Ettore Gotti Tedeschi, the head of the Vatican bank who has been sacked after receiving a unanimous vote of no-confidence from his board, has claimed that he does not want to "upset" Pope Benedict XVI, Ansa agency reported.
"I am torn between the need to explain the truth and the desire not to upset the Pope," he said.
Tedeschi was forced to step down from his role as president of the bank, known as the Institute for Religious Works (Ior), for dereliction of duty, the Vatican said.
He was removed from his post in the aftermath of a series of financial scandals, as the Vatican attempts to clean up its image and halt the leak of secret documents to the media.
"The board passed a unanimous no-confidence vote against the president... and believes the action is important to maintain the vitality" of the bank, the Vatican said.
The board said it would seek a president who could "help the institute establish efficient and extensive relations between it and the financial community, based on mutual respect of accepted international banking standards".
Italian police began to investigate Tedeschi in 2010 as part of a wider inquiry into money laundering. The banker was charged with violating laws set up in 2007 that tightened rules on disclosure of financial documents to Italy's central bank. An Italian court temporarily seized €23m (£18m) from Ior. Pope Benedict XVI created a new financial authority to contest illegal financial activity.
Internal tensions between Vatican secretary of state Tarcisio Bertone and Tedeschi resulted in the new transparency law being scaled back.
Tedeschi, who is also head of Spain's Banco Santander's Italian unit in Milan, is suspected of leaking documents to serve his own personal and political interests.
The Holy See has announced that its own police unit will mount a criminal investigation into the leaks.
Tedeschi was put in charge of the bank in 2009, as part of the Pope's efforts to rid the bank of financial scandals.