by The government of Giorgia Meloni estimates that the measure will raise more than two billion euros, which will be used to reduce taxes and help the families most affected by the increase in mortgage loans
An unexpected decision that fell like a bomb on Italian banks, which quickly saw shares sink. The Italian government announced, in a decree law published before the holidays, that it will apply an additional rate of 40% on the extraordinary profits that banks obtain thanks to the increase in interest rates.
The move follows various criticisms from the government, led by Prime Minister Giorgia Meloni, who criticized banks’ resistance to raising interest rates on deposits, while continuing to raise index-linked rates on mortgages.
This is precisely where the measurement will focus, on the financial margin, which results from the difference between the interest received on the loans granted and the interest paid to savers for the sums they entrust to the banks.
The measure will start to apply in 2024 and will cover the years 2022 and 2023. In practice, all banks that have financial margins higher than the previous year will have to pay this commission.
Parliamentary approval is still missing, which should arrive within the next two months, but the government hopes that more than two billion euros can be raised with the measure.
Money which, according to the Italian Deputy Prime Minister, Matteo Salvini, will be used to reduce taxes and subsidize the most needy people in the payment of mortgages. This is what the Minister of Transport and Infrastructure also called “common sense”.
“It’s a congruent measure that will fuel tax cuts and support mortgages,” defended Matteo Salvini. “We are not talking about a few handfuls of millions, but billions,” he added.
The aim is to help families affected by the rise in interest rates, at a time when this value is already at 4.25%, and the European Central Bank has not yet taken for granted that the increases, main Community instrument for controlling inflation , have come to an end.
Banks Intesa Sanpaolo and UniCredit, Italy’s two biggest, saw their shares fall 8% and 6.5% soon after the announcement. State-owned Monte dei Paschi di Siena fell 7.4%, while Banco BPM, the third largest, fell 8.2%.
European banks are also reacting badly
European banks fell by around 3% shortly after noon, affected by the tax announced in Italy, but also by the downgrading of the debt rating of several North American entities by Moody’s.
Banks in Europe’s Stoxx 600 index lost an average of 2.75% during this time, with Italian banks leading the decline – Banca Popolare of Emilia-Romagna lost 9.25%.
None of the 40 banks in the index rose. FinecoBank followed, down 8%, while Intesa SanPaolo lost 7.81%, BMP 7.23% and Unicredit 6.43%.
Other institutions followed with smaller losses, such as Commerzbank, which fell 3.86%, while Bank Polska Kasa Opieki lost 3.84%.
Spanish banks led the losses on the national stock exchange, with Banco Santander down 3.33%, the biggest drop in the IBEX 35 index, Unicaja down 2.98%, BBVA down 2.78%, Bankinter by 2.24% and CaixaBank by 1.98%.
At 12:00 p.m. in mainland Portugal, on the Lisbon Stock Exchange, the shares of BCP, the only bank belonging to the PSI, led the losses and fell 4.46% to 0.24 euro.
The banking sector also suffered from the decision to downgrade the debt of several American institutions by the rating agency Moody’s.
