Vatican Bank Close To Signing Deal With Italy

The Vatican has revealed it is close to reaching an agreement with Italy over a clampdown on potential money-laundering.

A senior Vatican official said the deal may be announced later this week, and is part of Pope Francis' attempt to sweep clean Vatican finances.

For decades the powerful financial institution within the Holy See has been accused of facilitating illicit behaviour.

Officially known as the Institute for Works of Religion, it has faced accusations of providing a tax haven for wealthy Italians.

That practice violates the bank's mission of managing funds for the church and helps well-connected Italians evade taxes, according to investigators and regulators.

Since his election two years ago, Pope Francis has forced major changes on the bank to rebuild trust and its sense of purpose.

Last year it blocked accounts of 2,000 clients, ended around 3,000 "customer relationships", and saw a management overhaul.

The bank's 2014 annual report is due to be revealed in the coming weeks.

The data-sharing agreement comes on the back of Italy's recent deals with Monaco, Liechtenstein and Switzerland.

Meanwhile, US investigators have agreed a deal with Swiss private bank BSI, over voluntary disclosure of tax-related offences by wealthy Americans.

Lugano-based BSI is to pay a $211m (£140m) penalty after admitting for decades to operating thousands of client accounts to hide assets from US authorities.

There is now expected to be a flood of settlements between the US Department of Justice and the notoriously secret Swiss private banking sector.

But the voluntary disclosure provision does not include Swiss banks already under criminal investigation.

Last May, Credit Suisse paid more than $2.5bn (£1.7bn) over tax avoidance and rival UBS admitted wrongdoing and paid $780m (£530m) in a 2009 tax evasion settlement.

Criminal investigations continue into several other Swiss banks, as well as a probe into HSBC's Geneva private banking arm.