2023-08-09 18:06:35
Unmitigated rectification of the Italian Government in its plans to impose a 40% tax on the extraordinary profits of banks. The Executive led by the far-right Giorgia Meloni has been forced to reverse its plan after the stock market earthquake that the decision caused on Tuesday in listed entities.
More than the measure itself, what investors did not like at all was the regulatory uncertainty that a measure taken without prior notice generates. Local banks saw almost 10,000 million euros of their stock market value evaporate in just a few hours. So Meloni has no choice but to modify the proposal and, finally, the tax may not exceed 0.1% of the entities’ assets. As indicated by the Ministry of Finance on Tuesday night, this will ensure that banks “do not have a significant impact as a result of the rule.”
Regulatory uncertainty
Despite everything, doubts are still present in the market. “This tax, like the one already implemented in Spain, fosters legal uncertainty in the sector and we remember that Spanish entities, despite having paid it, have appealed it to the courts,” explains Íñigo Isardo, director of account management Link Securities retailers.
In addition, important details are still unknown, such as whether there will be exceptions to the rule for banks that have transferred the rise in interest rates to the remuneration of deposits. The Ministry of Finance, commanded by Vice President Matteo Salvini, argued that this is one of the reasons for the new imposition. And that according to updated data from the European Central Bank (ECB), Italy is the third country that best pays individuals. Specifically, banks pay an average of 3.4% for one-year deposits, only behind Estonia’s 3.6% and France’s 3.5%.
Far below are countries like Spain, with an average remuneration for families of 2.22%. Of course, the country’s entities have made a notable leap compared to the figures that the statistics registered in May, and which stood at 1.64%. Despite everything, the gap with the average for the euro zone, where the average interest is 2.7%, is still notable.
Beyond punishing entities that do not improve their deposits, the measure announced by the Italian government also has an ambitious tax collection objective to finance new aid for mortgagees affected by the rise in the Euribor. The local media suggest that the volume would move in a range of between 2,000 and 2,500 million euros.
market reaction
For now, what the Italian government has achieved is to appease the markets, although there is still a long way to go to recover everything lost on Tuesday. The Italian stock market recovered 1.3% at the close, compared to the 2% left in the previous session. Entities such as Fineco Bank or Banco BPM rebounded 7% and 5.5%, respectively, after falling around 10% on Tuesday.
The increases spread to the rest of the sector in Europe. In Spain the advances were more moderate, with BBVA and Sabadell leading the sector with increases of more than 1%. CaixaBank gained 0.94%, while Santander -the most punished of the previous day- limited its rise to 0.75%. The rebound, although slight, allowed the Ibex-35 to advance another 0.57% at the close to 9,354 points.
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