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August 12, 2011 at 05:06 AM
Markets seemed to have regained some of their appetite for risk on Friday as European shares rose. Part of the reason was a ban on the short selling of stocks put in place Thursday night by some euro zone countries.
France, Italy, Spain, and Belgium acted to prevent short sales of bank stocks effective Friday. There is already such a temporary ban in place in Greece and Turkey.
A statement from the European Securities and Markets Authority (ESMA) said in part regarding the action, “Today some authorities have decided to impose or extend existing short-selling bans in their respective countries. They have done so either to restrict the benefits that can be achieved from spreading false rumors or to achieve a regulatory level playing field, given the close interlinkage between some E.U. markets.”
French banks are taking a further step by looking into legal action concerning rumors pervading the markets about their creditworthiness, according to the French Banking Federation. Reuters reported that in a statement, the Federation said, “Given the unfounded rumors which have persistently circulated on the markets, the French banks are examining other options available to them, including legal.”
