on legacy investments and weaker gold prices.
It will also pursue greater transparency in its finances, the Vatican said, including its pension system.
“The [Vatican’s Council for the Economy] recognized and acknowledged that the pensions being paid today and for the next generation are safe but the fund needs to ensure there are sufficient funds for future generations in a changing environment,” the Vatican said in a statement. “It is anticipated that new statutes would be prepared by the end of 2014 to adapt the pension fund’s organization to the new economic-administrative structure of the Holy See.”
The appointment of de Franssu will bring about a fresh approach to managing assets and investments at the bank, the Vatican said, through a thorough review of its accounts. The 51-year old Frenchman will also lead a new IOR board, which includes former CFO of Deutsche Bank Clemens Boersig, Harvard Law professor Marry Ann Glendon, and Sir Michael Hintze, founder and CEO of CQS, one of Europe’s leading multi-strategy asset management firms.
“These changes… are considered essential to address identified weaknesses and risks while also creating a new platform for improved economic management in the future,” the Vatican said.