Vatican "Astonished" at Bank Inquiry

Sydney Morning Herald
October 20, 2010

The Vatican said it is "astonished" after a Rome court upheld a decision to seize 23 million euros ($A32.7 million) from the Vatican bank and investigators reportedly widened their inquiries.

Italy's financial police made the seizure last month as part of an investigation into the bank -- formally known as the Institute for Religious Works (IOR)-- on suspicion of violating the country's money-laundering rules.

"The news... astonished us. We believe it comes down to a problem of interpretation," Vatican spokesman Federico Lombardi said in a statement on Wednesday.

"IOR officials believe they can clarify the issue as soon as possible."

The investigation centres on suspicious cash transfers in 2009 of 20 million euros ($A28.44 million) to a branch of US bank JP Morgan in Germany and a further three million euros ($A4.27 million) to the Italian Banca del Fucino.

Investigators are also looking into two apparently shady transfers of 900,000 euros ($A1.28 million) involving the Vatican bank, according to media reports.

It is not the first time that the Vatican bank has made the headlines.

In 1982 IOR was caught up in one of Italy's biggest fraud cases when Milan's Banco Ambrosiano -- of which it was the main shareholder -- collapsed.

Banco Ambrosiano's chairman Roberto Calvi, known as "God's Banker" because of his ties with the Vatican, was found hanging from a London bridge.


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