Banco Ambrosiano Collapses Amid Criminal Accusations Summary

  • Last updated on November 11, 2022

The collapse of Banco Ambrosiano was the first large bank failure since World War II. The collapse sent shock waves through world finance and led to a series of international bank crises and collapses. The criminal activities of bank officials, the shootings and suicides of persons involved in the crimes, and the large sums of Vatican and Mafia funds involved in the bank’s dealings have kept the scandal alive into the twenty-first century.

Summary of Event

Pope Paul VI appointed Archbishop Paul Marcinkus, an American, to head the Vatican Bank in 1971—a strange appointment, given Marcinkus’s lack of banking experience. Marcinkus had served as a translator in the last months of Pope John XXIII’s pontificate and then as translator and de facto bodyguard outside the Vatican for Paul VI. Possibly failing mentally, it seems that Paul VI appointed the tall and imposing archbishop for preventing an assassination attempt on the pope’s life during a visit to the Philippines. [kw]Banco Ambrosiano Collapses Amid Criminal Accusations (Aug. 6, 1982) Banco Ambrosiano Roman Catholic Church;and Banco Ambrosiano[Banco Ambrosiano] Vatican Bank Mafia;and Banco Ambrosiano[Banco Ambrosiano] Calvi, Roberto Marcinkus, Paul Sindona, Michele John Paul II Vatican City Banco Ambrosiano Roman Catholic Church;and Banco Ambrosiano[Banco Ambrosiano] Vatican Bank Mafia;and Banco Ambrosiano[Banco Ambrosiano] Calvi, Roberto Marcinkus, Paul Sindona, Michele John Paul II Vatican City [g]Europe;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [g]Italy;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [g]Vatican City;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [c]Banking and finance;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [c]Corruption;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [c]Business;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [c]Organized crime and racketeering;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [c]Law and the courts;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] [c]Murder and suicide;Aug. 6, 1982: Banco Ambrosiano Collapses Amid Criminal Accusations[02000] Paul VI John Paul I

Banco Ambrosiano chair Roberto Calvi, right, is escorted into a courtroom in Milan, Italy, at the start of his trial for banking-related crimes in May, 1981.

(Hulton Archive/Getty Images)

Marcinkus accepted Roberto Calvi as the Vatican’s Italian banker on the recommendation of Sicilian banker Michele Sindona, who had been a successful moneymaker for the Vatican but was now moving his criminal operations to the United States for financial dealings with the Mafia. Because of Sindona’s successful work for Marcinkus, Calvi was appointed chairman of the private Banco Ambrosiano.

Milan remains the financial capital of not only Italy but also Europe. Sindona was a fast, loose, and inventive banker. Partly owing to his knowledge of English and the profiteering he engaged in with American goods and Mafia collusion after the allied invasion of Sicily, he had been able to move his operations north to Milan. It was there that Sindona and Calvi entered into a banking relationship and, over time, found that they were of similar mind about transactions that skirted the edge of legitimacy or were illegal.

Sindona had already established an offshore bank in Panama Panama that Money laundering;and Mafia[Mafia] laundered Mafia narcotics-trafficking money. On the basis of Sindona’s Panama model, Calvi opened at least one dozen of his own overseas banks in the Caribbean and Central and South America. These banks served as postbox banks for the conversion of Italian lira into U.S. dollars. Italian millionaires deposited lira in the Banco Ambrosiano. Calvi, in turn, deposited those funds into the Vatican Bank. From this bank, the Italian currency would be exported to Calvi’s offshore banks. Calvi could export the money because the Vatican, as a sovereign state, is not subject to Italian laws that restricted—then outlawed—the export of Italian capital.

After commission payments for the laundering and conversion, the offshore banks would forward the proceeds to haven banks in Lichtenstein Luxembourg;banks Luxembourg, Lichtenstein, and Switzerland to finance political and other operations requiring payment in hard currency. Some of these operations included the following: On order of Pope John Paul II, the sole head of the Vatican Bank, millions of lira were funneled into Poland to support that country’s anticommunist solidarity movement. Also, Calvi leveraged takeovers of northern Italian private banks by spreading deposits of large amounts coming into Italy and thereby hindering detection of those takeovers. These banks included the legitimate Catholic bank in the Veneto, managed by Cardinal Albino Luciani, patriarch of Venice. Calvi’s actions so outraged the cardinal that, after becoming Pope John Paul I, he made no secret that he would discharge Marcinkus—as head of the Vatican Bank—for complicity in Calvi’s hostile takeover of “his” bank, among other Calvi sins.

Further operations included Calvi’s purchase of 40 percent of the large Rizzoli publishing concern that also owned Corriere della Sera, the Italian equivalent of The New York Times. Corriere della Sera became an organ of propaganda for the secret Masonic lodge Propaganda Due, or P-2. The lodge was eventually unmasked and found to be a virtual state within a state, whose members included Vatican officials, politicians, government officials, military and intelligence officers, and Mafia Mafia figures who allegedly had been plotting a right-wing coup d’etat to prevent a feared shift of Italian government to the left. Calvi was found to be a P-2 member as well.

Given that Calvi was dispensing enormous sums of money, the director of the Bank of Italy ordered an investigation into his personal and bank activities. Calvi’s problems were exacerbated by shootings (by the Mafia, as informers later revealed) of a journalist who continued to expose the Ambrosiano story, of a former Ambrosiano officer who knew secrets, and of a current Ambrosiano officer who had been pressuring Calvi to account for his actions. Calvi’s secretary died either after jumping or being pushed—likely by a mafioso—from the top floor of the Ambrosiano bank building.

Calvi was arrested, charged, tried, and sentenced to four-and-one-half years in prison, where he made a feeble attempt at suicide. Provisionally released to appeal his sentence, Calvi vowed that he would never return to prison. Against the conditions of his release (which included turning over his passport and remaining in Italy), Calvi was flown out of Italy by a Mafia consigliere (adviser) on a private jet to a private airport in England. Imprudently, Calvi revealed that he was carrying documents that would incriminate many of his high-standing clients. He was taken to a prearranged London residential hotel. The next day, June 18, 1982, he was found hanging from London’s Blackfriars Bridge. Calvi’s wife left Milan for Nassau in the Bahamas with her daughter and son. The three remained there for some time as permanent residents, likely living on funds earmarked for them. Calvi’s son became a banker in Montreal, Canada.

In the immediate aftermath of Calvi’s murder, Banco Ambrosiano collapsed, unable to raise the money to cover the indebtedness Calvi had created. On August 6, the bank was declared insolvent and it went into receivership. More than $1 billion in losses were never accounted for. The Vatican, to repair its deeply damaged image, pledged to repay the millions lost by Ambrosiano’s individual stockholders but did so without admitting culpability in the scandal.

One decade after Calvi’s murder and after two exhumations, his death was ruled a homicide. It is believed that a mafioso, specialized in strangulation, murdered him before hanging him from Blackfriars Bridge.


In 1989, after the collapse of the Soviet Union, John Paul II removed Marcinkus, who was under subpoena by the Italian police, as director of the Vatican Bank. The directorship was assigned to a committee of two ecclesiastical and two secular members. Marcinkus spent his years waiting to return to the United States within Vatican City. He had been granted Vatican citizenship and thereby avoided arrest. Until his death—having failed to attain the cardinalship he so ardently wanted—Marcinkus served as a country-club priest in Sun City, near Phoenix, Arizona. Banco Ambrosiano, with the help of the Bank of Italy and the Vatican, was reformed and resumed the banking business.

In the wake of Ambrosiano’s collapse, which led to the collapse of Franklin National Trust of New York, the Bank of Italy mandated several new rules, including that Italian banks maintain, regularly disclose, and prove the availability of a minimum percentage of capital, based on their respective size. At the international level, the collapse of Ambrosiano moved a number of banks to examine their practices as well and to develop stringent rules of operation. Vatican City Banco Ambrosiano Roman Catholic Church;and Banco Ambrosiano[Banco Ambrosiano] Vatican Bank Mafia;and Banco Ambrosiano[Banco Ambrosiano] Calvi, Roberto Marcinkus, Paul Sindona, Michele John Paul II

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Cornwell, Rupert. God’s Banker: The Life and Death of Roberto Calvi. London: Unwin, 1984. This work remains an excellent, detailed account of the Banco Ambrosiano-Calvi scandal.
  • citation-type="booksimple"

    xlink:type="simple">Hammer, Richard. The Vatican Connection. New York: Holt, Rinehart & Winston, 1982. Forensic investigation of the Sindona years as Mafia and Vatican banker to the collapse of Banco Ambrosiano. Valuable background information.
  • citation-type="booksimple"

    xlink:type="simple">Jones, Tobias. The Dark Heart of Italy. New York: North Point Press, 2004. The Ambrosiano-Calvi scandal is discussed in a chapter on Catholicism among individuals and the Vatican’s mandates on practicing Catholicism.
  • citation-type="booksimple"

    xlink:type="simple">Raw, Charles. The Moneychangers: How the Vatican Bank Enabled Roberto Calvi to Steal Two Hundred Fifty Million for the Heads of the P2 Masonic Lodge. London: Harvill, 1992. A comprehensive study of the Ambrosiano-Calvi scandal that details virtually every known transaction in the case.
  • citation-type="booksimple"

    xlink:type="simple">Willan, Philip. The Last Supper: The Mafia, the Masons, and the Killing of Roberto Calvi. London: Robinson, 2007. Argues that Calvi’s murder and the Banco Ambrosiano scandal were played out on the stage of the Cold War, with its dueling fears of democracy and communism, and in the context of a hunger for power and wealth.
  • citation-type="booksimple"

    xlink:type="simple">Williams, Paul L. The Vatican Exposed: Money, Murder, and the Mafia. Amherst, N.Y.: Prometheus Books, 2003. Historical account of the formation of the Vatican Bank, Calvi’s selection as its banker, and the resulting scandal.
  • citation-type="booksimple"

    xlink:type="simple">Youngblood, Robert B. “Roberto Calvi.” In Great Lives from History: Notorious Lives, edited by Carl L. Bankston III. Vol. 1. Pasadena, Calif.: Salem Press, 2007. An introductory article on Calvi’s life and death.

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