In an effort to shed a decades-long image of secrecy and suspicion, the Vatican bank has been investing heavily in building a new image of transparency and legality.But recent scandals, such as the May 24 ouster of the bank's president, Ettore Gotti Tedeschi, for incompetence, and leaked Vatican documents hinting of financial mismanagement within the walls of the Vatican have only made that mission more urgent.
In a rare show of PR savvy, the Vatican bank, known formally as the Institute for the Works of Religion, has been opening its alarm-triggered doors -- giving bishops and ambassadors, and now, journalists, a detailed rundown of how the bank works.
"We are trying to open the treasure chest up a bit and show we are working for transparency," said Paolo Cipriani, the bank's director since 2003.
In late June, the bank hosted some 60 journalists accredited by the Vatican for a two-hour-plus PowerPoint presentation describing the mission of this unique financial institution and what it has been doing to try to comply with international banking and anti-money-laundering standards.
It also included a brief tour of part of the bank, which is decorated with museum cases displaying gold commemorative coins and large accounting ledgers from the early 1900s.
The Institute for the Works of Religion was formally established in 1942, but it has its roots in an administrative body that was started by Pope Leo XIII in 1887 to support the work of the Catholic Church.
In fact, Vatican bank officials object to the institute being called a bank, since it's not considered a commercial enterprise intent on generating capital.
On the outside, it certainly doesn't seem like a bank: It is housed in a 15th-century tower that used to be a prison and has stone walls that are 30-40 feet thick.
However, inside it looks like a bank with its marble floors, vaulted ceiling, large counters staffed with well-dressed tellers peering at computer monitors, an ATM machine in the entryway and high-security doors to the street that can block a thief from escape. It also provides a limited array of banking services.
But Vatican officials say it is not a bank because it is not a lending institution; its aim is not to make money but to further the mission of the universal church.
The mission of the institute, Cipriani said, "is to safeguard and administer" assets belonging to account holders in more than 150 countries.
It handles about 6 billion euros ($7.4 billion) in assets spread out among 33,000 accounts. More than three-quarters of all account holders are in Europe, presumably Italy, while just 7.3 percent of accounts -- the next highest percentage -- are at the Vatican.
Its goal with investments is to safeguard capital, not pull a profit, so it is "never speculative," Cipriani said.
It chooses very conservative low-risk portfolios that avoid entities tied to activities deemed unethical by the Catholic Church, such as child exploitation, arms manufacturing and producing abortifacient pharmaceuticals. Investments are mostly in bonds and only 5 percent are in the stock market, he said.
Not everyone can open a Vatican bank account, and clients must meet a series of strict criteria. Account holders go through rigorous background checks that get reviewed periodically to make sure their status is still valid, Cipriani explained.
A diocese or religious order could also open an account to support a member studying in Rome or to support a church project anywhere in the world, he said.
The bank has no numbered or secret accounts and no relationship with off-shore banks or countries, Cipriani said, calling such claims "a myth" he hopes to "shoot down once and for all."
It also runs the names of all senders and receivers of funds through a global database, called World-Check, which "in 20 seconds," he said, can flag people or organizations suspected of fraud, criminal activity or other risks.
"We have to remove the veil, the shadow of the past and do our utmost" to provide transparency and reliable service, he said.
In addition to internal controls and audits, the bank uses the accounting and consulting firm Deloitte to certify its balance sheets, monitor compliance with new Vatican norms and establish the best international banking standards, he said.
The June 28 visit with journalists came less than a week before the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism -- Moneyval -- was scheduled to discuss the Vatican's progress in meeting standards of financial transparency.
The Vatican enacted new stricter norms in 2010 as part of its broader efforts to make Moneyval's so-called White List of countries who reach a set of standards of anti-money laundering and financing of terrorism.
The meeting with journalists also came a day after the bank's supervisory board of lay experts met with an oversight commission of cardinals to talk about the qualifications they want in a new president for the bank.
Carl A. Anderson, head of the U.S.-based Knights of Columbus and secretary of the Vatican bank's board of supervisors, has said the bank is fully committed to transparency and to bringing all of its procedures into line with international banking norms.
Firing Gotti Tedeschi, who was never mentioned once during the briefing with journalists, was part of the bank's commitment to promoting transparency, Anderson has said.
The bank obviously sees its more public outreach and commitment to highly professional staff as important ways to reach the gold standard of international banking standards.