German shorting ban is 'reckless and draconian' - M&G

clock

Germany's ban on naked short-selling in European sovereign debt, as well as shares in its 10 largest financial institutions, has sent shockwaves through global markets today. Here, M&G's Stefan Isaacs explains why the action appears to be largely symbolic and politically driven.

At this stage the details are very limited but it appears that the German supervisory body BaFin has banned the "naked" short selling of eurozone sovereign bonds, their credit default swaps, and the shares of ten leading German financial institutions. The ban was effective as of midnight last night. This move by the German authorities has had the effect of spooking already fragile markets. As we have discussed before markets do not like a lack of transparency and these actions appear to be draconian and uncoordinated. The fact that the ban was announced after the European market close...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Europe

FundCalibre's Schooling Latter: The shifting sentiment in Europe

FundCalibre's Schooling Latter: The shifting sentiment in Europe

Portfolio picks

Juliet Schooling Latter
clock 27 March 2024 • 4 min read
Timing of ECB rate cuts in doubt as core eurozone inflation measure disappoints

Timing of ECB rate cuts in doubt as core eurozone inflation measure disappoints

Services price inflation remains sticky

Valeria Martinez
clock 01 February 2024 • 1 min read
Eurozone inflation rises to 2.9%

Eurozone inflation rises to 2.9%

Driven by energy prices

Elliot Gulliver-Needham
clock 05 January 2024 • 1 min read
Trustpilot