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Vatican bank bosses questioned

Italian prosecutors have questioned the Vatican bank's two top officials as part of a money-laundering probe that resulted in the seizure of £19 million from a one of its accounts.

Chairman Ettore Gotti Tedeschi and the director general Paolo Cipriani spent about four hours at the prosecutor's office a week after authorities seized the account as a precaution.

The chairman said as he left the meeting the allegations resulted from a "misunderstanding" that he hoped would be cleared up. He said the men had asked to be interrogated.

The Vatican has stood by Gotti Tedeschi and Cipriani and insisted that its bank, officially known as the Institute for Religious Works, was actually in the process of trying to come into compliance with international norms to fight money laundering and terrorist financing.

The Vatican bank's finances have long been shrouded in secrecy. Most famously, it was implicated in a scandal over the collapse of the Banco Ambrosiano in the 1980s in one of Italy's largest fraud cases.

Roberto Calvi, the head of Banco Ambrosiano, was found hanging from Blackfriars Bridge in London in 1982 in circumstances that remain mysterious.

Banco Ambrosiano collapsed following the disappearance of 1.3 billion dollars in loans the bank had made to several dummy companies in Latin America. The Vatican had provided letters of credit for the loans.

While denying any wrongdoing, the Vatican bank agreed to pay 250 million to Ambrosiano's creditors.

The Ambrosiano scandal and other cases of shady dealings, including alleged bribes passed on to Italian politicians via Vatican bank accounts, were outlined in depth in the 2009 book "Vatican SpA," based on a treasure trove of documents left behind by a former Vatican bank official.

Author Gianluigi Nuzzi said this week that the Vatican had undergone a shift in trying to come clean following the scandals of the past and seemed legitimately intent on reforming. He said the investigation launched by prosecutors could merely have been a "warning shot" from the Bank of Italy to get its finances in line.

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