Italy takes bold action with 40% windfall tax on banks

Posted on August 14, 2023   |  

Italy surprises banks, sets 40% one-time tax on profits from higher interest rates, aiming to boost deposit rewards.

Higher official rates lead to bank profit surges as loans rise, and deposits stagnate.

Eurozone bank shares drop 4.5% in response, echoing the March turmoil during the Credit Suisse collapse.

Italian PM Meloni's government revisits tax after strong H1 bank results, acts before summer pause.

Tax ripples beyond Italy, affecting Spain's Banco Santander and Germany's Deutsche Bank.