Italy proposed a bank tax to help people with interest rate hikes. The move sent stocks plunging

The Italian finance ministry is defending a proposed 40% tax on some bank profits as being in line with “already existing rules in Europe on extra bank margins.” The ministry said in a statement Tuesday that regardless the contribution from the new tax can't exceed 0.1% of total bank assets. The statement was issued after Italian bank stocks plunged following the announcement that the Cabinet had approved a proposal to apply a temporary tax on some 2023 bank profits. Transport Minister Matteo Salvini announced the tax at a Monday evening news conference. He said that it was a measure of “social equity” to make up for a series of interest rate hikes from the European Central Bank.