A statement from the Vatican said Paolo Cipriani and Massimo Tulli had handed in their resignations, three days after the arrest of Monsignor Nunzio Scarano, an accountant in a Vatican department who is the subject of two separate investigations by Italian magistrates. Ernst von Freyberg, the bank's president will take over as interim director general and a new position of chief risk officer will also be created to improve compliance with financial regulations.

In the latest of a series of blows to the Vatican's scandal-plagued bank, Scarano, 61, was arrested on Friday along with Giovanni Zito, a secret services agent, and financial broker Giovanni Carenzio. The three are accused of plotting to bring 20 million euros in cash to Italy from Switzerland for Scarano's rich shipping industry friends in the southern city of Salerno, where Scarano is under a separate investigation on suspicion of money laundering.

News of the resignation of two of the top managers at the Vatican bank, known formally as the Institute for Works of Religion (IOR), comes only days after Pope Francis set up a special commission of inquiry to get to grips with the bank's longstanding problems. As part of the management changes announced on Monday, Rolando Marranci was named as acting deputy director general and Antonio Montaresi was named as acting chief risk officer. A selection process has begun to make permanent appointments.

The future of the IOR has been clouded by uncertainty since the arrival of Pope Francis, who has laid great emphasis on cleaning up the financial scandals which have tainted the bank for decades. The IOR gained notoriety in 1982 when Roberto Calvi, an Italian banker with close connections to the Vatican bank, was found hanging from Blackfriar's Bridge, near the financial district in London. A court ruled he had been murdered but the crime has never been solved.

A 48-page document in which Judge Barbara Callari approves magistrates' requests for the arrests, and which was obtained by Reuters, contains transcripts or summaries of wiretaps, emails, letters, cheques and other results of police investigations. It describes the development of a plot that reads like a spy novel, involving a private plane that was to collect the cash in Switzerland, burned cell phones, a shady financier and an allegedly corrupt secret service agent who promised to slip the money past customs.

In her report, Callari wrote that Scarano felt safe "thanks to his relations with the Vatican bank". She said the monsignor saw the IOR [Vatican Bank or Institute of Religious Works] as "the only safe and rapid instrument for financial and banking operations that could evade - if not outright violate - laws against money laundering and tax evasion".

"Encyclopaedia," and "bookmarks" were among other code words that Scarano, who had close connections to the Vatican bank, used in phone conversations with secret service agent Giovanni Zito and broker Giovanni Carenzio, it said. The three were arrested on Friday for allegedly attempting to smuggle 20 million euros ($26 million) in cash from Switzerland a year ago for Scarano's rich shipping industry friends in their home town of Salerno in southern Italy.

The contours of the plot are detailed in a 48-page judicial document that includes transcripts or summaries of wiretaps, emails, letters and checks passed on to investigators by police. The document, in which Judge Barbara Callari approves magistrates' requests for the arrests, was obtained by Reuters.

"I think the more books you can bring the better it is," Scarano tells secret agent Zito, who was to have collected the cash from Carenzio in Switzerland and whisk it past customs controls when a private plane returned to Italy.

Scarano: "Can you bring 20-25 books?"

Zito: "Those for sure."

Scarano: "That is already a good goal, you understand, because it will allow us to do many things for ourselves."

The documents include letters and deposition testimony from Cardinal and Archbishop of New York Timothy Dolan who, during his time as archbishop of Milwaukee from 2002 to 2009, appealed to the Vatican on numerous occasions to help address the ongoing fallout from the scandal.

The 6,000 pages of documents related to eight decades of abuse cases showing in great detail the Milwaukee archdiocese regularly reassigned priests who were accused of sexual molestation to new parishes and Dolan himself asking the Vatican permission to transfer $57 million to a trust fund to protect it against court action.

In 2011, the Milwaukee archdiocese filed for Chapter 11 bankruptcy protection, citing the financial drain of settling sexual-abuse claims and acknowledging mis-steps by the church in dealing with pedophile priests. The judge overseeing the archdiocese's bankruptcy ordered the documents to be released.

The Roman Catholic Church has been hit with a series of abuse accusations and scandals during the past two decades, in the United States and elsewhere. The scandals have cost the US church about $3 billion in settlements and driven prominent dioceses such as the one in Milwaukee, into bankruptcy.

Investors turned to pork looking for high yielding assets on the back of falling prices on other commodities such as coffee or gold, according to the WSJ. In the $12 billion hog-futures market, "everybody's happy and making money and having fun," WSJ quotes Dennis Smith, a Chicago-based broker for Archer Financial Services.

The rally in hog futures got a boost last month when the world's biggest pork processor Smithfield Foods agreed to a $4.7 billion takeover by China's Shuanghui International Holdings. The deal would be the biggest Chinese takeover of a US company, the WSJ reports. Market players expect US pork exports to China will rise if the deal is completed.

According to Bloomberg, hog futures surged to a two-year high on speculation US consumers bought more pork than beef for grilling for the Independence Day holiday on July 4 as supermarkets have increased their promotions. Pork demand has risen due to its lower price compared to beef, which hit record prices at retail this spring.

China has long been a key customer for Russian military hardware, but only in the last decade have their militaries begun taking part in joint exercises.

China's defence ministry said on Tuesday that its navy would send four destroyers, two guided missile frigates and a support ship for the exercises, which start on Friday in the Sea of Japan and run until 12 July. The ships departed on Monday from the port of Qingdao, where China's Northern Fleet is based, and headed for the rallying point in Peter the Great Bay near Vladivostok. "This marks our navy's single biggest deployment of military force in a China-foreign joint exercise," the ministry said.

Trying to publicly explain a nuanced plan that has some key caveats may have been bold but the risks of the message getting garbled in the middle of the Wall Street trading day was high - and that is exactly what happened. Financial markets anticipated the Fed would start hiking interest rates late next year, earlier than the Fed's own expectations, and central bank officials spent much of last week trying to undo the damage.

It capped a series of communication mis-steps that have exposed the limit of the Fed's ability to manage expectations about interest rates and when it will wind down its bond buying program that provides the stimulus.

Bernanke appeared before a congressional panel and his written remarks warned of the dangers of dialing back the Fed's stimulus prematurely, a clearly dovish commentary. But when his appearance shifted to a question-and-answer session with lawmakers, he dropped a bomb: The Fed could start purchase reductions in "the next few meetings."

It sparked a stampede for the exits in financial markets. By the end of May, more than $1 trillion had been wiped off the value of global stocks, a figure that would reach $2.75 trillion before markets finally settled early last week.

Hessian prosecutors were the first to receive complaints about the matter, but that is likely to grow precipitously after German media outlets reported the US surveillance has collected more than half a billion phone calls and emails per month in Germany alone.

Though broad internal surveillance is also an issue in the US, the NSA’s policies don’t make spying on Germans illegal as such. The US lists Canada, Britain, Australia and New Zealand as “second party” nations exempt from surveillance, but considers Germany fair game. The program also explicitly targeted European Union diplomats.

Justice Minister Sabine Leutheusser-Schnarrenberger said the US policy was “beyond comprehension,” and said that such “Cold War” methods were unacceptable toward allies. Officials are urging the EU to take direct action to stop the surveillance.

EU leaders are demanding answers after leaked NSA documents revealed the US was tracking diplomatic communications, an accusation, if proved true, which could derail the historic free-trade deal. Both France and Germany, Europe’s largest and second largest economies have responded strongly to the alleged spying practices.

Germany has officially summoned US Ambassador Philip Murray to the Berlin Foreign Ministry over the alleged spying. If the reports are confirmed, Chancellor Merkel said it would be “unacceptable Cold War-style behavior.” French Foreign Minister Laurent Fabius also spoke out against the alleged spying program, calling for an explanation “as quickly as possible” and Hollande said it must “immediately stop”.

The deal – which has been in the works for decades – will offer ‘huge economic benefits’ both for the US and EU, Jose Manuel Barroso, President of the European Commission, said after the announcement was made at the G8 summit in Northern Ireland. “We cannot negotiate over a big transatlantic market if there is the slightest doubt that our partners are carrying out spying activities on the offices of our negotiators,” EU Commissioner for Justice Viviane Reding said.

“Partners do not spy on each other,” said Reding, forewarning a possible breakdown in treaty negotiations.

Last Tuesday, the foreign ministers of the European Union visibly had to pull themselves together when their German counterpart began to speak. Guido Westerwelle voiced his opposition to entering into EU accession negotiations with Serbia this year. The politician, a member of the pro-business Free Democratic Party (FDP), noted that the German parliament, the Bundestag, would not support negotiations this year and proposed postponing until January 2014.

Westerwelle also said that the heads of state and government should handle the issue, which is not customary. Finally, Luxembourg Foreign Minister Jean Asselborn had had enough. "We're not the African Union," he said angrily. "Why don't we just write that the Bundestag should make the decision?" The other foreign ministers grumbled in assent.

The dispute is symptomatic of the relationship between Berlin and its EU partners. There is growing resentment in Brussels and other European capitals over the new anti-Europe course the German government has adopted in the election campaign. "A national election has never dominated European policy to this extent," says a senior official with the European Commission.

The German government reacted strongly on Monday to media reports that the United States has spent years spying on the European Union and on specific European countries. Meanwhile, European Union leaders have both reviled the US for allegedly bugging EU diplomatic missions in Washington, DC, and New York and ordered that bloc facilities be searched for American eavesdropping equipment.

"The monitoring of friends - this is unacceptable. It can't be tolerated," German Chancellor Angela Merkel said on Monday through her spokesman Steffen Seibert. "We are no longer in the Cold War." Seibert said that Merkel had already communicated her displeasure to the US. "Trust has to be the basis of our cooperation," Seibert said. "When it comes to this affair, trust has to be re-established."

Channel 4’s head of factual programming Ralph Lee said the channel would act as a ‘nationwide tannoy system’ for Britain’s 2.8 million Muslims while they observed Ramadan. He said almost five per cent of the British population would ‘actively engage’ in Ramadan this month, adding: ‘Can we say the same of other national events that have received blanket coverage on television such as the Queen’s coronation anniversary?’

Critics questioned whether the decision to transmit the call to prayer was a ‘publicity-seeking stunt’ by the controversial broadcaster. Mr Lee said: ‘The calls to prayer prompt Muslims to carry out quiet moments of worship, but hopefully they’ll also make other viewers sit up and notice that this event is taking place.’