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) -- The

Vatican Bank

said it was surprised by being targeted in a money-laundering investigation, according to a

Bloomberg News


"The authorities of the Holy See have frequently manifested a clear desire for full transparency regarding the financial operations of the

Institute for Works of Religion

," the Vatican told


in an emailed statement. The Institute is also known as the Vatican Bank.

Italian police have temporarily frozen funds from one of the bank's accounts amid a probe of bank Chairman Ettore Gotti Tedeschi,


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stated, citing Italian media reports.

In addition to his role at Vatican Bank, Gotti Tedeschi is non-executive chairman of Santander Consumer Bank in Italy, a unit of Spain's

Banco Santander


. He is also a professor of financial ethics at the Catholic University in Milan, according to published reports.

The freezing of the account follows a recommendation by Italy's central bank that lenders focus more attention on transactions in countries that have not agreed to abide by international tax standards.

Similar concerns are expected to lead to the resignation of Alessandro Profumo,

head of



, which is Italy's largest bank.


Written by Dan Freed in New York


Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.