Joint Trades Letter on European Short Selling Bans
May 14, 2020
On May 13, MFA, AIMA, FIA, and WFE sent letters to Austrian, Belgian, French, Greek, Italian, and Spanish financial regulators advocating against the renewal of short selling bans in their jurisdictions. The letters draw on empirical evidence from this crisis to demonstrate the ineffectiveness of the short sale bans. On average, stocks “protected” by the bans have underperformed and markets as a whole in these countries have underperformed markets in countries that have not instituted short sale limitations (ie. Germany).