Germany just got a jump on everyone trying to find ways to tame equity markets, with the country’s Christian Democratic Union party telling Dow Jones’s Andrea Thomas that the country will ban naked short-selling starting at midnight.
German Chancellor Angela Merkel is to announce the ban tomorrow morning, Thomas reports.
Naked short-selling is perceived to be at the heart of the troubles around Greece obtaining reasonable rates in the credit markets during its financial crisis.
The implication seems to be that Germany is also seeking to protect against shorting of European government bonds and the Euro zone’s vulnerable banks.
The Financial Times’s Alphaville blog notes that Reuters is reporting the ban will apply to credit default swaps, as well as repos and futures on European bonds.
Alpha also informs us the German for short-seller is “Leerverk�ufer.” Bless you, Alpha.
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