Pope wants clean banking to curb money laundering at the Vatican

After two top bankers at the Vatican bank were probed for money laundering, Pope Benedict XVI is set to issue new norms that are designed to make the Vatican's banking system more transparent and bring it in line with international money laundering rules.

The Holy See newspaper L'Osservatore Romano yesterday reported that the pontiff will today issue a document outlining the reforms, which will create a centralised banking system to oversee all the financial affairs of the Vatican.

The Pope will also bring in a new Vatican legislation aimed at preventing money laundering and terror financing, the paper said.

The move comes after Rome prosecutors launched a three-month money laundering investigation against the Vatican bank's, the Institute for Religious Works (IOR) president Ettore Gotti Tedeschi and chief executive Paolo Cipriani. (The Vatican bank or God's bank, is called Institute for Religious Works, or IOR, in Italian).

On 21 September 2010, Rome prosecutors seized €23 million from the IOR for allegedly breaking international bank rules by trying to transfer money to an Italian bank without identifying the sender or recipient.

Although the two bank officials have not been charged, the Vatican has sided with its bankers by saying that it is just a case of ''misunderstanding.''