European bank shares dropped significantly in August after a surprise announcement from the Italian government for a new tax.
Stefano Montesi – Corbis | Corbis News | Getty Images
Italy’s shock tax on banks continues to prove controversial, even as the government insists it can improve it.
Europe’s main bank stock index fell almost 3% on Aug. 8, after the Italian government announced plans to impose a 40% windfall tax on banks’ profits. The move caught traders off guard and sent shockwaves throughout the continent.
The market reaction and wide-spread backlash pushed Rome to tone down the plans within 24 hours.
Nearly a month later, the government is still studying how to make the measure work…