Italy's bank tax brouhaha barrels on

Italy's shock tax on banks continues to prove controversial, even as the government insists it can improve it.

Europe's main bank stock index fell almost 3% on Aug. 8, after the Italian government announced plans to impose a 40% windfall tax on banks' profits. The move caught traders off guard and sent shockwaves throughout the continent.

The market reaction and wide-spread backlash pushed Rome to tone down the plans within 24 hours.

Nearly a month later, the government is still studying how to make the measure work — but analysts and policymakers remain criticial.

"It's a very stupid law," Carlo Calenda, national secretary of the Azione political party, told CNBC over the weekend.
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Brothers of Italy, the leading party in the ruling coalition government, however, is of the opinion that lenders have not passed through higher rates to savers.

The latest set of bank results in Europe show that lenders across the region are enjoying higher levels of profitability as interest rates keep rising.

Italy's Economy Minister Giancarlo Giorgetti said at Ambrosetti that the bank tax "can certainly be improved upon...but I do not accept that it is considered an unfair tax," according to Reuters.
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Zed said:

Take money from the devil, and he will want it back at some point, with interest.

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Goldhedge said:

Kind of sounds Mafia-like....

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