Italy’s financial stocks tumbled, losing roughly €10 billion ($11 billion) from their combined market value after the government announced there would be a one-off windfall tax applied to bank profits which have soared due to rising interest rates.

Intesa Sanpaolo, the largest bank in Italy, and Finecobank, which focuses on online brokerage, both had lost 8% by the afternoon, as BPER Banca was down 10%. Banco BPM, based out of Verrona fell 9% while UniCredit dropped 7%. Italy’s FTSE MIB dropped 2.6%, as the Stoxx Europe 600 index fell 0.7%.

After the Italian government made its announcement, the ripples spread outward to other countries, such as Germany, where Commerzbank fell roughly 3.2% and Deutsche Bank dropped 2%.

In a statement, Italian Deputy Prime Minister Matteo Salvini told journalists that the government would levy a 40% tax on windfall bank profits which were derived from rising interest rates, and that the revenues raised from the tax would be used to reduce the taxes on citizens and offer financial assistance to the holders of first mortgages.

He said, “One only has to look at the banks’ first-half 2023 profits, also the result of the European Central Bank’s rate hikes, to realize that we are not talking about a few million, but we are talking, one can assume, of billions.”

He went on, “If the cost of money burden for households and businesses has increased and doubled, it has not equally doubled what is given to current account holders.”

The tax will be applied to “excess” net interest income from the years 2022 and 2023, which was the result of higher interest rates. It will be applied on net interest income above 3% year-on-year growth in 2022 over 2021 levels, and exceeding 6% year-on-year growth for 2023 compared to 2022.

Local media outlet ANSA reported that it is expected that the tax may bring in over €2 billion ($2.2 billion).

Banks have until six months after the end of the financial year to pay the tax.