God’s Bankers | Gerald Posner

Summary of: God’s Bankers: A History of Money and Power at the Vatican
By: Gerald Posner


Delve into the fascinating and often controversial financial history of the Vatican in Gerald Posner’s ‘God’s Bankers: A History of Money and Power at the Vatican’. This book explores the intricate financial dealings, political alliances, and investment strategies that have shaped the Roman Catholic Church’s wealth and power throughout history. Key highlights include the Church’s financial relationship with fascist governments, its murky involvement in Mafia money-laundering, and the impact of the euro on Vatican finances. The summary unravels this complex web of connections to provide a captivating look at the unique financial world that lies within the walls of the Vatican.

The Vatican’s Controversial History

For over a millennium, popes were supreme leaders of the Roman Catholic Church and its unchallenged monarchs. The Church generated much of its income through the sale of indulgences, which funded the Sistine Chapel and St. Peter’s Cathedral in Rome. However, the Church lost much of its wealth during the 18th and 19th centuries as European countries began separating church and state. In 1871, the Italian Nationalists passed the Law of Papal Guarantees, granting the Pope and Vatican special privileges and tax breaks. The Church’s traditionalist stance against modern capitalism, free speech, democracy, and the separation of church and state persisted. The Vatican’s secretive financial methods became apparent in the early 20th century, with its primary moneyman investing heavily in the Bank of Rome as it expanded in British colony Egypt. World War I disrupted Church donations, and Pope Benedict XV invested in Austrian stocks and accepted secret donations from Germany while lobbying against Italy joining the Allies. Mixed signals contributed to the 1919 Paris Peace Conference excluding the Vatican.

The Vatican’s Complicated Ties

The Church’s relationship with Mussolini’s fascist government in 1929 led to the signing of the Lateran Pacts, which designated the Catholic Church as the sole Italian religion, provided financial compensation, and gave the Church control over 108.7 acres of land. This windfall made the Church very wealthy. The Pope remained silent during the Third Reich’s reign to protect the Church’s business interests, which yielded significant profits. The Church suffered during the Great Depression but rebounded by declaring a “Holy Year” to generate donations and pilgrimages. Vatican representatives and Fascist party members sat on the corporate boards of most large Italian companies, further cementing the Church’s financial power.

The Catholic Church’s Complicity in the Holocaust

The Catholic Church’s behavior during WWII was driven by self-preservation. The Church and the Nazis initially mistrusted each other, but soon developed a truce. In 1933, Cardinal Pacelli, who later became Pope Pius XII, signed the Reichskonkordat with the Nazis, guaranteeing tax breaks and the right to practice their faith for Catholics. In return, bishops had to give an oath of loyalty and special prayers to the Third Reich. Hitler intended to quash the Church like Mussolini, and the Nazis collected payroll tax on all Catholic Germans on the Vatican’s behalf. Many German priests assisted fascist authorities by submitting their church records to establish who was Jewish. While Pius XI tried to distance the Church from anti-Semitism, he died before he could draft the encyclical condemning the Holocaust. When Berlin’s Bishop tried to mobilize fellow bishops to condemn the deportation of Jews and warned they would be answerable before God for their silence, no one supported him. Pro-German Pius XII became Pope in 1939 but failed to combat the Holocaust. Thousands of Catholic clergy provided intelligence about the Holocaust as it happened.

Vatican’s Role in WWII

During WWII, the Vatican’s Institute for Works of Religion, also known as the Vatican Bank, operated as a neutral financial institution and had a unique advantage in Allied transactions. Bernardino Nogara, the bank’s creator, utilized this advantage and made questionable investments that included links to investors involved in companies that refused to honor Jewish-held life insurance policies and investments. The church’s obsession with fighting communism also led to the use of Vatican ratlines to help Nazi war criminals escape. The CIA used these ratlines too, giving them an additional layer of deniability.

Vatican’s Prioritization of Anti-Communism

After World War II, the Vatican, under Pius XII, actively fought against communism with the financial support of the US. The Pope even threatened to excommunicate anyone associated with communism. However, the Vatican’s lack of action against the Holocaust perpetrators seems contradictory to their stance against communism. Despite this, Pius XII’s policy of church involvement in politics against communism was revived by John Paul II. Additionally, through Nogara, the Vatican played a significant role in rebuilding Italy following the war.

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