The FSA has released a report on short selling and, to our way of thinking, the renewed interest (did it ever fade?) in regulatory intervention is worrying. From the report:
Clearly, the most radical option for constraining short selling would be to impose a complete or partial ban.This section considers the various prohibition options and their associated costs and benefits; a prohibition would only be justified where we are satisfied that there are net benefits.
Of course, several less intrusive options for "potential constraints" are discussed. Time will tell if these are merely window dressing.