24 May 2012 Last updated at 15:16 ET
Source: BBC News
Mr Tedeschi is under investigation for suspected money-laundering
The director of the Vatican Bank, Ettore Gotti Tedeschi, has been removed from his post for dereliction of duty, the Vatican says.
The bank’s board of directors unanimously passed a no-confidence vote in Mr Tedeschi, a statement said.
It said he had failed “to carry out duties of primary importance”, but it did not elaborate.
In 2010 Italian police launched an investigation against Mr Tedeschi as part of a money-laundering inquiry.
Members of the board believed Mr Tedeschi’s dismissal was needed to “maintain the vitality of the bank”, the Vatican statement said.
The board will now look for a new director to restore relations with the international financial community, “based on mutual respect for accepted international banking standards”.
Mr Tedeschi declined to comment on his dismissal. He told journalists: “I’d rather say nothing, otherwise I’d say ugly things.”
The Vatican Bank, known officially as the Institute for Religious Works (IOR), was created during World War II to administer accounts held by religious orders, cardinals, bishops and priests.
It lost £250m in a scandal involving the collapse of one of Italy’s biggest private banks – the Banco Ambrosiano – in 1982, with which it had close ties.
The Vatican Bank has been headed by Mr Tedeschi, 62, a trained economist, since 2009.
When Mr Tedeschi was placed under investigation in 2010, the Vatican said it was “perplexed and astonished”, and expressed full confidence in Mr Tedeschi.
It said the matter was the result of a misunderstanding, and that none of its employees were involved in any wrongdoing.
As part of the inquiry, Italian tax police seized 23m euros ($29m, £18.4m) that the Vatican Bank had tried to transfer from a small Italian bank called Credito Artigianato.
A month later, the Vatican set up a new financial authority to combat money laundering and make its financial operations more transparent, ahead of an EU deadline.
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