Some might believe that the 79-year-old pontiff has taken his time, since a year and a half has passed since he succeeded John Paul II. However, by the standards of the Vatican, which thinks in centuries, the German-born Pope has moved relatively swiftly, aware that he will not have as much time to craft his legacy as his predecessor.

The process began on Friday with the replacement of Cardinal Angelo Sodano, the long-serving Secretary of State (papal Prime Minister) by Cardinal Tarcisio Bertone, Archbishop of Genoa and formerly No 2 to Cardinal Joseph Ratzinger, as Pope Benedict was known then, at the Congregation for the Doctrine of the Faith.

If doctrine and theology are close to the Pope’s heart, so is organisational efficiency. He is said to relish a remark made by Pope John XXIII (1958-63), who, when asked how many people worked in the Vatican, replied: “About half.” The target of Benedict’s strategy is the Vatican Bank, properly called the Institute for Religious Works (IOR). Angelo Caloia, an Italian Catholic banker who is its long-serving governor, was provisionally reappointed this year, but the Pope has yet to confirm this. He may be replaced.

Also in his sights are the two other main arms of Vatican finance: the Prefecture for the Economic Affairs of the Holy See, headed by Cardinal Sergio Sebastiani; and the Administration for the Patrimony of the Apostolic See (APSA), under Cardinal Attilio Nicora.

For many the term “Vatican Bank” evokes memories of scandals involving Mafia financiers and money-laundering that Signor Caloia was brought in to clean up. The most notorious case involved the collapse of the Banco Ambrosiano, a Roman Catholic bank headed by Roberto Calvi, who was found hanging under Blackfriars Bridge in 1982. Calvi’s death was ruled a suicide, but the case was reopened as a murder investigation.

Signor Caloia replaced Archbishop Paul Marcinkus, an American, who had presided over lax if not illegal financial dealings. He was sent back to the United States as a parish priest and died in disgrace.

By contrast, Signor Caloia is respected for his discretion and rectitude, but he is identified with the previous regime and the succession battle to be the new “God’s Banker” is on. Almost unnoticed, the Pope has moved to end the Caloia era, removing Lelio Scaletti, Signor Caloia’s right-hand man as director-general of the Vatican Bank, as well as other, lower-level officials.

Vatican finances may be cleaner, but they remain secretive, complex and less than transparent, with revenues lumped together under broad headings and little breakdown of balance sheets. Nothing annoys this pontiff more than bureaucratic duplication and there are rumours in the Vatican that the bank, APSA and the economic affairs prefecture may be streamlined or merged.

The cardinals in charge argue that Vatican finances are healthy, with the Holy See in the black after a series of annual deficits. This summer Cardinal Sebastiani said that, despite expenses of €7 million arising from the funeral of John Paul II and the transition to Pope Benedict, the Vatican closed its 2005 budget with a surplus of nearly €10 million.

According to Paolo Trombetta, the chief Vatican accountant, the millions of visitors who came to Rome for the transition — and who continue to flood in, not least from Germany — had a positive impact on the sales of Vatican stamps, coins, books and other souvenirs, offsetting papal transition expenses such as extra security and the bonuses traditionally given to Vatican employees to mark a papal death and election. The Vatican has also realised, belatedly, that it has marketable assets in the Pope, papal insignia and the rich art treasures of the Vatican Museums and is levying copyright fees on the Pope’s publications and the use of images from its Renaissance art collections. Noting that the Vatican Publishing House ended 2005 with a surplus of €934,000, Cardinal Sebastiani said that it “has been entrusted with the guardianship of the copyright of all the documents by means of which the Supreme Pontiff exercises his teaching”.

Vatican accountants can also point to profit in in 2005 in the Holy See’s investment sector of $55 million, up from $7.7 million in 2004. Improved exchange rates and higher interest rates have given the Vatican its healthiest bottom line for eight years, Cardinal Sebastiani says. Earnings on the Vatican’s 30 buildings and 1,700 apartments in Rome produced additional revenue of $65 million.

Vatican City, one of the world’s smallest sovereign states, which costs $250 million a year to run, closed with a surplus of €30 million. Yet hidden in the figures is the knowledge that donations to the Vatican from dioceses, religious orders and foundations around the world have dropped below $100 million, a reflection of the crisis of faith in the Western world that Pope Benedict has made it his task to reverse. Donations from Catholics in his native Germany have held up, but those from wealthy American dioceses, such as Los Angeles, Boston and Chicago, declined in the wake of the scandals in the US over sexual abuse by clergy, with the Boston archdiocese even forced to sell its episcopal palace to pay for legal settlements to victims of abuse and their families.

Times Recommends

• Darling under pressure on record public debt
• Mortgage drought deepens on 32% lending fall
• Oil prices firm after 10% drop to below $130