Ah well if Italy is doing it, we all should. They manage their economy famously well. Do the banks get a "windfall subsidy" when they have bad years?
Oh won't somebody think of the banks?
Where were you in September 2008?
Italy shocks banks with 40 percent windfall tax for 2023
11–20 of 74 posts
Re: Italy shocks banks with 40 percent windfall tax for 2023
#12so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?
What has happened across the banking sector is that net interest margins have improved because rates charged on loans have moved up more quickly than rates paid on deposits. That might yet be offset by higher credit losses but it's too early to know. In any case, it's expected that deposit rates will catch up (in fact they already are starting to) and net interest margins will continue to shrink a bit from where we are now.
However, there is also an argument that across the system, bank net interest margins were actually abnormally low for much of the period of zero/sub-zero interest rate policy. Essentially there are two reasons for this:
- There was a pretty effective zero (or close to zero) bound on the interest rates they could pay on deposits. Even before rates were negative this would have compressed net interest margins as banks typically paid below the policy rate on much of their deposit base historically.
- Large amounts of central bank liquidity added to the system (through all the various programmes - LTROs etc) allowed weaker banks to fund themselves more cheaply, leading in turn to lower interest rates charged on lending than a market without this additional liquidity would have led to
In a way, you can see this in the fact that the stock market consistently priced banks at a meaningful discount to book value for a long period of time.
The effects of this net interest margin compression were also not spread evenly across the sector. Weaker banks arguably suffered from these effects much less than stronger banks and perhaps even saw a net benefit.
Re: Italy shocks banks with 40 percent windfall tax for 2023
#13Ah well if Italy is doing it, we all should. They manage their economy famously well. Do the banks get a "windfall subsidy" when they have bad years?
> Do the banks get a "windfall subsidy" when they have bad years?
Is that sarcasm? Cause yeah, they generally do…
Re: Italy shocks banks with 40 percent windfall tax for 2023
#14so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?
It also implies a booming, healthy economy where more people want money to start businesses. Also, you can choose your tyrant. If the bank you're at offers you shitty deals, switch the bank. Nobody forces you to accept bad deals. By the way, do you have time to talk about this amazing money-doubling service I've created?
What if the banking system is dominated by an oligopoly (the situation throughout most of Europe) and they are all offering the same deal?
> money to start businesses
What proportion of bank lending is that? Close to insignificant.. Pretty much all small businesses/low collateral loans are backed by governments which are already pure profit for the banks
Re: Italy shocks banks with 40 percent windfall tax for 2023
#15Earlier quoted context omitted.
It also implies a booming, healthy economy where more people want money to start businesses. Also, you can choose your tyrant. If the bank you're at offers you shitty deals, switch the bank. Nobody forces you to accept bad deals. By the way, do you have time to talk about this amazing money-doubling service I've created?
> It also implies a booming, healthy economy where more people want.money to start businesses Lol, have you ever been to Italy...? Banks will not lend to you unless you're quite rich already. Catholicism says debit bad , and the country is pretty conservative as a whole. Italian banks making money implies two things: them screwing consumers (famously called literally "available cattle", il parco buoi , in local finan…
What does that have do with Religion? Most banks everywhere behave the same way..
Re: Italy shocks banks with 40 percent windfall tax for 2023
#16so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?
In Europe banks give 2-2.5% on deposits these days while real inflation is in double digits, at least.
When US banks give double the yield on deposits you know something's off.
Re: Italy shocks banks with 40 percent windfall tax for 2023
#17Ah well if Italy is doing it, we all should. They manage their economy famously well. Do the banks get a "windfall subsidy" when they have bad years?
"Emergency Economic Stabilization Act of 2008" - https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...
"Congress approves $700 billion Wall Street bailout" - https://www.nytimes.com/2008/10/03/business/worldbusiness/03...
July 20, 2008 -> "...it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation..." - Henry Paulson
November 20, 2008 -> "...We are working through a severe financial crisis caused by many factors, including government inaction and mistaken actions, outdated U.S. and global financial regulatory systems, and by the excessive risk-taking of financial institutions..." - Henry Paulson
Re: Italy shocks banks with 40 percent windfall tax for 2023
#18Ah well if Italy is doing it, we all should. They manage their economy famously well. Do the banks get a "windfall subsidy" when they have bad years?
You mean a bank that is "too big to fail" and has to be bailed out?
No, never happened as far as I can remember.
Re: Italy shocks banks with 40 percent windfall tax for 2023
#19so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?
In Europe banks give 2-2.5% on deposits these days while real inflation is in double digits, at least. When US banks give double the yield on deposits you know something's off.
That's not true. You can easily get, in Italy, over 4% on 12mo-locked saving accounts (random comparison website : https://www.confrontaconti.it/conto-migliore/miglior-conto-d... ), and Italy inflation right now is around 6%.
Re: Italy shocks banks with 40 percent windfall tax for 2023
#20Earlier quoted context omitted.
> It also implies a booming, healthy economy where more people want.money to start businesses Lol, have you ever been to Italy...? Banks will not lend to you unless you're quite rich already. Catholicism says debit bad , and the country is pretty conservative as a whole. Italian banks making money implies two things: them screwing consumers (famously called literally "available cattle", il parco buoi , in local finan…
What does that have do with Religion? Most banks everywhere behave the same way..
Islam forbids interest, so religion kinda has something to do with banks. But capitalism uh.. finds a way