Italy sets 0.1% cap on windfall tax for banks after market rout

Apparent backtrack to fifth of level of assets analysts had estimated follows fall in shares on Tuesday

Italy has set a cap on its new windfall tax on banks in an apparent backtrack after the surprise announcement of the levy sent shares in the country’s lenders plunging.

Rome limited it to cover only 0.1% of total bank assets, a fifth of the level that analysts had earlier estimated the levy could reach, in an announcement late on Tuesday.