The Vatican bank has blocked the accounts of more than 2,000 clients and ended some 3,000 "customer relationships" as part of a clean-up process that nearly wiped out its profit, its 2013 financial statement showed yesterday.

Over the past few weeks, Italy has been back at the heart of events.

The Vatican took another step in its efforts to be more financially transparent by publishing a first-ever annual report for the Vatican bank.

The director of the embattled Vatican bank and his deputy resigned yesterday, following the latest developments in a finance scandal that has landed one monsignor in prison and added urgency to Pope Francis’s reform efforts.

The Vatican has been drawn into a new controversy after acknowledging that its bank’s new president is also chairman of a shipbuilder involved in the construction of warships – a significant conflict for an institution that has long shunned ties to military manufacturing.