Vatican says bank needs "corrective measures"

VATICAN CITY - The Vatican's financial watchdog agency said Monday that "corrective measures" were necessary at the Holy See's troubled bank to continue the path toward financial transparency and compliance with international norms.

Financial Intelligence Authority Director Rene Bruelhart said a long-awaited investigation of the bank, officially called Institute for Religious Works, included looking into its practice of not disclosing the names of the true account holders in its transactions with Italian banks.

He said the main problems identified in the inspection, which has been called for by European anti-money laundering evaluators, concerned the bank's procedures for identifying high-risk activities, and that more detail was necessary.

Bruelhart spoke to reporters Monday after his authority's annual report showed a spike in the number of suspicious financial transactions being reported: 202 in 2013 compared with only six a year earlier and just one in 2011. Five of those 202 were referred to Vatican prosecutors for possible investigation.

Bruelhart stressed that the spike didn't mean that more illicit activity took place last year, just that new laws and procedures put in place in 2013 were working to flag potentially problematic transactions.

The majority of the 202 new cases stemmed from transactions at the Vatican bank, which is reviewing each of its accounts to make sure it is clean and that the bank has complete information on the client.

"We are not perfect yet. We are not super-good yet. I think we are on the right track," Bruelhart said of the process. "But there is still quite a bit of way" to go.