Vatican Bank Fires President Amidst Money Laundering Scandal

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Vatican Bank president Ettore Gotti Tedeschi has been removed from his position as the Holy See’s chief banker after receiving a unanimous vote of no-confidence from the bank’s board of lay members – who blamed Tedeschi for failing to improve the financial institution’s governing standards.

Tedeschi was told to resign as he did not carry out "various fundamentally important functions of his office,” said the Vatican Bank in a statement, with the institution now looking for a new president who could “"re-establish full and effective relations between the Institute and the financial community, based on mutual respect of internationally accepted banking standards.”

The Vatican Bank, known formally as the Institute For Religious Works (IOR) had been the subject of intense scrutiny over the last year, following allegations of money laundering and secretive financial practices.

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Tedeschi, who was appointed in 2009, is also under investigation from the Italian police for alleged money laundering, though the Vatican has regularly insisted that the probe was motivated by outside political interests.

When asked about the Vatican Bank’s board decision, Tedeschi told Reuters that he had been sacked because the bank did not like his honest way of doing things.

"I don't want to speak or give interviews, I have paid for my transparency," he said.

Prior to joining the Vatican Bank, Tedeschi had been a professor of financial ethics at Milan’s leading Catholic university, and remained as the head of Spain's Banco Santander's Italian unit in Milan during his tenure at the IOR.

According to CNN’s Vatican analyst John Allen, there had been rumours of a "problem of chemistry" between Tedeschi and the bank’s director Paolo Cipriani, who ran operations on a daily basis.

Tedeschi’s commitments with Banco Santander also meant that most at the bank saw him as someone who had failed to meet up with initial expectations of being a “white knight” to clean up the Vatican Bank’s reputation.

"The expectation when he was named is that he would be hands on and right the ship and, in fact, he's been spending only about two days a week there and doing virtually nothing," said Allen.

"There's great frustration that he seemed to be a do-nothing administrator popping into the office to pick up mail and publicize his lectures and books."