Italian authorities have seized €23 million ($31 million Cdn) of Vatican bank assets as part of an investigation into suspected money laundering.

The Vatican said it was confused as to why financial police targeted the funds in a Vatican account at the Rome branch of the Italian bank Credito Artigiano Spa.

"The Holy See is perplexed and surprised by the initiatives of the Rome prosecutors, considering the data necessary is already available at the Bank of Italy," the Vatican said in a statement Tuesday.

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The statue of the Lady of Lourdes is carried in a procession in Saint Peter's Square on Feb. 11.

Bank chairman Ettore Gotti Tedeschi and director-general Paolo Cipriani are also being investigated to determine whether European Union money-laundering rules have been violated, news reports said.

The Vatican said it has the "utmost faith" in the two men who head the bank, officially known as the Institute for Religious Works (IOR).

The probe is not the first time the bank has faced legal scrutiny. In the 1980s, it was implicated in a scandal that resulted in a banker being found hanging from Blackfriars Bridge in London.

Italian prosecutors maintain Roberto Calvi, head of the collapsed Banco Ambrosiano, was murdered, but there have been no convictions. The Vatican bank was Banco Ambrosiano's main shareholder.

In its statement responding to the latest investigation, the Vatican said it had been working for some time to make its finances more transparent to comply with anti-terrorism and anti-money laundering regulations.

The bulk of the money seized on Tuesday —  €20 million — was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino, according to news agencies ANSA and Apcom.

According to the reports, the Vatican bank had neglected to communicate to financial authorities where the money had come from.

The reports stressed that Gotti Tedeschi wasn't being investigated for laundering money himself but for a series of omissions in financial transactions.

Prosecutors declined requests seeking confirmation of the reports.

With files from The Associated Press