The Italian authorities has launched a shock 40% windfall tax on the earnings made by banks from excessive rates of interest.
Ministers stated they deliberate to make use of the proceeds to assist mortgage holders – however stated it was a one-off levy to be utilized this summer time.
The announcement despatched banking shares tumbling. Italy’s largest chain Intesa Sanpaolo was down 8% on Tuesday morning, whereas rival UniCredit dropped 6.5%.
It comes following the introduction of comparable taxes in Spain and Hungary – and amid requires the UK authorities to do the identical.
Learn extra from enterprise:
Miserable weather hits summer clothes sales
Publisher Simon & Schuster sold for £1.27bn
Food prices may never fall again, chief economist warns
Italy’s right-wing cupboard, which agreed to the measure late final evening, has accused the nation’s banks of raking in document earnings this yr off the again of upper lending charges, whereas failing to cross them on to savers.
Intesa Sanpaolo stated final month it anticipated to make greater than €13.5bn (£11.6bn) this yr from its web curiosity margin alone.
Deputy prime minister Matteo Salvini stated: “One has solely to have a look at banks’ first-half earnings… to understand that we aren’t speaking about a couple of hundreds of thousands, however of billions.
“If [it is true that] the burden deriving from the price of cash has… doubled for households and companies, what present account holders obtain has definitely not doubled.”
The tax will apply to the web curiosity margin, a measure of what revenue banks receive from the hole between lending and deposit charges.
Citi analysts calculated the tax may wipe practically a fifth off Italian banks’ web revenue this yr. Sources stated the federal government expects to gather €3bn (£2.6bn) from the measure.
It additionally follows complaints from the Italian authorities over the European Central Financial institution’s (ECB) resolution to maintain rising charges.
Inflation slowed to six.4% in Italy final month – because the ECB hiked its benchmark deposit rate of interest to three.75%, the ninth consecutive rise in a row.
The UK authorities and regulators have expressed concern that British banks have also been slow to pass on higher rates to savers, however there was no indication that ministers will introduce the same tax right here.
The Financial institution of England increased interest rates for 14th time in a row to 5.25% final week and warned charges have been prone to stay excessive as a part of efforts to carry down inflation.
The Monetary Conduct Authority has warned it is going to “take motion” in opposition to banks that can’t present a justification for low rates of interest.
Campaigners within the UK welcomed the choice by Italy’s authorities. Positive Cash, which has referred to as for larger taxes on banks within the UK, stated on social media that it was “delighted” and urged ministers to comply with go well with.