Vatican Bank Looks to Shed Its Image as an Offshore Haven Nadia Shira Cohen for The New York Times "Our first pillar is transparency," said Ernst von Freyberg, appointed Vatican Bank's president by Pope Benedict XVI in February. VATICAN CITY - From the cheerful ease with which the newly minted president of the Vatican Bank fielded questions on a recent morning, it could be easy to forget how the bank has long been a mystery wrapped in an enigma, tangled up in some of the most opaque scandals in Italy. "Our mission is to serve and shine," the bank's president, Ernst von Freyberg, said with a smile. Our first pillar is transparency. He spoke from an office in the medieval tower that houses the bank inside the Vatican, beneath a painting depicting the Gospel lesson, "Render under Caesar, what is Caesar's, and to God, what is God's." Appointed in February by Pope Benedict XVI in one of his last acts before retiring, Mr. von Freyberg, 54, a German aristocrat, industrialist and Roman Catholic with a friendly manner and a subtle sense of self-irony, will have a lot of shining to do. After the ouster of the previous president of the Vatican Bank, Ettore Gotti Tedeschi, in a boardroom coup last year, Mr. von Freyberg was brought in with the help of an outside headhunting firm - revolutionary by the standards of the insular Vatican - and is the bank's first non-Italian president since its founding in 1942. In recent years, the Vatican Bank has been under increasing pressure from European officials and the Bank of Italy to shed its reputation as an offshore haven and bring its practices in line with European norms to curb money-laundering and terrorist-financing as a condition for using the euro. Until it is deemed fully compliant, the Vatican will face higher costs and difficulties in finding banks to do business with it. In an hourlong interview, his first since assuming his post, Mr. von Freyberg said he intended to make the bank more transparent by setting up a Web site, issuing an annual report and having more contact with the news media. Because of the Vatican Bank's reluctance to reveal its client list to outside scrutiny, rumors have long swirled about whether it was holding slush funds for Italian politicians or money linked to organized crime. Mr. von Freyberg said that the Vatican Bank had developed a bad reputation over the years, partly out of its own lack of communication with the outside world and partly out of what he called "slander" in the news media and an Italian tendency to look for conspiracy theories. "I can't comment on single clients," he said, "but I can tell you that I have taken all the names I have found in the newspapers and looked them up myself. I didn't find a single one of these names. This Mafia boss, this politician, Osama bin Laden. None of them have accounts here, nor are they delegates to accounts. "Perception and reality are not identical here," he said. However, the reality is that the perception is what it is, so we need to address that. Mr. von Freyberg said the bank had stepped up its reporting of suspicious transactions, and flagged six last year - not a huge number, but a jump from just two since it set up an internal watchdog in 2010. Of the six, two were sent to Vatican prosecutors for further investigation. "This year we are discussing seven," he said, and that is only through May. He declined to discuss details, saying only that the bank was "systematically suspicious of cash movements of a certain size and of recipients of funds, of individuals." Last July, a report by Moneyval, a monitoring agency under the Council of Europe, said that the Vatican had made progress but still lagged in meeting international compliance standards. Mr. von Freyberg said he had not met internal resistance in his efforts to scrutinize the books. "I cannot speak of any resistance whatsoever," he said. Some veteran Vatican watchers wonder if the Vatican Bank's newfound openness is more about public relations than actual change. "In my view, up to now it's just a facade," said Carlo Marroni, a Vatican expert with the Italian financial daily Il Sole 24 Ore.