Vatican spokesman defends its bank after probe

23rd September 2010, Comments 0 comments

The Vatican's spokesman defended the city state's bank in a letter published by the Financial Times on Thursday after the daily reported on the prosecutors' investigation on the bank's executives.

"It is appropriate that I should seek to avoid the spread of inaccurate information and to ensure that no damage is caused to the institute or the good name of its managers," Federico Lombardi wrote.

The Office for Religious Works (IOR) -- the bank's official name -- came under fire on Tuesday after its president Ettore Gotti Tedeschi and chief executive Paolo Cipriani allegedly violated laws on disclosing financial operations to the Italian central bank introduced in a bid to stamp out money laundering.

Prosecutors in Rome ordered the seizure of 23 million euros (30 million dollars) belonging to the Vatican-owned bank after the financial intelligence office at the Bank of Italy noticed two IOR operations it deemed suspicious.

"The current problem was caused by a misunderstanding (now being examined) between the IOR and the bank which received the transfer order," Lombardi wrote.

He reiterated arguments already made by the Vatican newspaper and Secretariat of State in reaction to the probe, including the fact that the IOR "is not a bank in the normal definition of the term."

He also said the Vatican was working with the Bank of Italy and international organisations to adhere to tighter transparency standards and to place the Holy See on a money-laundering and terrorism white list.

Lombardi also said the Vatican stood behind IOR's managers.

"Gotti Tedeschi has been working with great commitment to ensure the absolute transparency of the IOR's activities," Lombardi said.

In the 1980s, the IOR was at the centre of a banking scandal when Italian bank Banco Ambrosiano collapsed in 1982 amid accusations of links to organised crime and political militancy.

© 2010 AFP

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