Germany to ban some short selling: reports

Source: marketwatch

NEW YORK (MarketWatch) -- Germany will ban naked short-selling of some company shares and European government bonds, according to Reuters. Other reports said the ban will apply to certain credit default swaps as well, analysts said Tuesday. A lawmaker with the ruling Christian Democratic Union told Dow Jones Newswires that Chancellor Angela Merkel will announce the plan in her speech to the lower house of parliament Wednesday morning. In a regular short sale, the investor borrows the stock, sells it, and then repays the borrowed stock. The trader hopes to buy it at a cheaper price. In a naked short sale, the short-seller never borrows the stock in the first place.

Read more: http://www.marketwatch.com/story/germany-to-ban-some-short-selling-reports-2010-05-18-1452350

European Union finance ministers have agreed to introduce tougher regulation of the hedge fund industry.

Ministers overrode objections by the new UK government and the City of London, where 80% of European funds are based.

They will now negotiate with the European Parliament to decide the exact shape of the legislation - which is due to come into force from 2012.

http://news.bbc.co.uk/1/hi/business/10120925.stm

Even in regular short sales the investors will be expected to lodge funds to cover any possible losses in advance. They don't like then fine - don't deal.

Don't hold your breath. It should. It's obvious it should, but it won't happen.

That would take one of the key components away from market manipulation, and hell, that's as American as Apple Pie.

it should only happen in the USA because that way in future you'll only fuck yourselves.

:hi:

And the word "naked" is in the very first sentence. :)

Germany is to ban so-called "naked short-selling" at its 10 most important financial institutions.

Short-sellers usually borrow shares, sell them, then buy them back when the stock falls and return them to the lender keeping the difference in price.

"Naked" short selling occurs when a trader sells a financial instrument he has not yet borrowed.

The German ban will run from 19 May to 31 March 2011, also applying to naked credit default swaps.

http://news.bbc.co.uk/1/hi/business/10124174.stm

A four year low. I think this caused more panic than doing nothing.

wasn't the sole cause.

Then buy it back as a used BMW and give it back to the dealer keeping the difrence in price.

Did I miss any thing?