Pope Francis and the Second Coming of God's Bank - A Legacy of Leadership

Friday, 18 June 1982. As bankers walk into their offices across the City of London, phones are ringing off the hook. 62-year-old Roberto Calvi, CEO of Italy’s second largest bank, Banco Ambrosiano, which has recently gone spectacularly bankrupt, collapsing under $1.3 billion of debt, has been found hanging from the scaffolding under Blackfriars Bridge. Bricks and lumps of concrete have been recovered from his trouser pockets as well as from the pockets of his jacket, along with $13,000 in cash and an expensive watch on his wrist that stopped at 1.52 am.

Calvi is no ordinary man. He is God’s Banker, so monikered, for the Vatican Bank - officially the Institute for the Works of Religion (IOR), is Banco Ambrosiano’s largest shareholder. In his role as Italy’s best known private banker, Calvi has forged close ties with the Vatican Bank, whose clients include priests, bishops, cardinals and even the Pope. And now Calvi is dead, a victim, presumably, of the mafia that helped him become who he was.

The Vatican Bank Scandal: From Shadows to Scrutiny

If the world of finance is a high-stakes elite sport, then the Vatican Bank has been its most enigmatic and controversial player. Founded in 1942 with the stated aim of managing money on behalf of the Catholic Church, its main purpose was to ‘provide for the safekeeping and administration of movable and immovable property transferred or entrusted to it by physical or juridical persons and intended for works of religion or charity.’ Its operations, much like those of the catholic church itself, has been shrouded in mystery.

Despite its saintly links, instead of being the epitome of propriety, maintaining the highest of moral standards in the way it conducts its business, for decades, the bank has been dogged by scandals like the shadowy dealings of Bank Ambrosiano and murder of its head, for which the Vatican Bank would eventually pay $250 million to its creditors, without admitting any wrongdoing.

As the new millennium dawned, the bank was again under investigation, this time for money laundering and failing to comply with anti-money-laundering regulations. In 2010, Italian authorities seized $30 million from Vatican accounts, and the bank’s president, Ettore Gotti Tedeschi, was ousted amid allegations of financial mismanagement and internal power struggles.

In 2012, the drama reached new heights with Vatileaks. Leaked documents exposed corruption, inflated contracts, and even bribes for papal audiences. The fallout, and subsequent arrests and convictions of some of his closest aides, arguably contributed to the unprecedented resignation of Pope Benedict XVI in 2013, the first papal resignation in 700 years.

In short, the bank’s list of improprieties over the course of its existence forms a collection of tales that would make even the most seasoned Wall Street operator blush - Mafia ties, mysterious deaths, suitcases stuffed with cash, and a cast of characters that could fill a Dan Brown novel.

But over the last decade, under the determined stewardship of Pope Francis who was laid to rest over the weekend, the Vatican Bank has undergone a transformation as dramatic as any underdog comeback in sporting lore.

Enter Pope Francis: The Reformer

When Jorge Mario Bergoglio became Pope Francis in 2013, he inherited not just a spiritual institution, but a financial mess that would test even the most astute business leader. Francis approached the Vatican’s finances with the discipline of a turnaround CEO. He slashed costs, demanded transparency, and brought in outside experts to replace the insular cadre of clergy who had long controlled the purse strings. The new Pope was clear that for his spiritual message to be credible, Vatican’s finances had to be credible as well.

One of his first moves was to appoint a new board of supervisors and an auditor general, including seasoned financiers like Jean-Baptiste de Franssu, formerly CEO of Invesco Europe. He consolidated financial oversight under the newly created Secretariat for the Economy, led by professionals with real-world experience, and enlisted global firms like KPMG, EY, and Deloitte to audit the Vatican’s books.

The new Pope's reforms were sweeping:

·      Thousands of dormant and suspicious accounts were closed.

·      The bank’s clientele was restricted to Catholic institutions, clergy, Vatican employees, and diplomats.

·      KYC rules and anti-money laundering protocols were instituted, ending the era of anonymous numbered accounts.

·      For the first time, the Vatican Bank began publishing annual reports, opening its books to the world.

In 2022, Pope Francis issued a directive requiring all Vatican departments to transfer their assets to the Vatican Bank, centralizing control and reducing the risk of off-the-books dealings. He also updated transparency laws in line with European Union anti-money-laundering directives, further tightening oversight.

Results of Pope Francis’ Leadership and Road Ahead for God’s Bank

When an elite sport’s team falls far from the high-performance standards it is expected to sustain, the climb back up the proverbial mountain of success is hard. So, it will be for the Vatican Bank.

Critics argue that Pope Francis’ reforms, while significant, have not gone far enough. The Vatican still faces chronic budget deficits, an underfunded pension system, and lingering skepticism about its financial transparency. Internal resistance from the Curia - the Vatican’s powerful bureaucracy, remains a formidable obstacle, with some officials even attempting to block external audits.

Notwithstanding these issues, signs are encouraging. Reports of suspicious financial activity at the Vatican fell by a third in 2024, and the Vatican Bank now follows international banking standards. The bank’s profits have rebounded, and its Tier 1 capital ratio has improved. Moneyval, the European financial watchdog, commended the Vatican for its progress and scheduled its next review for 2028 in a sign of growing confidence in the reforms. 

As of 2025, the Vatican Bank is a leaner, more accountable institution. Its assets, now around $6 billion, are managed with an emphasis on ethical investing and support for the Church’s mission. The reforms have brought the bank “from the shadows to the realm of mainstream banking,” as Martijn Cremers, professor of finance at the University of Notre Dame, put it. But the next Pope will inherit a system still wrestling with the legacy of its past. It is a reminder that in both sports and finance, victory is never permanent, and vigilance is always required.

While the road ahead is a long and arduous one, Pope Francis leaves a legacy of leadership that resonates well beyond the faith of 1.4 billion Catholics in the Holy See.   The Vatican Bank’s journey from scandal to reform under Pope Francis, is a story of resilience, leadership, and the ongoing battle between tradition and transparency.

Like any great team rebuilding after losing their way, The Vatican Bank has shown that change is possible, but only if the will to win is matched by the courage to confront uncomfortable truths. It is blessed that in Pope Francis it found a leader with the vision, strategic acumen, mental strength and the belief in ethics and integrity that must underline a sustainably high performing team.

The church and the world have bid goodbye to a truly good leader. May his legacy live on.