By Philip Pullella
VATICAN CITY (Reuters) - Pope Francis named a respected senior Bank of Italy official on Wednesday to head the Vatican's financial regulator, following unprecedented police raids on the organization as part of an investigation into the purchase of luxury London real estate.
Carmelo Barbagallo, 63, former head of supervision at Italy's central bank, succeeds Swiss lawyer Rene Bruelhart as head of the Vatican's Financial Information Authority (AIF).
Bruelhart left last week after five years in the post when the pope did not renew his mandate.
Vatican police entered the offices of the AIF and of the Secretariat of State - the administrative heart of the Catholic Church - on Oct. 1, as part of their investigation of an investment the Secretariat had made in London real estate.
The officers, operating under a search warrant secured by the Vatican's own prosecutor, seized documents, computers and cellphones during the raids.
The head of the Secretariat, Cardinal Pietro Parolin, said last month the property deal had not been transparent and promised to shed light on it. The AIF board has said it did nothing wrong when it looked over the property investment.
The raids prompted concerns in the international financial community about the AIF's ability to keep confidential documents secure.
The Toronto-based Egmont Group of financial intelligence units, an informal organization with about 165 members, then suspended the AIF from using its secure communications network.
Two of the five members of the AIF board resigned to protest against what they saw as a weakening of the AIF's independence as a result of the raids.
Bruelhart, who had presided over the board, is a former vice-chair of Egmont. Egmont's acceptance of the Vatican six years ago was seen as a major step forward in cleaning up the Vatican's negative image following years of scandals.
The pope's choice of Barbagallo, a 40-year Bank of Italy veteran, appeared to be an attempt to assuage fears of instability in the AIF.
"I intend to reassure the international system of financial information that all cooperation will be given in full respect of the best international standards," Barbagallo said in a statement.
Pope Francis said at the weekend the Vatican was looking forward to a scheduled evaluation next year by Moneyval, a monitoring body of the Council of Europe which has recently given the Vatican's financial reforms mostly positive reviews.
Five Vatican employees remain suspended, including AIF director Tommaso di Ruzza. Domenico Giani, Vatican security chief and the pope's bodyguard, resigned later over the leak of a document related to the investigation.
(Reporting by Philip Pullella; Editing by Crispian Balmer and Gareth Jones)