Pope Names Former Invesco Manager for Vatican Bank in Revamp

By Andrew Frye
Bloomberg Businessweek
July 9, 2014

http://www.businessweek.com/news/2014-07-09/pope-names-former-invesco-manager-to-run-vatican-bank-in-revamp

Jean-Baptiste de Franssu, the former head of Invesco Ltd.’s European business, was named president of the Vatican Bank as Pope Francis continues his reorganization of the Catholic Church’s scandal-tainted financial operations.

Franssu replaces Ernst von Freyberg, who was appointed by Francis’s predecessor, Benedict XVI, at the head of the Institute for Religious Works, or IOR, as the bank is known.

“Excellent progress has been made through adherence to international standards,” according to a statement released by the Vatican. “A new anti-money-laundering framework has been put in place and every effort continues to be made to comply with this framework.”

The chairman of mergers-and-acquisitions adviser Incipit, Franssu was appointed by the pope earlier this year to the Vatican’s council that oversees economic issues.

Francis, 77, has replaced Vatican leadership in his 16 months as pontiff and made transforming the bank one of his top priorities. Franssu will lead a new board and management team at the bank. Cardinal-Prefect George Pell said yesterday that the bank needs new leaders to continue improving transparency and compliance.

“We are now in a position to move the IOR to a second phase of reform under new leadership,” Pell said yesterday in a statement.

The IOR was set up in 1942 to oversee deposits and execute transactions for clergy and church organizations worldwide. Three decades of scandals, from the Banco Ambrosiano failure in the 1980s to the freezing of 23 million euros by Italian prosecutors in 2010, have tarnished the IOR’s image and prompted Francis’s push for change.

“Our ambition is to become something of a model in financial management rather than a cause for occasional scandal,” Pell said at a news conference today.

IOR profit plunged last year and more than 2,000 accounts were blocked as von Freyberg, hired during Benedict’s last days as pope in February 2013, carried out the first steps in Francis’s plan to reshape the bank. Profit fell 97 percent to 2.9 million euros ($3.9 million) on writedowns and fluctuations in the value of gold reserves, the Vatican said yesterday.

Franssu joined Invesco in 1990 and served two years through June 2011 as president of the European Fund and Asset Management Association, according to a Vatican biography released in March.

To contact the reporter on this story: Andrew Frye in Rome at afrye@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Kevin Costelloe, Dan Liefgreen