The Vatican Bank ousted its president on Thursday after he failed to clean up the image of an institution that has come to symbolise the opacity and scandal gripping the Holy See's administration.
Ettore Gotti Tedeschi was forced to resign "for failing to carry out duties of primary importance," the Holy See said in a statement.
The president was ousted in the wake of a series of financial scandals as the Vatican tries to clean up its image and put a stop to a leak of documents.
"The board passed a unanimous no-confidence vote against the president... and believes the action is important to maintain the vitality" of the bank, the Vatican said, as internal divisions over transparency came to a head.
Gotti Tedeschi, an expert on financial ethics, was put in charge of the bank -- also known as the Institute for Religious Works (IOR) -- in 2009, in an effort on the part of the Vatican to rid the institution of scandal.
Moneyval, the Council of Europe's experts on anti-money laundering, is due to rule at the beginning of July on the whether the Holy See has managed to clean up its act and meet international monetary standards.
But the former head of Spanish bank Santander's Italian operations tasked with bringing transparency to the bank came under suspicion in 2010 when he was investigated as part of an inquiry by magistrates into money-laundering.
Gotti Tedeschi, 67, was accused of violating laws set up in 2007 that tightened rules on disclosure of financial operations to the Italian central bank in a bid to stamp out money laundering.
He was more recently also suspected of leaking documents and accused in some quarters of serving his own interests.
The board said it would seek a president who could "help the institute establish efficient and extensive relations between it and the financial community based on mutual respect of accepted international banking standards."
For now, Deputy President Ronaldo Hermann Schmitz will take over the reigns.
Gotti Tedeschi's exit comes at a tense time for the Vatican, which has had to deal over the past months with a series of leaks of sensitive documents and accusations of corruption and fraud splashed over the Italian press.
In the wake of the 2010 scandal -- which saw an Italian court temporarily seize 23 million euros ($33 million) from the IOR -- Pope Benedict XVI created a new financial authority to "prevent and oppose illegal financial activity."
The aim was to get the Vatican on to the "white list" of financially virtuous countries, but internal tensions sprang up after the Secretary of State Tarcisio Bertone pushed for the new transparency law to be watered down.
It is not the first time that the IOR, which administers accounts held by religious orders, cardinals, bishops, priests and nuns, has made the headlines.
In 1982 IOR was caught up in one of Italy's biggest fraud cases when Milan's Banco Ambrosiano -- of which it was the main shareholder -- collapsed.
Banco Ambrosiano's chairman Roberto Calvi, known as "God's Banker" because of his ties with the Vatican, was found hanging from a London bridge.