Italian Banks Slump After Government Introduces Windfall Tax
- Government members blame the surprise bank levy on ECB
- New tax follows bumper earnings for lenders after rate hikes
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Italy’s right-wing government shocked markets with an unexpected tax on banks’ windfall profits, wiping out around $10 billion from the market value of the country’s lenders.
Deputy Prime Minister Matteo Salvini announced a 40% levy on the extra profits of lenders late Monday night, as part of a wide-ranging decree approved at a cabinet meeting. Analysts at Citi estimate it will wipe 12% from earnings.