God's Bankers

1. The Vatican's History is Intertwined with Secular Power and Financial Intrigue

Instead, God’s Bankers is about how money, and accumulating and fighting over it, has been a dominant theme in the history of the Catholic Church and often in shaping its divine mission.

From Donations to Empire. For over a millennium, the Catholic Church held vast secular power, ruling the Papal States and wielding influence over European monarchies. This temporal authority necessitated complex financial systems, evolving from simple donations and taxes to sophisticated methods of wealth accumulation. The Curia, the Vatican's administrative body, became a center of political intrigue, with clerics vying for power and control over the Church's vast resources.

The Papal States. The Papal States, controlled by the Church for over a thousand years, were the earthly symbol of the Church's power. This kingdom was the source of taxes and fees, but also a source of constant pressure to maintain the profligate lifestyle of one of Europe's grandest courts. The Popes believed that God had put them on earth to reign above all other worldly rulers.

A Classic Investigative Tale. The pursuit of money and power has been a recurring theme throughout the Church's history, shaping its divine mission and leading to stunning scandals. This history is not about faith or belief in God, but about the political intrigue and secretive inner workings of the world's largest religion. The story of God's Bankers is a classic investigative tale about the political intrigue and secretive inner workings of the world's largest religion.

2. Indulgences: A Controversial Source of Church Wealth and Power

The church found the money it needed in the selling of so-called indulgences, a sixth-century invention whereby the faithful paid for a piece of paper that promised that God would forgo any earthly punishment for the buyer’s sins.

Forgiveness for Sale. Indulgences, initially intended to remit earthly penances, evolved into a lucrative revenue stream for the Church. By the Renaissance, they were sold widely, promising forgiveness for sins and even reducing time in Purgatory. This practice became a major source of wealth, funding lavish lifestyles and grand projects like the Sistine Chapel.

From Pilgrimages to Mass Marketing. The Vatican set prices according to the severity of the sin and they were initially available only to those who made a pilgrimage to Rome. Over time, the Church liberalized the scope of indulgences, making them easier to obtain and applicable to souls in Purgatory. This transformation turned indulgences into a wildly popular commodity among ordinary Catholics.

Fueling the Reformation. The sale of indulgences became a point of contention, criticized by figures like Martin Luther and contributing to the Protestant Reformation. Despite the schism, the Church continued to rely on indulgences, highlighting the complex relationship between faith, power, and money. The licentious lifestyle of the Papal Court and the widespread abuses in selling indulgences became a rallying cry for Martin Luther and the Reformation.

3. The Rothschilds: Unwelcome Saviors of Papal Finances

By the time Gregory XVI, the son of a lawyer, became Pope in 1831, the situation was so dire that he felt compelled to do something remarkable: he borrowed money from the Rothschilds, Europe’s preeminent Jewish banking dynasty.

Turning to the "Christ-Killers." Facing financial ruin in the 19th century, the Church reluctantly turned to the Rothschilds, a Jewish banking family, for loans. This decision sparked controversy within the Vatican, with traditionalists decrying the reliance on "Christ-killers" for financial support. The Rothschilds, however, provided a lifeline, stabilizing the Church's finances and becoming its official bankers.

A Necessary Evil. Church leaders may not have liked the Rothschilds but they did like their cash. The Rothschilds had a solid reputation when it came to bailing out distressed governments. They had steadied Austria’s finances after the Napoleonic Wars and provided enough money to squash two rebellions in Sicily.

Clash of Cultures. The Rothschilds found the Vatican disorganized and chaotic, lacking basic financial practices. Despite their suggestions for reform, the Church resisted modernization, clinging to its traditional views on money and finance. This uneasy alliance highlighted the tension between the Church's spiritual mission and its earthly needs.

4. Antonelli's Financial Reforms and the Loss of the Papal States

Antonelli soon devised a plan to entirely bypass the Rothschilds: the church would sell interest-bearing debt directly to the faithful without using an investment bank.

A Controversial Figure. To reduce reliance on the Rothschilds, Pope Pius IX appointed Giacomo Antonelli as his Cardinal Secretary of State and chief of the Papal Treasury. Antonelli, though controversial, implemented ambitious reforms, including raising taxes and restructuring the Church's debt. He also sought to bypass the Rothschilds by selling interest-bearing debt directly to the faithful.

The End of an Era. The rise of Italian nationalism threatened the Church's control of the Papal States. Despite efforts to appease nationalists, Pius IX was forced to flee Rome, and the Papal States were eventually annexed by the unified Italian Republic. This loss of territory and income marked a turning point for the Church, forcing it to adapt to a new reality.

Peter's Pence. The loss of the Papal States led to the reinstitution of Peter's Pence, a fundraising practice that had been popular a thousand years earlier with the Saxons in England. It was a fundraising practice that had been popular a thousand years earlier with the Saxons in England (before Henry VIII had banned it). “Obolo di San Pietro” in Italian, “offerings from the faithful,” Peter’s Pence consisted not only of donations, but also of fees paid by loyal Catholics for services such as weddings, funerals, and confirmations.

5. Leo XIII's Embrace of Capitalism and the Rise of Ernesto Pacelli

By the start of the twentieth century, the Vatican had gone so far as to open forty-four small Catholic banks throughout Italy, all dedicated to providing Catholic workers a trusted place in which to deposit their earnings.

A New Pope, a New Approach. Pius IX's successor, Leo XIII, recognized the need for financial reform and cautiously embraced capitalism. He approved limited interest-bearing loans and invested in Roman property, benefiting from a building boom. This marked a shift from the Church's traditional condemnation of usury and its distrust of modern finance.

Pacelli's Influence. Ernesto Pacelli, a lay advisor, played a crucial role in shaping Leo XIII's financial policies. As president of the Bank of Rome, Pacelli advocated for investments in banks, construction firms, and utility companies, arguing that they benefited ordinary Catholics. He also acted as an unofficial mediator between the Vatican and the Italian state.

Reversal of Course. Despite initial progress, Leo XIII reversed course in his final years, becoming increasingly intolerant and reaffirming reactionary views. This highlights the ongoing tension between tradition and modernity within the Church. By the end of his Papacy, Leo was every bit as reactionary as Pius.

6. Pius X's Anti-Modernism and the Limits of Reform

“These people expect to be treated with oil, soap and embraces,” Pius said. “What they need—and what they will get—is a good fist.”

A Conservative Backlash. Pius X, known for his anti-modernist views, reversed some of Leo XIII's reforms and cracked down on those who challenged traditional Catholic dogma. He also attempted to streamline the Curia, but faced resistance from entrenched power brokers.

Limited Financial Modernization. Despite his conservatism, Pius X allowed for some modest investments in banks and essential industries. He also approved the sale of Vatican "bonds" to the faithful, demonstrating a pragmatic approach to the Church's finances.

The Pacelli Influence Wanes. The Pope had picked a bad time to test the limits of his secular power. Although the French had returned Pius to Rome, the nationalists had not abandoned their quest to unite Italy. A new wave of bloody insurrections kicked off across the peninsula in 1859. The resurgent instability caused distress inside St. Peter’s. Napoleon’s armies joined Sardinian militias in fighting Austrian troops and soon all of Italy was engulfed in civil war.

7. Benedict XV's Wartime Challenges and Financial Woes

The catastrophe created by the plunging revenues was exacerbated by Benedict, who turned out to be a spendthrift.

Navigating a World at War. Benedict XV faced immense challenges during World War I, including declining revenues and political turmoil. He attempted to mediate peace but was largely ignored by the warring nations. The war also exposed the Church's secret connections to the Central Powers, further damaging its reputation.

Financial Mismanagement. Benedict XV's spendthrift habits and poor financial decisions exacerbated the Church's financial woes. He made misguided investments in failing banks and Catholic dailies, further depleting the Vatican's resources.

A "Begging Mission." Desperate for funds, Benedict XV dispatched Monsignor Cerretti to America to plead for financial assistance. Although the U.S. bishops declined a loan, they arranged for a substantial gift from the Knights of Columbus, highlighting the Church's growing reliance on American Catholics.

8. Pius XI, Mussolini, and the Lateran Pacts: A Faustian Bargain

“Italy has been given back to God,” the Pope told the Vatican newspaper L’Osservatore Romano, “and God to Italy.”

The Rise of Fascism. Pius XI initially opposed fascism but later saw Mussolini as a means to restore order and protect the Church's interests. This led to the Lateran Pacts, a series of agreements that granted the Church significant power and financial compensation in exchange for recognizing the Italian state.

A Controversial Alliance. The Lateran Pacts were a watershed moment, restoring Papal sovereignty and granting the Church immense privilege. However, they also tied the Church to Mussolini's fascist regime, raising ethical questions about the Church's role in a totalitarian state.

The Price of Power. The Lateran Pacts converted Mussolini into a hero for devout Italians. Many homes soon had a picture of Il Duce hanging next to one of the Pope or a crucifix. The partnership between the Vatican and Mussolini was in full bloom.

9. Nogara's Financial Acumen and the Vatican's Modernization

He had passed away two years before Pius. It was only now that Leo learned of the grim consequences of the unfettered autonomy Cardinal Antonelli had wielded.

A Layman's Touch. Pius XI, recognizing the need for financial expertise, appointed Bernardino Nogara to manage the Church's wealth. Nogara, a devout Catholic with a background in engineering and international finance, brought a modern approach to the Vatican's investments.

Diversification and Innovation. Nogara diversified the Church's holdings, investing in real estate, banks, and various industries. He also utilized holding companies and arbitrage to maximize profits, transforming the Vatican into a sophisticated financial player.

Navigating the Depression. The Wall Street crash of 1929 and the ensuing Great Depression posed significant challenges. Nogara's cautious guidance and diversification strategies helped the Church weather the storm, solidifying his position as a trusted advisor.

10. Pius XII's Silence During the Holocaust: A Moral Reckoning

In the end, they are human, hobbled by the same frailties and shortcomings common to the rest of us.

An Unholy Alliance. The Vatican-Mussolini partnership was set against the backdrop of Italy’s flourishing alliance with Germany’s Third Reich, the so-called Rome-Berlin Axis. The church had good reason to monitor that political union. A third of Germans were Catholic. Despite the godless ideology promoted by Adolf Hitler’s National Socialist Party, the church realized it had to work with the Nazis if it meant safeguarding the rights of Catholics.

The Reichskonkordat. The Vatican saw in the Nazis the same fervent anticommunism that was an integral element of Mussolini’s fascism. Pius knew, however, that deciding how best to deal with Germany was not as simple as concluding that Hitler was less evil than Soviet dictator Joseph Stalin. The Vatican feared that Hitler was more passionate about his anticlerical rhetoric than was Mussolini.

A Moral Failure. Despite growing evidence of Nazi atrocities, Pius XII maintained a policy of silence, prioritizing the Church's interests over the plight of Jews and other persecuted groups. This silence remains a subject of intense debate, with critics arguing that it constituted a moral failure.

11. Post-War Ratlines: Aiding Fugitives and Entangling the Vatican

What did Calvi know that was so important that someone killed him and disguised it as an elaborate public suicide?

Aiding and Abetting. In the aftermath of World War II, the Vatican became entangled in the "ratlines," escape routes used by Nazi war criminals to flee Europe. Some clerics, motivated by anti-communism or sympathy for the fugitives, provided them with false documents and safe passage to South America.

The Role of Draganović. Krunoslav Draganović, a Croatian priest, played a key role in organizing the ratlines, using his position at the Vatican to assist Ustašan war criminals. This involvement further tarnished the Church's reputation and raised questions about its complicity in shielding perpetrators of atrocities.

A Complicated Legacy. The ratlines highlight the complex and morally ambiguous choices faced by the Church in the post-war era. While some clerics sought to protect those they believed were unjustly persecuted, their actions inadvertently aided those responsible for horrific crimes.

12. Pope Francis's Challenge: Reforming an Institution Steeped in Financial Scandal

Ultimately, Calvi’s murder is a prequel to understanding the modern-day scandals from St. Peter’s and fully appreciating the challenges faced by Pope Francis in trying to reform an institution in which money has so often been at the center of its most notorious scandals.

A Legacy of Scandal. The history of the Vatican Bank is marked by recurring scandals, from the Borgias to Roberto Calvi. These scandals underscore the challenges faced by Pope Francis in reforming an institution deeply entrenched in financial intrigue and power struggles.

The Need for Transparency. Pope Francis has recognized the need for greater transparency and accountability in the Vatican's finances. He has taken steps to reform the IOR, appointing new leadership and implementing stricter regulations.

A Long Road Ahead. Reforming the Vatican's finances is a complex and ongoing process. Pope Francis faces significant resistance from within the Curia, highlighting the enduring power of tradition and the challenges of changing an institution with centuries of history.

Last updated: August 21, 2025