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Italy shocks banks with 40 percent windfall tax for 2023

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Re: Italy shocks banks with 40 percent windfall tax for 2023

#31

Post by bryanrasmussen »

ffhhttt wrote: post #29
bryanrasmussen wrote: post #21

Earlier quoted context omitted.

highly religious countries trend more conservative. Italy is a highly conservative country. Not sure if that explains their financial problems, probably not. on edit: An Italian coworker just pointed out he wouldn't say Italy was very conservative, which I guess in a lot of ways is true - especially when compared to U.S and some other countries. Maybe actually the 'Conservative' - 'Liberal' labeling doesn't work well…

I wouldn’t define Italy as highly conservative especially the north where most of economic activity is concentrated. If we did that we’d have to say that some Eastern European countries are “ultra” conservative. > Not sure if that explains their financial problems, probably not. I would say Switzerland is pretty conservative as well (if not more in some aspects but less in others)

yeah also there is a strong divide on this kind of thing between North and South, my experience is mainly Naples on down.

Re: Italy shocks banks with 40 percent windfall tax for 2023

#32

Post by gambiting »

olivierlacan wrote: post #22
TheFattestNinja wrote: post #19

Earlier quoted context omitted.

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%.

That's not comparable at all to 4.80% APY savings and checking accounts in the U.S. right now with far more flexible rules. This kind of return on ultra flexible accounts is basically unheard of in most of Europe in recent memory as far as I know (born & lived in Europe as recently as 2019). What you describe are called Certificate of Deposit (CDs) in the U.S. and you can get 5.50% for those in August 2023 [1]. [1]:…

If you define UK as Europe still, then yes, you can get an easy access(withdraw whenever you want) saving account with 5% interest without any issue. Or 6%+ if you're willing to lock the money for some time:

https://www.moneysavingexpert.com/savings/savings-accounts-b...

Re: Italy shocks banks with 40 percent windfall tax for 2023

#33

Post by chmod775 »

swarnie wrote: post #25
2Gkashmiri wrote: post #5

so.... 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?

My grasp of capitalist theory is somewhat lacking but is this the point where the invisible hand would conjure up a competitor whith lower rates and higher pay outs, taking business from the gouging banks?

Those gouging banks could immediately use their scale to undercut that competitor, killing it, then return to whatever they were doing.

Considering how much of an upfront investment (not just in pure cash, but also in agreements, infrastructure and operations) becoming anything more than a basic savings bank is, the risk is very great.

Likely existing players can go pretty far before before the risk/reward of creating a new bank checks out.

The real question is why those existing banks aren't trying to undercut each other. Maybe there's some pressure and risks that make them behave this way in the current economy, or maybe it's good old price fixing.

Re: Italy shocks banks with 40 percent windfall tax for 2023

#34

Post by globular-toast »

jahnu wrote: post #24

Already watered down to “ not exceed 0.1% of each bank’s total assets” https://www.theguardian.com/business/live/2023/aug/09/italy-...

That's a shame. They're absolutely terrified of knocking over the huge and comical house of cards, aren't they?

Re: Italy shocks banks with 40 percent windfall tax for 2023

#35

Post by pravus »

swarnie wrote: post #25
2Gkashmiri wrote: post #5

so.... 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?

My grasp of capitalist theory is somewhat lacking but is this the point where the invisible hand would conjure up a competitor whith lower rates and higher pay outs, taking business from the gouging banks?

No, you can't use "invisible hand" theories in the current economy because the hand is very visibly the government when it comes to bank monetary policy. Any claim that world economies are anything like the markets Adam Smith envisioned would be completely thrown out the window after 2008. They were already on very tenuous grounds.

Or maybe another way to look at it this: the invisible hand of force is yet another invisible hand operating in the markets.

Re: Italy shocks banks with 40 percent windfall tax for 2023

#36

Post by memefrog »

greydius wrote: post #3
memefrog wrote: post #2

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?

Yes, but we call them bailouts.

The "bailouts" where the government bought shares in the banks and was repaid at a significant markup a few years later?

Is that like "windfall taxes" where the banks buy shares in the government and get repaid later?

Re: Italy shocks banks with 40 percent windfall tax for 2023

#37

Post by memefrog »

belter wrote: post #17
memefrog wrote: post #2

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?

"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 -> "...W…

The US got paid back and then some. Not at all the same as an arbitrary ad-hoc tax on success.

Should the Silicon Valley banks that have recently failed also pay a windfall tax? And if not, why tax success? Because it's clearly not a 'windfall' if it only goes to people that made good predictions and not ones that made bad predictions.

Re: Italy shocks banks with 40 percent windfall tax for 2023

#38

Post by Lolaccount »

Kiro wrote: post #23

This feels like the type of thing that every single person will cheer on but will have disastrous indirect effects that are hard to understand.

Oh, please ... I know bankers in my personal network actively boasting about how they're managing to the play the situation with interest rates to maximise profit without doing anything productive to achieve it.

"We've never had it so good" ...

Next up, the energy sector.

Re: Italy shocks banks with 40 percent windfall tax for 2023

#39

Post by memefrog »

swarnie wrote: post #25
2Gkashmiri wrote: post #5

so.... 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?

My grasp of capitalist theory is somewhat lacking but is this the point where the invisible hand would conjure up a competitor whith lower rates and higher pay outs, taking business from the gouging banks?

Competition relies on the ability for new players to enter the market. That's very difficult in highly regulated industries like banking. Some of those regulations exist for good reasons. Many of them are not. For example, there is no evidence that the US-pushed anti-money-laundering rules that every country has been essentially forced to adopt have resulted in any reduction of criminal activity, anywhere, ever. I'm not exaggerating when I say that. Nobody has ever demonstrated their effectiveness in stopping crime, which was what we were told they would do. And they're a huge compliance cost for banks, worldwide.

It's not really fair for the state to impose huge regulatory hurdles that make competition impossible and then for leftists to go 'hurr but what about the invisible hand meme now???', when that obviously relies on FREE MARKETS, which we increasingly do not have.

Re: Italy shocks banks with 40 percent windfall tax for 2023

#40

Post by memefrog »

chmod775 wrote: post #33
swarnie wrote: post #25

Earlier quoted context omitted.

My grasp of capitalist theory is somewhat lacking but is this the point where the invisible hand would conjure up a competitor whith lower rates and higher pay outs, taking business from the gouging banks?

Those gouging banks could immediately use their scale to undercut that competitor, killing it, then return to whatever they were doing. Considering how much of an upfront investment (not just in pure cash, but also in agreements, infrastructure and operations) becoming anything more than a basic savings bank is, the risk is very great. Likely existing players can go pretty far before before the risk/reward of creatin…

They do undercut each other. Interest rates respond directly to interest rate changes from central banks and commercial savings banks operate on thin margins. It is not price fixing for people to make large profits.
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