Italy has approved a one-time 40% tax on profits earned by banks from rising interest rates and plans to use the money to help mortgage holders, sending bank stocks tumbling.
The sharp rise in official interest rates has brought record profits to banks as lenders have been able to increase the cost of loans without raising deposit rates.
Countries such as Spain and Hungary have already taxed the sector exorbitantly.
From 2023 alone, Italy will tax 40% of banks’ net interest margins – the income earned by banks from the difference between loan and deposit rates.
Rome expects to get about 3 billion euros ($3.29 billion) from the measure, sources close to the matter said.