Vatican bank safe from crisis, bank president says

Vatican City, Oct 14, 2008 / 23:37 pm

The President of the Vatican bank Angelo Caloia has stated that its deposits are safe from the global financial crisis.

Speaking in an interview released Monday by Famiglia Cristiana magazine, Caloia said that the bank only makes safe investments.

"Our assets are solid and we have no lack of liquidity,” he said.

Caloia is president of the supervisory council of the Institute for the Works of Religion, the bank’s official name. Its depositors are religious orders, dioceses, Catholic charities, other religious organizations, and the Vatican itself.

In his interview he said that the bank avoided derivatives, the financial instruments blamed for many of the severe losses. He added that the bank makes no loans and therefore “we have no uncollectable losses.”

Caloia, an Italian economist and banker, took charge of the bank in the 1980s after the collapse of Banco Ambrosiano, of which the Vatican Bank was the main shareholder. The collapse resulted in one of Italy’s largest fraud cases, the Associated Press reports.

While the Vatican denied any wrongdoing, it agreed to pay $250 million to Ambrosiano’s creditors.

Reportedly 80 percent of Vatican investments are in low-yield government bonds and 20 percent are in stocks.

In its annual financial statement in July, the Vatican listed a 2007 deficit of about $14 million, reporting the weakening of the dollar had affected the worth of its many contributions from the United States.