Vatican joins European banking system

AP: 

The Vatican has made more progress in its path to greater financial transparency by securing approval to join the European banking system that harmonises electronic payments across the continent.

With the endorsement of the European Council, the Vatican City State and Holy See are now included in the Single Euro Payments Area, known as SEPA. That allows the Vatican bank to have its own IBAN code — the unique numerical identifier that facilitates wire transfers between banks.

For the religious orders, Vatican embassies, employees and diplomats who are clients of the Vatican's Institute for Religious Works and have weathered years of scandal and reform, the development means faster and cheaper transactions.

The approval by the European Payments Council to bring the Vatican into the SEPA zone, announced Friday by the Vatican, amounts to something of a vote of confidence by a Europe that has long been suspicious of the Holy See's murky finances and its reputation as an offshore tax haven.

Tommaso Di Ruzza, director of the Vatican's financial watchdog agency, said the Vatican's entrance into SEPA was "a step forward" that consolidates progress made over the past several years.

The bank, known by its acronym IOR, had been the source of embarrassment for the Catholic Church, most significantly due to its role a quarter-century ago in the spectacular collapse of an Italian bank.

Pope Benedict XVI launched a process in 2009 to clean it up and bring it into compliance with international norms to fight money laundering and terrorist financing, a process that has resulted in the closure of thousands of accounts.