US banking giant JP Morgan Chase is closing the Vatican bank's account with one of its Italian branches because of concerns about a lack of transparency at the Holy See's financial institution, Italian newspapers have reported.
The move is a blow to the Vatican's drive to have its bank included in Europe's "white list" of states that comply with international standards against tax fraud and money-laundering.
The bank, formally known as the Institute for Works of Religion (IOR), enacted major reforms last year in an attempt to get Europe's seal of approval and put behind it scandals that have included accusations of money laundering and fraud.
Italy's leading financial daily 'Il Sole 24 Ore' reported that JP Morgan Chase in Milan had told the IOR of the closing of its account in a letter on February 15. The letter said the IOR's account in Italy's business capital would be phased out starting on March 16 and closed on March 30.