ECB Says Italy Windfall Tax May Hit Banks’ Attractiveness (3)

The European Central Bank warned of potential negative side effects from a controversial windfall profit tax on banks introduced by the Italian government.

“The extraordinary tax may make attracting new equity capital and wholesale funding more costly for banks, as domestic and foreign investors may have less appetite to invest in Italian credit institutions,” the ECB Governing Council said in an opinion published on its website Wednesday.

The statement adds a powerful voice to a chorus of opponents to a tax adopted by the Italian government in mid-August. The Italian bank lobby ABI said in a statement yesterday that ...