- Title: SPAIN: Country imposes short selling ban
- Date: 13th August 2011
- Summary: FRONT PAGES OF EL PAIS, ABC AND EL MUNDO NEWSPAPERS EL PAIS HEAD LINE READING: "EUROPE PROTECTS THE BANK FROM THE SPECULATIVE MOVES IN THE STOCK MARKET." EL MUNDO NEWS PAPER READING: "SPAIN, BELGIUM, FRANCE AND ITALY PROTECT THEIR BANKS FROM SPECULATION." ABC NEWS PAPER READING: " SPAIN BANS SHORT SELLING TO ARM THE BANK"
- Embargoed: 28th August 2011 13:00
- Location: Spain, Spain
- Country: Spain
- Topics: Business,Economy
- Reuters ID: LVA7DVBFOM9M5LAEIH8FQTDMS4OT
- 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.
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