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Pope Francis brings Vatican Bank "kicking and screaming" into 21st century

Saint Peter's Square in Vatican and aerial view of the city.
Shilov356 | Getty Images
Saint Peter's Square in Vatican and aerial view of the city.

Pope Francis is known for his fiery criticism of "unfettered capitalism" and belief that the free markets contribute to a "throwaway society."

But has the Pope come to embrace capitalism, at least when it comes to dealings with the Vatican Bank?

Wednesday on CNBC's "Power Lunch," noted historian and Pulitzer finalist, Gerald Posner, said Pope Francis is actually bringing the Roman Catholic church's finances "kicking and screaming" into the 21st century.

According to Posner, author of "Gods Banker: A History of Money and Power at the Vatican," Pope Francis has taken bold steps to make the bank much more transparent and on par with international banking standards.

"At one point in the 1980s the bank was run by a set of priests who essentially were practicing standards worse than what Enron was using," said Posner. "It's had a bad history, so Pope Francis had no choice but to reform it, no question."

So what is the Vatican bank?

Officially called the Institute for the Works of Religion, the Vatican Bank is a privately held firm run by a CEO who reports to a committee of cardinals and the Pope. It has about 33,000 accounts, a distribution network in more than 100 countries, and an estimated $8 billion in assets.

Another reason the Vatican is mending its secretive ways, Posner said, is because it signed a monetary pact to use the euro and accept jurisdiction from outside authorities.

"In order to do that, Brussels and the European Union come in to inspects the bank. So for the first time, the Vatican passed laws against money laundering and the financing of terrorism."

As for the future of the Vatican Bank, Posner said "I am cautiously bullish it may in fact end up being a clean-run central bank."

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