European short selling bans extended
30 September 2011 London
Image: Shutterstock
Temporary short selling bans imposed after a dramatic sell off in global markets during the summer have been extended in Belgium, France, Italy and Spain.
The extensions are made while the eurozone debt crisis grips market commentary and European officials scramble to buy time before a Greek default by boosting the leveraging power of the EFSF from €440 billion to some €2 trillion, among other measures according to various media reports.
Italy and France extended the short selling ban until 11 November, with the French regulator, AMF, stating that it "will continue to monitor, in coordination with the European regulators concerned, the markets and their developments. [The AMF] may decide to lift the ban if market conditions allow it".
Belgium extended its ban indefinitely. Bloomberg reports the Spanish regulator confirming the ban will remain in place “until the market conditions allow it to be lifted”. Greece has extended its ban on short selling until 9 December.
Many market participants, frustrated by fragmentation of rules across European nations, question the wisdom of such bans, pointing to research suggesting the move reduces liquidity during times of stress and does little to achieve price stability.
The extensions are made while the eurozone debt crisis grips market commentary and European officials scramble to buy time before a Greek default by boosting the leveraging power of the EFSF from €440 billion to some €2 trillion, among other measures according to various media reports.
Italy and France extended the short selling ban until 11 November, with the French regulator, AMF, stating that it "will continue to monitor, in coordination with the European regulators concerned, the markets and their developments. [The AMF] may decide to lift the ban if market conditions allow it".
Belgium extended its ban indefinitely. Bloomberg reports the Spanish regulator confirming the ban will remain in place “until the market conditions allow it to be lifted”. Greece has extended its ban on short selling until 9 December.
Many market participants, frustrated by fragmentation of rules across European nations, question the wisdom of such bans, pointing to research suggesting the move reduces liquidity during times of stress and does little to achieve price stability.
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