What other governments can learn from Italy’s windfall tax saga

The political response to rising bank profits should focus more on debt distress than on deposit rates and taxation.

Italy’s new windfall tax on banks comes as many governments are searching for a political response to the spectacle of rising bank profitability at the same time as rising consumer pain, partly on the back of higher borrowing costs.

Italy is not the first country to have announced a new tax on higher bank profits since central banks started to hike rates last year, nor is the introduction of these taxes restricted to the left or right politically.

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