Germany About to Extend Short Selling Ban

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Just when you thought the market was starting to calm down, the Germans have to go and ban naked short selling on every stock traded on their exchanges. Like last time, the move is only going to spread fear and won’t do jack shit to stop market losses.

Whether you support naked short-selling or not, it doesn’t matter. Now doesn’t seem like the best time to mess with the markets. Plus, Germany’s move is only going to piss off its EU counterparts again, at a time when they need to be working together to fix their fiscal problems. Last time the Germans banned shot sales, they managed to piss off France - not exactly the biggest opponent of financial regulation.

These people said that a draft bill now being circulated in the German capital would ban market participants from selling certain securities without owning them, or having an option to buy them, at the time of the “naked” sale.

The proposals would also be extended to some euro currency-derivatives, these people said. Berlin would also seek to make more transparent who was selling securities short and in what volume.

Berlin Poised to Extend Short Selling Ban [FT.com]

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Germans Ban on Naked Short-Selling Just Fueling More Fear

Say “auf Wiedersehen” to naked short selling in Germany. Because of “exceptional volatility” in euro-area government bonds and credit-default swaps, massive short-selling was leading to excessive price movements which “could endanger the stability of the entire financial system,” Germany’s BaFin financial services regulator said today.