Capital controls in Italy not worth reporting

On February 13th Il Sole reported that Italian banks had been required by the government to withhold 20% of all incoming wire transfers to personal accounts, the so-called “ritenuta fiscale”. The banks would get to keep the loot until July 16th. Moreover, the measure would be applied retroactively starting Feb. 1st, presumably in order to make a catch those not in the loop. I guess this sort of retroactive application is only possible in a place like Italy, where no-one is surprised when banks take two weeks just to credit an account. [We can assume that the banks were privy to this information before it was published in the press, but that’s a detail.]

After a week of protests, on the 19th it was announced that the implementation of the measure would be delayed until July 2014, and that the funds confiscated thus far would be returned the following week.

Bank Bailout or Bail-In?As for the measure itself, while on the surface a nice sop to the banks, with a confiscatory policy like this in place, realistically not very many idiots are likely to be wiring large sums to Italy. So one has to wonder what the point was.

What is however perhaps more interesting is the fact that this whole affair went almost completely unreported outside of Italy.  As far as printed newspapers are concerned, if Google is to be believed, one of the few mentions was in a leading Austrian paper with a headline referring to the “strengthening of anti-money laundering measures in Italy”. That was about it.

What did get a lot of press was the supposedly dynamic leadership of Italy’s new 39-year old socialist prime minister. It seems that the new 20% tax was not worth even a mention.

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