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Short Selling: A known unknown. ECMI Commentary No. 23, 29 May 2009

Cinquegrana, Piero. (2009) Short Selling: A known unknown. ECMI Commentary No. 23, 29 May 2009. [Policy Paper]

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    Abstract

    Fears of systemic meltdown following the collapse of Lehman Brothers in September 2008 led to uncoordinated regulatory interventions around the world to ban or restrict short selling, a technique that allows one to profit from falling stock prices. The suspicion that ‘bear raids’ were having a negative impact on stock prices in general and financial stocks in particular motivated these regulatory developments. The ban on short selling reignited a long-standing debate on this controversial technique. This ECMI Commentary explores three fundamental questions posed by short selling. The first issue is of a conceptual nature: Is short selling legitimate and, if so, is it beneficial for financial markets? The second issue is: What is the difference between naked and covered short selling? The third question is legal in nature: Is short selling consistently defined across jurisdictions?

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on and consequences/reforms
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > ECMI Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 27 Aug 2009
    Number of Pages: 6
    Last Modified: 17 Oct 2014 15:42
    URI: http://aei.pitt.edu/id/eprint/11447

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