To tax income from gap in lending, deposit rates
Govt had criticised lenders for keeping deposit rates low
Banks have earned record profits in recent quarters

ROME, Aug 8 Reuters Italy dealt a surprise blow to its banks and sent shockwaves across the sector in Europe by setting a oneoff 40 tax on profits reaped from higher interest rates, after reprimanding lenders for failing to reward deposits.

Sharply higher official interest rates have yielded record profits for banks, as the cost of loans soared while lenders held off paying more on deposits.

Countries such as Spain and Hungary have already imposed windfall taxes on the sector and others may now follow suit.

Italian Prime Minister Giorgia Meloni39;s government had floated the idea earlier in the year, but appeared to have cooled on the plan.

A senior banking executive told Reuters that lenders had been ready for the chopping block, but then the axe didn39;t come down.

Since then, however, bumper firsthalf results from banks brought the issue back into focus and prompted the government to act on the eve of the summer political shutdown.

One government source said the move came as a surprise even to some ministers at Monday night39;s cabinet meeting. A second source made clear the government intended to punish banks39; unfair behaviour.

Lenders in Italy have passed on to depositors on average 12 of the rise in rates, versus 22 in the euro area, Jefferies calculated.

One has only to look at banks39;…