2023-10-07 09:22:04
The Italian government is accommodating the banks when it comes to the excess profits tax. They will probably also take advantage of the opportunity.
A special tax on banks’ extra profits – the announcement by the Italian government under Prime Minister Giorgia Meloni at the beginning of August alone was enough to send the prices of the country’s credit institutions plummeting. On Thursday, the parliament in Rome passed a law that allows most banks to increase their capital buffers instead of paying excess profits to the finance minister.
The adjustment now stipulates that banks can be exempt from tax if they use 2.5 times the levy owed to strengthen their common equity Tier 1 capital ratio. Increasing capital is “by far the best option” for the country’s banks, said Rossella Locatelli, a professor of banking and finance at the University of Insubria near Milan.
Several bank bosses, including Luigi Lovaglio of the Banca Monte dei Paschi di Siena, which has been bailed out several times by the state, and Nicola Calabrò of the South Tyrolean savings bank Cassa di Risparmio di Bolzano, have already indicated that they would rather keep the money than transfer it to the government.
Government backpedaled
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