Vatican City, Jul 3 (IANS/AKI): The director and deputy director of the Vatican Bank have resigned following the arrest of a senior cleric on charges of plotting to smuggle 20 million euros into Italy from Switzerland.

The Vatican's announcement of the resignations of Paolo Cipriani and Massimo Tulli came three days after the arrest of one of its accountants, Monsignor Nunzio, an Italian secret service agent and a financial broker, over the plot to smuggle the cash.

Vatican Bank president Ernst von Freyberg will take over as interim director general and a new position of chief risk officer will be created to improve compliance with financial regulations, the Vatican said.

The resignations and arrests are the latest of a series of blows to the Vatican's scandal-plagued bank and came only days after Pope Francis set up a special commission to probe the Institute for Works of Religion (Ior), as the bank is formally known.

The Ior has long been tainted by scandal, from the 1980s collapse of the Banco Amborisano, whose chairman Roberto Calvi was found hanging from the Blackfriars Bridge in London, to the freezing of 23 million euros by Italian prosecutors in 2010 amid a money-laundering probe.

Cipriani and former Ior president Ettore Gotti Tedeschi were investigated for breaching money laundering norms as part of the 2010 probe, which led the Vatican to oust Tedeschi.

Pope Francis has put emphasis on cleaning up the bank. In June, he named cleric Monsignor Battista Mario Salvatore Ricca to oversee the bank's management.

The commission of inquiry which includes a US academic is expected to deliver its preliminary findings on the Ior in October.