David Kirkpatrick

January 5, 2009

UK ends stock shorting ban

Filed under: Business — Tags: , , , — David Kirkpatrick @ 9:23 pm

The U.K. Financial Services Authority came to its senses and ended the idiotic ban on shorting financial stocks. This move punished a group without a hint of blame in the ongoing financial crisis and likely did some real harm to all markets.

From the link:

The short ban might already have caused longer-lasting harm by injecting doubt over the very rules of the game. To have maintained it in today’s less febrile environment would have made no sense, leading to less effective price discovery and wider spreads. After all, recent losses in financial stocks are the result of management and bulls getting carried away during the boom, not shorts profiting on the way down.