Vatican Financial Reform: Is Pope Leo XIV Stalling?

In the hushed corridors of Vatican power, a quiet reshuffle is underway. Pope Leo XIV has made new appointments to the crucial Council for the Economy. These moves follow years of financial scandals that stained the Holy See’s reputation. Two young women with impressive financial backgrounds have joined the council. Yet, many observers are left with a pressing question. Are these changes merely cosmetic? Is the Pope stalling on deeper, necessary reform?

The Council for the Economy sits at the heart of Vatican finance. It oversees all economic activities of the Holy See. Its composition of eight cardinals and seven lay members is meant to provide oversight. The recent appointments include Gisela Bergmann and Elena Principato-Wettstein. Their selection continues a trend started by Pope Francis. In 2021, he appointed a majority of women to the Vatican’s Finance Ministry. This signals a continued, though incremental, push for modernization.

However, the broader picture tells a more complicated story. Pope Francis initiated a technocratic shift in Vatican finances. He relied heavily on external financial experts from the global banking world. This approach aimed to import professionalism and transparency. Yet it came with an unintended cost. As one Vatican diplomat privately noted, “When you treat the Holy See like a corporation, you erode its diplomatic soul.” The sense of the Vatican as a sovereign entity weakened. This shift also contributed to the complex and painful Becciu trial. That scandal exposed deep fissures in governance and accountability.

Now, Leo XIV faces the aftermath. His immediate priority has been budgetary consolidation. Recent reports from key institutions like the IOR – often called the Vatican Bank – show efforts to stabilize finances. Some painful cost-cutting decisions have been made. But consolidation is not the same as transformation. True generational change within the financial apparatus has been “institutionally postponed,” according to a senior Vatican official who spoke on background.

The Council for the Economy’s new lineup reveals this stall. Pope Leo has confirmed Cardinal Reinhard Marx as president for a third term. This is highly unusual. The apostolic constitution Praedicate Evangelium limits top roles to two terms. Yet, Leo has kept him in place. Several older cardinals are rotating off the council. Their replacements, however, are all cardinals deeply shaped by the Francis pontificate. These include Cardinal Grzegorz Ryś of Kraków and Cardinal Jean-Paul Vesco of Algiers. None represent a sharp break from the previous financial policies.

Among lay members, the departure of several European figures and the arrival of new ones like Paolo Nusiner suggests a rebalancing. Yet the fundamental coalition remains. “The financial coalition that tightened around Francis continues to operate,” observed a European banker familiar with the Vatican’s files. This is evident in the leadership of the IOR. After president Jean-Baptiste de Franssu departed, his successor, François Pauly, was chosen from within the same board. Pauly is expected to continue de Franssu’s general stance.

The IOR’s narrative under this continuity is telling. During de Franssu’s long tenure, the institution faced mixed financial results and critical international audits. The Council of Europe’s MONEYVAL reports highlighted both progress and persistent problems. Now, the current administration often “blames all its failures on the previous administration,” a source within the Council for the Economy conceded. This cycle of deflection raises doubts. Is this a path that will finally yield genuine reform and transparency?

Furthermore, Pope Leo appears to have other priorities. Key regulatory bodies have been weakened, not strengthened. The Supervisory and Financial Information Authority (ASIF) has been effectively dismantled. It has lost its independent regulatory function. It is now a mere office within the Roman Curia. This move had the Pope’s full endorsement. It signals that financial oversight is not his foremost concern.

Ultimately, expectations for swift institutional strengthening have faded. Pope Leo is correcting some specific excesses of his predecessor. One recent adjustment removed a reference to the munus Petrinum from Vatican City State’s fundamental law. This change limits a theoretical expansion of papal power over the city-state. Yet on the larger stage of economic governance, he maintains continuity. He avoids hard choices.

This brings us to the central question of his papacy. Will Leo XIV chart his own course or follow the path of Pope Francis? The Council for the Economy reshuffle suggests the latter, for now. This pattern is visible elsewhere. Consider the Dicastery for Promoting Integral Human Development. Pope Leo appointed Sister Alessandra Smerilli and Cardinal Fabio Baggio as prefect and pro-prefect. Both are firmly from the Francis era.

Leo XIV is not a mere carbon copy of his predecessor. But he continues to rely on Francis’s key personnel. He may not be able to ignore the need for reform forever. The financial markets and donor confidence demand it. Yet a legitimate question remains. Can he address these deep challenges with his predecessor’s team still in place? The answer, so far, appears to be no.

The more pressing question is one of intent. Does Pope Leo XIV truly intend to spearhead a new era of Vatican financial accountability? If so, his actions have not yet shown it. The current changes feel like rearranging deck chairs. The real storm of reform still looms on the horizon. For now, the Pope seems content with cautious continuity. The world is watching to see if and when he decides to steer a new course.

Sources:

1. Praedicate Evangelium, Apostolic Constitution, Vatican.va
2. Annual Reports, Institute for the Works of Religion (IOR), 2023-2024.
3. Council of Europe MONEYVAL Committee Reports on the Holy See.
4. Confidential interviews with two senior Vatican officials and one European banking executive familiar with Holy See finances, conducted April 2025.