Pope Francis and his orthodox reform approach sets a new tone for a Vatican beset by scandals by naming a veteran diplomat as secretary of state, a role often called the “deputy pope”.
Archobishop Pietro Parolin's appointment ends the era of Cardinal Tarcisio Bertone, who was widely blamed for failing to prevent ethical and financial scandals that marked the eight-year reign of former Pope Benedict, who resigned in February.
Parolin, a 58-year-old Italian who, like Francis, is known for his frugal lifestyle, is currently the Vatican's nuncio (ambassador) in Venezuela. The naming of a new secretary of state - who acts as the pope's prime minister and chief aide - is the most significant appointment by Francis since his election in March. Although he has no power to rule on doctrinal issues, the secretary of state sits in when the pope is ill.
He sets the tone for the Vatican's central administration, known as the Curia, and is involved in everything from finances and the appointment of bishops to diplomatic relations with more than 170 countries.
Bertone, 79, who was secretary of state for nearly Benedict’s entire pontificate, was accused of not keeping a close enough watch on the Curia, some of whose members have been accused of corruption and cronyism.
One of the most damaging scandals to hit the Vatican under Bertone was Vatileaks, when Benedict's butler stole documents alleging corruption from the pope's desk and leaked them to the media.
That coincided with tumult at the Vatican bank, which Italian magistrates are investigating on suspicion of money laundering.
The former president of the bank, Ettore Gotti Tedeschi, was close to Bertone. The board of the bank, officially known as the Institute for Works of Religion (IOR), ousted Gotti Tedeschi last year, saying he was incompetent. He says he was pushed out because he wanted the bank to be more transparent.
The appointment was the pope's fourth move to overhaul the Vatican's central administration.
A month after his election, he set up an advisory board of eight cardinals to help him govern the 1.2 billion-member Roman Catholic Church and reform the Curia.
He has also set up another commission to advise him on how to reform the Vatican bank, ordered tighter supervision of the financial institute and set up a third commission of external experts to advise him on economic affairs, improve transparency and enforce accounting principles.
Parolin was the Vatican's deputy foreign minister for seven years until 2009 and has also served in Nigeria and Mexico.