Germany bans short selling of 11 top stocks
Following the example of the United States and Britain, Germany prohibited Saturday short selling of shares in banks till the end of this year, reported dpa.
Short selling, a form of futures trading where investors assume a stock will decline in value, has been seen as causing the steep fall in market capitalization that wiped out three of the world's most powerful banks.
BaFin, Germany's regulator of financial services, said in Bonn the prohibition applied to 11 bank and insurance stocks from the start of September 20 till the end of year.
The usefulness of the prohibition would however be continuously reviewed.
The Federation of German Banks welcomed the move as "a correct and important step."
The companies affected were Aareal Bank, Allianz, AMB Generali Holding, Commerzbank, Deutsche Bank, Deutsche Boerse, Deutsche Postbank, Hanover Re, Hypo Real Estate, MLP and Munich Re.
BaFin president Jochen Sanio said the prohibition was needed at the present time "because short selling can drive a company to ruin."