France, Italy, Spain and Belgium imposed the ban, the European Securities and Markets Authority said in a statement late on Thursday.
European markets have repeatedly moved on rumors about the health and funding needs of indebted euro zone governments, and more recently on some of its major banks.
“It‘s one of those things that politicians grasp for when they have no other tools left in their arsenal,” said James Angel, an associate professor specializing in financial market regulation at Georgetown University. “All it really does is kicking sand in the ears of the market and signals to the world that the leaders are clueless as to what’s going on.”
European regulators had previously played down the idea of a blanket ban on short selling, through which an investor borrows shares and sells them on the expectation their price will fall and they can be bought back at a lower price.
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