GENEVA, Switzerland -- Liquidators and creditors of the failed Banco Ambrosiano of Italy signed a $406 million settlement Friday on the bank's outstanding debts that could soak up half of the liquid assets of the Vatican.
The complex and lengthy settlement was signed by 60 representatives of all involved parties.
Banco Ambrosiano collapsed in 1982 with debts of $1.3 billion, largely amassed by its president, Roberto Calvi, and was considered the largest and gravest post-World War II banking scandal in Europe.
Calvi, who was found hanged under London's Blackfriars Bridge on June 18, 1982, was known as 'God's Banker' because of his close relationship with the Vatican Bank and its American president, Archbishop Paul Marcinkus.
Bankers involved in the 161-page settlement said the meeting included representatives of the Vatican, which is to pay $244 million, or 60 percent, of the amount going to 120 creditor banks.
Financial experts said this is nearly half of the estimated $500 million of the Vatican's liquid assets, which had close links to Ambrosiano but rejects any responsibility for its collapse.
The Vatican is making the payment as a 'voluntary contribution.'
Italian and other financial journals reported that the Vatican Bank, called the Institute for Religious Works, already has liquidated some property and stock holdings to raise cash for its payment.
The Italian newspaper La Stampa said Friday the Vatican is also understood to be seeking a loan from New York banks.
The $406 million settlement negotiated among liquidators, creditors and the Vatican over nearly two years represents 68 percent of the $606 million in claims still outstanding.
The former Ambrosiano president, whose death has not been established to be either a suicide or a murder, had established a string of dummy holdings that bought him shares with money supplied by the bank's subsidiaries.
The subsidiaries, in turn, had borrowed the funds from international banks.
This was done to a large extent with the help of 'letters of patronage' which Calvi obtained from Marcinkus and which he used to imply that the Vatican was providing guarantees.
Calvi also had murky connections with the secretive P-2 Masonic Lodge in Italy and the Italian underworld.
