The Vatican named a new head and board for its scandal-plagued bank Wednesday, capping a cleanup campaign overseen by Pope Francis that has seen hundreds of suspect accounts shut down.
French financier Jean-Baptiste de Franssu, who called his new job "a mission," will oversee a two-year program to cede the bank’s asset-management business to a newly formed Vatican department, leaving the institution handling only payment services for priests and religious organizations.
The change will turn the Institute of Religious Works, as the bank is formally known, into a simple retail bank, in keeping with Francis' dislike of the trappings of high finance.
"Our ambition is to become something of a model for financial management rather than cause for occasional scandal," said Cardinal George Pell, the prefect of the Vatican’s new secretariat for the economy.
De Franssu replaces part-time head Ernst von Freyberg, a German industrialist who was appointed to the position last year and who blocked the accounts of more than 2,000 individual and institutional clients with incomplete customer profiles.
Von Freyberg also terminated about 3,000 "customer relationships," many involving dormant accounts, and axed 396 accounts that did not conform to the bank's new policy of accepting only priests, Roman Catholic institutions, Vatican staff and embassies at the Holy See as customers. An additional 359 accounts are slated for closure.
Pell said the Vatican owed Von Freyberg "an enormous debt" for his work at the bank, which has long been a suspected haven for money launderers and tax dodgers.
In results released Tuesday, the bank said its profit plunged to $4 million in 2013 from $118 million the year before as a result of write-downs on investments made by the previous management and fees paid to consultants who pored through accounts looking for suspicious activity.
On Wednesday, Pell said that a questionable loan allegedly made to an Italian television company and authorized by former Vatican Secretary of State Tarcisio Bertone would be "properly investigated."
The new six-person board of lay experts appointed Wednesday to work with De Franssu includes Mary Ann Glendon, a Harvard law professor and former U.S. ambassador to the Vatican.
The shake-up at the bank is part of a program of changes in the Vatican's finances planned by an economic council and a council of cardinals created by Francis.
Another scandal-hit department, the Administration of the Patrimony of the Holy See, or APSA, will hand over purchasing and human-resources work to Pell's Secretariat for the Economy, leaving it with the role of the Vatican's treasury. Last year, a senior department accountant, Father Nunzio Scarano, was arrested on suspicion of seeking to smuggle cash into Italy as part of a tax-dodging scam.
Pell's department will also oversee reductions in the Vatican's communications program, which are likely to include cuts at Vatican Radio in favor of a greater focus on social media, including the pope's extremely popular Twitter feed.
Pell said an "auditor general" would be appointed to "go anywhere and everywhere" at the Vatican. In a slip of the tongue, Pell, said the official would "enhance aspirations towards transcendency," before correcting himself to say "transparency."
Kington is a special correspondent.