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Germany ends partial ban on short-selling

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Germany has ended a partial ban on short-selling it introduced during the height of the financial crisis in September 2008.

The German financial regulator BaFin said today that the ban, which expired on 31 January 2010 and was limited to 11 financial stocks including that of Deutsche Bank, Hypo Real Estate and Commerzbank, would not be renewed.

It explained its decision by saying that the situation in the financial markets has improved in the previous months “to the extent that it is not necessary to further extend the emergency measures taken by BaFin at the height of the financial crisis”.

However, it did say that it continues to monitor the developments in the financial markets and will issue new regulations concerning short selling should the situation deteriorate again.

The general aim of the September 2008 partial ban was prevent the short selling of certain types of financial stocks as it was thought this could give rise to excessive price movements, which could, in turn, jeopardise the stability of the financial system.

Categories: Leadership