As Pope Leo XIV ascends to the papacy, he not only takes on the spiritual leadership of 1.4 billion Catholics worldwide but also inherits the daunting challenge of overseeing the Vatican’s troubled finances. His predecessor, Pope Francis, initiated significant reforms to tackle the Holy See’s long-standing economic woes, but much work remains to ensure financial stability.
The Vatican’s financial situation has been precarious for years, primarily relying on revenue from hospitals, museums, real estate holdings, and donations from the faithful. Despite these sources of income, the Holy See often finds itself running at a loss. In 2023, the Vatican reported a consolidated loss of nearly 70 million euros ($79 million) on revenues of 1.2 billion euros.
Financial mismanagement has plagued the Vatican for decades. One of the most infamous episodes occurred in 1982, when the Banco Ambrosiano, a bank majority-owned by the Vatican’s Institute for Works of Religion (IOR), collapsed amid accusations of money laundering. The scandal, which involved ties to the mafia, led to the mysterious death of the bank’s director, Roberto Calvi.
When Pope Francis assumed office in 2013, the Vatican was still grappling with these financial issues. In response, he introduced measures to clean up the Vatican’s financial practices, including the creation of a special secretariat for the economy. Under his leadership, the Vatican began implementing stricter regulations, clamping down on corruption, and enhancing financial transparency. These efforts led to the closure of nearly 5,000 suspect bank accounts and improved the Vatican’s reputation internationally.
However, financial troubles persist. The Vatican continues to face a decline in donations, rising staff costs, and an underfunded pension system, which Francis warned could threaten future obligations. Leo XIV’s leadership will be critical in continuing these reforms and restoring fiscal stability to the Holy See, navigating both external resistance and internal challenges along the way.
