Banking

Italian government softens shock bank windfall tax in bid to calm market turmoil

The country’s biggest lenders are scrambling to claw back gains after a detrimental day of trade on Tuesday

Italian Prime Minister Giorgia Meloni: Shares at major Italian banks plunged after the government’s surprise announcement late Monday of a 40 per cent levy on lenders’ extra profits.Picture: Getty

The Italian government backtracked on part of its new windfall tax on banks, saying it would introduce a cap to limit the impact for many lenders as it tries to calm a market rout that wiped out $10 billion from the banks’ market value.

It comes as the country’s biggest lenders are scrambling to claw back gains after a detrimental day of trade on Tuesday.

The levy now won’t exceed 0.1 per cent of a ...