ESMA, the independent markets regulator, does not have the power to impose a ban itself, but could organise action among European states.
The regulator is considering proposing a ban on all stocks, or just on financial stocks, states the NYT, citing two people familiar with the situation. A ban on naked short selling is also being considered, adds the paper.
‘We are discussing with national authorities and together we will decide whether we need coordinated action,’ says Victoria Powell, an ESMA spokesperson, reports the NYT.
Short selling bans, which were utilized by governments during the financial crisis in 2008, are making a comeback following the market volatility of the last two weeks.
Greece banned short selling for two months on Monday following steep declines in Greek stocks. The next day, South Korea announced its own three-month ban.
And today Turkey brought in new measures to curb short selling, reports Bloomberg.
[Article by Tim Human, Inside Investor Relations]