(MENAFN) The declaration by the Italian administration of a one-time windfall tax on bank earnings caused the nation's banking stocks to plummet on Tuesday, wiping off a few €10 billion (USD11 billion) from their overall price.

Intesa Sanpaolo, Italy's largest bank, and Finecobank, which concentrates on online brokerage, were both down 8 percent by midday, while BPER Banca was down 10 percent. Banco BPM shares fell 9 percent in Verona, while UniCredit fell 7 percent. The FTSE MIB in Italy sank 2.6 percent, as the Stoxx Europe 600 index dipped 0.7 percent.

The extreme move by the Italian government sent shockwaves throughout the nation, with Germany's Commerzbank plunging approximately 3 percent and Deutsche Bank trading 2 percent less.

Earlier, Italian Deputy premier Matteo Salvini informed media that the 40 percent charge on excess bank profits generated by greater interest rates will be used by the authorities to decrease taxes and offer financial assistance to first mortgage holders.

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