Italy looks to improve controversial windfall bank tax

The news: Italy’s economy minister has denied a heavily criticised new tax on bank profits is unjust but says the government is looking at ways to improve it.

The numbers: Italy's government last month dealt a surprise blow to the country's banks by imposing a one-off 40% tax on lenders' profits boosted by higher interest rates. It resulted in bank shares sliding on 8 August, forcing the government to tone down plans by saying it would amount to no more than 0.1% of their total assets.

The context: Almost a month since the shock announcement of the policy, the Italian government is still studying how to make the measure work. While analysts and policymakers have heavily criticised the new tax, warning it could put off international investors, economy minister Giancarlo Giorgetti this week defended the policy, saying it was a fair tax and the state had given a lot in the way of guarantees to the banking system.

What they said: "It may be that the tax is inappropriate, it can certainly be improved upon ... but I do not accept that it is considered an unfair tax," Giorgetti said.