Vatican Bank faces Money-laundering Probe

Rome, Italy (CNN) -- Italian authorities are investigating the Vatican Bank over possible violations of money laundering regulations, the Bank of Italy told CNN Tuesday.

Another Italian bank alerted Bank of Italy investigators to two Vatican Bank transactions that did not appear to comply with anti-money laundering requirements, the Bank of Italy said.

When Bank of Italy investigators told legal authorities about the transactions, they were told that judicial authorities were already investigating the Vatican Bank, the Bank of Italy said.

The Vatican said Tuesday it is "perplexed and baffled" by the public prosecutor's actions, and the Holy See aims for "complete transparency" in its financial operations.

The Vatican said it has "full trust" in Ettore Tedeschi, the head of the bank -- which is officially known as the Istituto per le Opere di Religione.

The Bank of Italy investigation was prompted by two wire transfers which the Vatican Bank asked Credito Artigiano to carry out, the Bank of Italy said.

The Vatican Bank did not provide enough information about the transfers -- one for 20 million euros (about $26 million), and one for 3 million euros (about $4 million) -- to comply with the law, prompting the Bank of Italy to suspend them automatically, it said.

The Vatican Bank is subject to particularly stringent anti-money laundering regulations because Italian law does not consider it to operate within the European Union.

It must supply more detailed information about transactions than European Union banks have to give.

Source:  CNN
CNN's Hada Messia in Rome, Italy, contributed to this report.