The Italian authorities has launched a shock 40% windfall tax on the income made by banks from excessive rates of interest.
Ministers mentioned they deliberate to make use of the proceeds to assist mortgage holders – however mentioned 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.
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Italy’s right-wing cupboard, which agreed to the measure late final evening, has accused the nation’s banks of raking in document income this 12 months off the again of upper lending charges, whereas failing to cross them on to savers.
Intesa Sanpaolo mentioned final month it anticipated to make greater than €13.5bn (£11.6bn) this 12 months from its web curiosity margin alone.
Deputy prime minister Matteo Salvini mentioned: “One has only to look at banks’ first-half profits… to realise that we are not talking about a few millions, but 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 actually not doubled.”
The tax will apply to the web curiosity margin, a measure of what revenue banks acquire from the hole between lending and deposit charges.
Citi analysts calculated the tax might wipe practically a fifth off Italian banks’ web revenue this 12 months. Sources mentioned the federal government expects to gather €3bn (£2.6bn) from the measure.
It additionally follows complaints from the Italian authorities over the European Central Bank’s (ECB) determination 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 additionally been gradual to cross on larger charges to savers, however there was no indication that ministers will introduce an identical tax right here.
The Bank of England elevated rates of interest for 14th time in a row to five.25% final week and warned charges have been more likely to stay excessive as a part of efforts to convey down inflation.
The Financial Conduct Authority has warned it’s going to “take action” 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 Money, which has known as for larger taxes on banks within the UK, mentioned on social media that it was “delighted” and urged ministers to comply with go well with.
Source: information.sky.com”