An unforeseen tax on banks’ extraordinary profits, instigated by Italy’s conservative regime, has taken markets by surprise, causing an approximately US$10 billion decline in Italian lenders’ market value.
The proclamation came late Monday night from Matteo Salvini, the Deputy Prime Minister, stating a 40% levy on excess gains from banks would be levied as part of a comprehensive decree ratified during a cabinet assembly. According to Bloomberg Intelligence, the tax could cost banks more than 3 billion euros (US$3.3 billion). Analysts at Citi say that hit could wipe out 19% of all bank earnings, reported Bangkok Post.
The tax initiative targets the improved interest profits from the rate augmentations by the European Central Bank (ECB), as highlighted by a government declaration yesterday. The government’s primary objective revolves around a…
