France, Italy, Spain and Belgium are banning short-selling amid efforts to calm market turmoil that has sent bank shares gyrating wildly and aggravated worries about Europe’s huge debts.
The European Union’s markets supervisor, the ESMA, announced the move late on Thursday night after boosting surveillance of stormy markets earlier in the day.
The move capped two days of whipsaw trading that saw French banks’ market value fall and rise by billions of euros.
In a short sale, a trader hopes to make a profit by betting on the decline in the price of a share.
The practice has been blamed for contributing to market volatility.
The ESMA said in a statement that the four countries “have today announced or will shortly announce new bans on short-selling or on short positions” as of Friday.
The French market regulator, the AMF, announced late on Thursday that it is banning for 15 days net short-selling on 11 stocks, including those of banks Societe Generale, BNP Paribas and Credit Agricole and leading insurers.
Greece banned it on Monday but until Thursday, no other European countries had followed suit.
French bankers and officials scrambled to soothe investors’ nerves after days of suggestions that France could be the next major economy to lose its coveted triple-A credit rating.
By late in the day, those efforts appeared to have an effect, but economists said the rebound remained very fragile.
AFP
