NEWS

Bloomberg correspondent Rainer Buergin (August 17, 2010)
reports that the International Monetary Fund concluded that “Germany’s unilateral ban on some kinds of naked short-selling failed to achieve the government’s aim of keeping asset prices from falling and succeeded only in impeding markets.

“Market efficiency and quality in fact deteriorated substantially following the introduction” of short-selling bans in Germany and other European Union countries, said in a report published yesterday and posted on the fund’s website.

The ban by Chancellor Angela Merkel’s government, issued by the BaFin regulator overnight on May 19, “did relatively little to support the targeted institutions’ underlying stock prices, while liquidity dropped and volatility rose substantially,” it said