- Title: SPAIN: Country imposes short selling ban
- Date: 13th August 2011
- Summary: MADRID, SPAIN (AUGUST 13, 2011) (REUTERS) INTERIOR OF SPANISH STOCK EXCHANGE BUILDING CALENDAR INSIDE STOCK EXCHANGE BUILDING READING 12 AUGUST, FRIDAY PEOPLE AT THE STOCK EXCHANGE SCREENS DISPLAYING VALUES MAN AT STOCK EXCHANGE ELECTRONIC BOARD DISPLAYING VALUES SCREEN DISPLAYING VALUES STOCK EXCHANGE MAN AT STOCK EXCHANGE VARIOUS OF MAN LOOKING AT SCREENS MAN LOOKING AT SCREEN STOCK EXCHANGE INTERIOR OF X-TRADE BROKERS COMPANY VARIOUS OF X-TRADE BROKERS' HEAD OF SALES, ALEXANDER HICK, WORKING (SOUNDBITE) (Spanish) X-TRADE BROKERS' HEAD OF SALES, ALEXANDER HICK, SAYING: "The main reason is to try to stop the volatility of the markets, the hysteric moves that we have seen in the last sessions and overall to try to stop wild decreasing moves. Thus they try to restrict short positions. By short positions we understand positions that favour the decreasing of the markets." HICK AT WORK (SOUNDBITE) (Spanish) X-TRADE BROKERS' HEAD OF SALES, ALEXANDER HICK, SAYING: "One aspect is the consequence that it should have and the other is the consequence that historically these kinds of measures have had. The idea is to slow down the fall in values of a critical component, as the finance sector could be considered at this moment. The reality is that we've seen similar movements in Australia and the United States in 2008 for example and Germany in 2010, and the result has always been the opposite of the desired effect, I mean, more falls. I think that the market doesn't like changes in the rules and that creates distrust in the market and the result often is quite negative." VARIOUS OF PEOPLE WORKING AT X-TRADE BROKERS
- Embargoed: 28th August 2011 13:00
- Keywords:
- Location: Spain, Spain
- Country: Spain
- Topics: Business,Economy
- Reuters ID: LVACF4B6KV7UJN9GUX9UXON0CY62
- Story Text: The Spanish stock market opened positively on Friday (August 12) after the introduction of a ban on short-selling by four European countries.
Spain, France, Italy and Belgium imposed the ban which came into effect on Friday, but the detail will vary for each country, the European Securities and Markets Authority (EMSA) said in a statement late on Thursday (August 11).
European markets have repeatedly moved on rumours about the health and funding needs of indebted euro zone governments, and more recently on some of its major banks, which have sent shares tumbling.
Alexander Hick head of X-trade Brokers said that the ban was a bid to prevent volatility.
"The main reason is to try to stop the volatility of the markets, the hysteric moves that we have seen in the last sessions and overall to try to stop wild decreasing moves," he said.
"Thus they try to restrict short positions. By short positions we understand positions that favour the decreasing of the markets," he added.
Recent turmoil in the markets drove up European banks' borrowing costs to levels not seen since the 2007-2009 global credit crisis, and raised fears of a repeat that could seize up the arteries of global finance.
But Hick said he believed the measure would not manage to stabilise the market.
"The idea is to slow down the fall in values of a critical component, as the finance sector could be considered at this moment. The reality is that we've seen similar movements in Australia and the United States in 2008 for example and Germany in 2010, and the result has always been the opposite of the desired effect, I mean, more falls," said the finance expert.
The groups on which short trading is banned include Santander, BBVA, Sabadell, Bankinter, Banco Popular, Banca Civica, Banco de Valencia, Banesto, Banco Pastor, Bankia, Caixabank, CAM, Grupo Catalana de Occidente, Mapfre, BME and Renta 4. - Copyright Holder: REUTERS
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