Post date: May 25, 2012 3:44:11 PM
VATICAN CITY (FILE) (REUTERS) - The Vatican Bank's board of directors voted unanimously on Thursday (May 24) to oust president Ettore Gotti Tedeschi, and will seek to renew the lender's ties with the world's financial community, a statement from the Holy See said.
The president of the Vatican bank has been ousted by the board of directors, blaming him for a deterioration in standards of governance.
The board passed a no confidence vote in Gotti Tedeschi "for not carrying out various fundamental functions of his office," the Vatican said without giving details.
"They (the Vatican Bank) have a kind of a deadline coming up, where either in June or July there is going to be the decision by the OECD (Organisation for Economic Co-operation and Development) about whether they get on this so-called 'white list' of countries, because the Vatican is a city state, that are totally transparent in their financial dealings," Reuters Vatican correspondent Philip Pullella explained.
"So they are trying to do as much as possible to get a clean bill of health," Pullella said.
"I think that the fact that they ousted him in such a public way was the signal to outsiders who are going to be making this decision that perhaps he was part of the problem and they weren't moving as fast as they wanted to," he said.
The board of the bank has said a new president will be hired to renew relations with the international banking community.
The Vatican bank, founded in 1942 by Pope Pius XII, has been in the spotlight since September 2010 when Italian investigators froze 23 million euros (33 million U.S. dollars) of its funds in Italian banks after opening an investigation into possible money-laundering.
Gotti Tedeschi told Reuters that he had been ousted because the bank did not like his honest way of doing things.
The Vatican recently adopted new financial transparency laws and set up internal regulations to make sure its bank and all other departments adhere to international regulations and standards, and cooperate with foreign authorities.
But in January Italian newspapers published leaked internal letters that appeared to show a conflict among top Vatican officials about just how transparent the bank should be about dealings that took place before it enacted its new laws.
In response to the money-laundering probe the bank, officially known as the Institute for Works of Religion, said it did nothing wrong and was just transferring the funds between its own accounts. The money was released in June 2011, but the investigation is continuing.
In March, the U.S. State Department for the first time put the Vatican on its list of countries considered vulnerable to money laundering.
That decision dealt a blow to the Vatican's bid to be included in the European Commission's "white list" of states which comply with international standards against tax fraud and money-laundering. A decision on its inclusion is expected next month.