Vatican passes transparencty laws for bank

(Reuters): The Vatican, whose bank has been embroiled in a money-laundering scandal, said on Friday it had adopted laws to comply with international standards on financial crime. The Vatican Bank, founded in 1942 by Pope Pius XII, was in the spotlight last September when Italian investigators froze $32.55 million in funds in Italian banks after they opened an investigation into possible money laundering. The bank says it did nothing wrong and was just transferring funds between its own accounts. The investigation is continuing. The Vatican said the wide-ranging law, which came into effect at midnight, marks the biggest action by the Vatican to meet international demands for more financial openness.

"This is an event of great legal importance which has wide moral and pastoral significance," the Vatican said in a statement.

The law, which was ordered by Pope Benedict last year, sets up internal regulations to see to it that its bank — officially known as the Institute for Words of Religion (IOR) — and all other departments adhere to international regulations and standards and cooperate with foreign authorities.