PM Meloni says shock bank tax her decision

Italy's Prime Minister Giorgia Meloni has assumed "full responsibility" for last week's contentious decision to impose a one-off bank tax, a move that has been blamed for causing lasting damage to her government's credibility with financial markets.

In comments published by Italian newspapers Corriere della Sera, La Repubblica, and La Stampa, Meloni clarified that the 40 percent levy placed on banks' extra profits was not intended as a punishment.

The new tax is aimed at the increased profits banks have generated from higher interest rates, with lenders accused of reaping billions in extra income.

"I would do it again because I believe that the right things must be done," she said in comments to Italy's three largest newspapers.

"This is a decision that I took on my own," Meloni said.

"It's a sensitive issue and I take full responsibility for it," she added.

The rightwing government's credibility with investors took a severe hit with the unexpected announcement on Aug 7 that sent shockwaves through financial markets, reported the Financial Times newspaper.

Italian bank stocks plunged up to 10 percent on the day it was disclosed that a tax on lenders' net interest income would be levied.

Only 24 hours later, the government backtracked in part, with Ministry of Finance announcing a cap on the levy that softened its effect on lenders' balance sheets.

The government said lenders would be taxed no more than 0.1 percent of their assets, a figure lower than original estimates by analysts, which had projected the cap might reach 0.5 percent.

Analysts figured that the cap would constrain collective payouts from some of Italy's largest listed banks, which account for about 50 percent of Italian deposits, to around 2.5 billion euros ($2.7 billion), instead of the earlier projections that went as high as 4.9 billion euros ($5.4 billion).

Partners within the Italian coalition government, such as Foreign Minister Antonio Tajani, of the liberal Forza Italia party, expressed surprise at the initial announcement on the tax, stating they were caught off guard, while financial analysts and bankers said that such a substantial decision should have been thoroughly discussed between the Treasury and lenders, instead of only within the prime minister's office, reported the FT.

Meloni acknowledged there were potential "issues" concerning the management of the announcement.

"I did not involve the coalition as much as usual because it was an issue that did not have to circulate too widely," she added.

"I have utmost respect for the banking system and I don't want to hit lenders, but there was an imbalance."

The Politico news website reported Meloni was urged toward the decision by more radical members of the coalition such as transport minister and far-right League party leader, Matteo Salvini, along with some members of Meloni's Brothers of Italy party.