UPDATE 1-Top Vatican bank managers resign after monsignor’s arrest

VATICAN CITY
Reuters

Mon Jul 1, 2013

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(Reuters) – The director and deputy director of the Vatican bank resigned on Monday, following the arrest of a senior cleric with close connections to the bank who is accused of plotting to smuggle 20 million euros ($26 million) into Italy from Switzerland.

A statement from the Vatican said Paolo Cipriani and Massimo Tulli had handed in their resignations, three days after the arrest of Monsignor Nunzio Scarano, an accountant in a Vatican department who is the subject of two separate investigations by Italian magistrates.

Ernst von Freyberg, the bank’s president will take over as interim director general and a new position of chief risk officer will also be created to improve compliance with financial regulations.

In the latest of a series of blows to the Vatican’s scandal-plagued bank, Scarano, 61, was arrested on Friday along with Giovanni Zito, a secret services agent, and financial broker Giovanni Carenzio.

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