Vatican financial watchdog signs accord with U.S. Treasury Department

Josephine McKenna

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In its latest bid to tackle corruption and increase transparency, the Vatican's financial watchdog has signed a bilateral accord to exchange information with its counterpart in the U.S.

On Monday, officials with the Financial Information Authority announced it endorsed the agreement with the Office of the Comptroller of the Currency, an independent body in the U.S. Treasury Department responsible for regulating and supervising domestic and foreign banks.

This is the latest example of the authority's efforts to build international cooperation and prevent a repeat of the corruption scandals that have engulfed the Vatican bank, known as the Institute for the Works of Religion.

"This is a further step in the Holy See's efforts towards perfecting a system of financial regulation and part of our commitment to transparency and international cooperation," said Rene Bruelhart, the Swiss-born director of the authority, known as AIF.

"The Holy See is part of the global family of well-regulated jurisdictions and the signing of this agreement reflects that very clearly."

Monday's announcement came less than a month after Pope Francis dismissed the five-man board of the financial watchdog in a controversial move that underscored his hard line on cleaning up Vatican finances.

Juan Zarate, a former senior Treasury official and counterterrorism expert, was the only American among the four new appointments but it is not clear what specific role he played in finalizing the agreement between the U.S. and the AIF.

The Vatican watchdog expects further agreements with financial supervisors and regulators around the world as it strengthens its own regulatory infrastructure in the fights against money laundering and the financing of terrorism.

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