Pope Francis has set up a special commission of inquiry to look into the activities of the troubled Vatican bank amid a fresh money-laundering investigation.

The high-powered, five-member panel, which includes four prelates and a woman Harvard law professor, will report directly to pope, bypassing the Vatican bureaucracy which has sometimes been tainted by allegations of scandal and corruption.

The new appointees will have access to documentation, board meetings and management.

The Vatican said on Wednesday the commission would enable the pope to know better the juridical position and the activities of the bank to allow an improved harmonisation with the mission of the universal church.

Vatican spokesman Father Federico Lombardi said the bank was not being put under "special administration" but that the commission would have ample powers to do its job.

The Vatican has promised to redouble its efforts to reform the bank and overhaul its financial legislation following reports of anonymous accounts at the bank being used by organised crime.

The new president of the bank, Ernst von Freyberg has begun a review of all its accounts and activities. Italian magistrates are investigating the bank on suspicion of money laundering, a charge the bank denies.

The bank, formally known as The Institute for Works of Religion (IOR), has a troubled history, which includes the collapse of the Banco Ambrosiano, in which the Holy See was the main shareholder, and had been accused of laundering money for the Sicilian mafia.

The IOR, which does not lend money, manages assets of 7.0 billion euros ($9.3bn) and handles funds for Vatican departments, Catholic charities and congregations and priests and nuns living and working around the world.