Pope shakes up Vatican financial panel

Pope Francis has sacked the five-man board of the Vatican's financial watchdog.

Pope Francis. Picture:AFP.

VATICAN CITY - Pope Francis sacked the five-man board of the Vatican's financial watchdog on Thursday in the latest move to break with an old guard associated with a murky past under his predecessor.

The Vatican said the pope named four experts from Switzerland, Singapore, the United States and Italy to replace them on the board of the Financial Information Authority (AIF), the Holy See's internal regulatory office. The new board includes a woman for the first time.

All five outgoing members were Italians who had been expected to serve five-year terms ending in 2016 and were laymen associated with the Vatican's discredited financial old guard.

Reformers inside the Vatican had been pushing for the pope, who has already taken a series of steps to clean up Vatican finances, to appoint professionals with an international background to work with Rene Bruelhart, a Swiss lawyer who heads the AIF and who has been pushing for change.

Francis, who was elected in March 2013 after the resignation of former Pope Benedict, in February set up a new Secretariat for the Economy reporting directly to him and appointed an outsider, Australian Cardinal George Pell, to head it.

In January he removed Cardinal Attilio Nicora, a prelate who played a senior role in Vatican finances for more than a decade, as president of the AIF and replaced him with an archbishop with a track record of reform within the Vatican bureaucracy.

He also replaced four of the five cardinals in the commission that supervises the Vatican's troubled bank, known as the Institute for Works of Religion (IOR).

Since the arrival of Bruelhart in 2012, the AIF has been spearheading reforms to bring the Vatican in line with international standards on financial transparency and money laundering. But Vatican sources say he has encountered resistance from an old, entrenched guard.

Francis, who has said Vatican finances must be transparent in order for the Church to have credibility, decided against closing the IOR on condition that reforms, including closing accounts by people not entitled to have them, continued.

Only Vatican employees, religious institutions, orders of priests and nuns and Catholic charities are allowed to have accounts at the bank. But investigators have found that a number were being used by outsiders or that legitimate account holders were handling money for third parties.

Monsignor Nunzio Scarano, a former senior Vatican accountant who had close ties to the IOR, is currently on trial accused of plotting to smuggle millions of dollars into Italy from Switzerland in a scheme to help rich friends avoid taxes.