The Italian government is accommodating the banks when it comes to the excess profits tax. They will also likely take advantage of this opportunity.
Imposing a special tax on the additional profits of banks – the announcement of the Italian government under Prime Minister Giorgia Meloni at the beginning of August alone was enough to push the prices of the country’s credit institutions to a sharp decline. On Thursday, Parliament in Rome passed a law allowing most banks to increase their capital reserves instead of paying excess profits to the finance minister.
The amendment now stipulates that banks can be tax-exempt if they use 2.5 times the tax due to enhance their Tier 1 capital ratio of common stock. Rossella Locatelli, a professor of banking and finance at the University of Insubria near Milan, said raising capital was “by far the best option” for the country’s banks.
Several bank presidents, including Luigi Lovaglio of Banca Monte dei Paschi di Siena, which has been bailed out several times by the state, and Nicola Calabro of South Tyrol’s savings bank, Casa di Risparmio di Bolzano, have indicated that they would prefer to keep the bank. . The money is transferred to the government.
The government backed down
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