12 Aug 2011

Four EU nations ban short-selling on bank stocks

12:35 pm on 12 August 2011

France, Italy, Spain and Belgium have banned short-selling on the shares of banks and other financial companies.

Short-sellers usually borrow shares or bonds, sell them, then buy them back when the stock falls - pocketing the difference.

The move by the four EU nations follows sharp gains and losses in bank stocks in recent days, especially in France, on fears about its exposure to euro zone government debt, the BBC reports.

Regulators have introduced the temporary ban to instill confidence in the markets.

Greece and Turkey have already imposed similar short-selling restrictions.