http://www.adnkronos.com/IGN/Aki/English/Business/Vatican-Cardinal-nominated-as-head-of-new-financial-watchdog_311541618205.html

Vatican City, 14 Jan. (AKI) - The Vatican has nominated Cardinal Attilio Nicora as the head of its new financial authority, sources said. The watchdog is part of a drive to comply with new European banking standards amid accusations that the Vatican had been breaching international norms on money laundering.

Nicora, formerly the Archbishop of Verona, will retain his post as president the Administration of the Patrimony of the Apostolic See, which has a roles similar to those of a government treasury department and a central bank.

The Administration of the Patrimony of the Apostolic See will be answerable to the new financial authoritity created last month by new rules signed into law on 30 December by Pope Benedict XVI.

To prevent a conflict of interest, Nicora will not take part in the new financial authority's meetings when these concern The Administration of the Patrimony of the Apostolic See.

The new financial watchdog's board members will be laymen, and are tipped to include jurist Giuseppe della Torre and former Bank of Italy official Marcello Condemi.

Once he is formally appointed, Nicora will appoint the new authority's technical director. The watchdog will work with the Holy's See's various financial institutions, including the Vatican Bank (IOR) and oversee their transactions.

In September, Rome prosecutors put the director of the Vatican Bank, Ettore Gotti Tedeschi, and his deputy under formal criminal investigation after receiving a tip-off from the Bank of Italy about possible money laundering.

The Italian judiciary seized 23 million euros which the Vatican had deposited at a branch of an Italian commercial bank, reportedly Credito Artigiano, near Saint Peter's Square, allegedly without properly identifying either the depositor or the recipient.

The Vatican has repeatedly said a "misunderstanding" has arisen over the suspect transaction and claimed there had been no wrongdoing by its bank or its employees.

In letter issued by the Holy See, Benedict said he was approving the new law to bring the Vatican banking regulations into line with international efforts to combat money laundering and the financing of terrorism.

The Holy intended to "adopt these rules as its own," make the international banking systems more transparent and accountable and crack down on legal loopholes that have allowed criminals to exploit the financial sector, he said.