The Italian government has introduced a surprise 40% windfall tax on the profits made by banks from high interest rates.
Ministers said they planned to use the proceeds to help mortgage holders - but said it was a one-off levy to be applied this summer.
The announcement sent banking shares tumbling. Italy's largest chain Intesa Sanpaolo was down 8% on Tuesday morning, while rival UniCredit dropped 6.5%.
It comes following the introduction of similar taxes in Spain and Hungary - and amid calls for the UK government to do the same.
Italy's right-wing cabinet, which agreed to the measure late last night, has accused the country's banks of raking in record profits this year off the back of higher lending rates, while failing to pass them on to savers.
