Italy Bans Short-Selling In Monte Paschi For Three Months, Forgets To Ban Buying Of CDS

Tyler Durden's picture

Yesterday we got the first sure sign that Italy's banking system is near collapse when in a flashback to the Greek financial crisis days of 2010-2011, Italy's bank regulator banned short selling in Monte Paschi shares for the day. Today, we can conclude that the Italian bank crisis is set to get far worse, because moments ago, Italy's banking regulator just announced that what was supposed to be just a temporary measure has been extended for the next three months and shorting in BMPS shares is now prohibited until October 5.

Consob bans for three months net short positions on Banca MPS shares - The prohibition shall apply from tomorrow 7 July 2016 until 5 October 2016 - It affects derivatives and market makers as well


Consob, with Resolution 19655 of 6 July 2016, decided to temporary prohibit net short positions on Banca Monte dei Paschi di Sienashares - BMPS (ISIN code IT0005092165).


The ban will be enforce for the next three months, from tomorrow 7 July 2016 (start of day) until 5 October 2016 (end of day).


The prohibition on net short positions strengthens and extends the ban to short selling adopted yesterday, as the new prohibition bans both short selling on BMPS shares and short positions taken though single stock derivatives on BMPS shares.


The ban applies to all transactions, irrespective of where they have been carried out (on an Italian or foreign trading venue or over-the-counter) and it affects market makers as well.


The ban does not apply to transactions in index-related instruments (e.g. FTSEMIB), taking into account the marginal weight of BMPS shares in financial indices.


The prohibition has been adopted pursuant to Article 20 of the EU Regulation on short selling, considering the negative price change recorded by the share in the last days and taking into account the positive opinion issued by ESMA on 6 July 2016.

Good luck with that:


While at it, Italy should probably also ban buying of CDS... just a thought.


And if that wasn't enough, Italy's prime minister, Matteo Renzi, took a page right out of the central banker playbook and in a desperate attempt to boost confidence, has gone the "opposite" route, by saying that Italian savers have no problems regarding banks:


The implication being that contrary to bank insolvency rumors, no bank run is coming any time soon.

He could have stopped there, but instead decided to make it far worse by comparing Italy with other just as insolvent European nations:


With that statement he will hardly win any empathy points from his fellow Europeans and certainly not from Angela Merkel, whose very own Deutsche Bank remains in dire straits.

The good news is that at least for the time being, the headline chasing algos have assumed this means either a bailout is coming or that things are perhaps getting better, and sent USDJPY to the day's highs, which as everyone knows by now, means the S&P 500 promptly follows.

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Looney's picture


The next page in the UK/EU playbook is “Start arresting/disappearing evil speculators”.

It worked fine for China a few months ago and, if it gets bad enough in the EU and UK, it will be used. AGAIN!!!  ;-)


Mr. Kwikky's picture

The Bullshit Meter reaches new highs!

knukles's picture

Wasssadamattath witcha you?
Youse a foregttha to abannna de ah C D S S
Stupide escargot
Wassadah goin' on?  De bankinga lady, she a givea you a tug, eh?

Mr. Kwikky's picture

Hey old yeller just pull out the bag of old horse shit we can use it as a toxic fertilizer.

Manthong's picture

Hey, if throats can accidently get crushed, then nail guns can accidently penetrate craniums.

I hear that carpentry is the most popular hobby for those in the banking industry.


Mr. Kwikky's picture

Well let's start with the coffins, REX-84 FEMA model.


JRobby's picture

"Laugh Track Deafening"

We have arrived at an era where only FUCKING IDIOT CLOWNS go into public service.

Passed along in school and university due to "family standing & lineage", they have never done a thing in their lifetime's. Their "breeding" is based in corruption. Their inbreeding guarantees weak minded, undisciplined, morally corrupt garbage that should be euthanized.

GadExp's picture

Well, this is silly!  Why didn't they just ban NOT buying long?

peddling-fiction's picture

Looney: Speculators may be next, cause dissenters and resisters have been and are actively gangstalked by the EU. I say this from personal experience. No fear and God Bless.

Squid-puppets a-go-go's picture

everything is awesome, i will stay in my banking stawx and sell at the top :)

hey, the Exit door seems to be receeding into the distance? HEY? STOP THAT DOOR

scintillator9's picture

Shooting oneself Seven or Eight times in the chest and head with a nail gun is clearly indicative of "suicide".


NotApplicable's picture

I wonder who's selling CDSes?

asteroids's picture

Since you can't short, and the ECB will never allow a "default", there's no risk to selling the CDS. Free money. Even if things go to hell, the guy selling the CDS will never be able to make you whole (ie AIG). What a scam.

KnuckleDragger-X's picture

You are not allowed to die without permission. It just amazes me they actually think this will help........

conraddobler's picture


You need to file the right forms to die.

No dying without the proper forms!

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Squid Viscous Jul 6, 2016 11:53 AM

Death to the Speculators...


skinwalker's picture

I left my 401k in the market as a bet on the off chance everything holds together. Haven't checked on it in years. I'd be ok with it reaching a value of zero. I have other assets that are more productive.

FrankieGoesToHollywood's picture

Actually it doesn't matter.  Your 401k will be siezed if it grows.  end result: you get squat regardless.

NotApplicable's picture

I looked at mine this morning for the first time in years, which is all in the closest thing to cash that they have. I still don't like any of the funds offered, but perhaps after the crash, I'll move half into the fund that is most like the S&P, as it's obviously the tail that wags the dog.

hedgeless_horseman's picture


ATM's picture

When it gets serious, you have to lie.

Volaille de Bresse's picture

See you tomorrow morning, 9 o'clock Euro time, bella!

Bam_Man's picture

The f**king stock is at 0.28 euro/share.

It's a little late to be banning short-selling.

Winston Churchill's picture

The strongest support is at 0.

Bank_sters's picture


Loved Renzi saying that European banks are worse than his.   Fucking brilliant!

mototard's picture

When it gets serious enough, you have to lie.....

Watson's picture


1. The share short-sale ban is far too late to make the price reverse much, but it may stay around current levels for a while because anyone unfortunate enough to still have a natural position won't want to sell it to crystallise a loss...particularly if it is a player without mark-to-market accounting, and further strengthen by the fact that the value of the position is now a rather smaller % of the value of the portfolio than it was a while ago.

2. Buying CDS is not an exact alternative to short-selling the shares. The legal wording of the 'event of default' clause, along with considerations as to what type of debt is referenced, make the situation much more complex - and dangerous.


JenkinsLane's picture

"Please disperse, nothing to see here."

Stu Elsample's picture

Time for Italians to turn those bankers and politicians into Mussolinis before their country goes full Venezuela

HelloSpencer's picture

So, how are people supposed to hedge their option positions?

ThrownOffZHTwice's picture
ThrownOffZHTwice (not verified) Jul 6, 2016 12:10 PM

Elites:  If we do not like the way the markets are acting, we just close the markets.

PT's picture

... while we try to think of new words to describe our thefts.  For some reason the muppets don't get angry if we use different words ...

ThrownOffZHTwice's picture
ThrownOffZHTwice (not verified) katchum Jul 6, 2016 3:12 PM

The chart suggests France is also having a mini-run.

Vlad the Inhaler's picture

Another fine example of free shit, welfare, and handouts for the 1%.

One-Eyed-Thong's picture
One-Eyed-Thong (not verified) Jul 6, 2016 1:34 PM

why did they do that?

is the system rigged ? ?

One-Eyed-Thong's picture
One-Eyed-Thong (not verified) One-Eyed-Thong Jul 6, 2016 1:34 PM

oh, and 


Bemused Observer's picture

Umm, guys? Why would anyone want to buy ANY instrument associated with that bank? They've pretty much just TOLD you if things go south for them, they will simply change the rules...

Now, in order for you to profit, things would have to go south for them, no?

Do you think it's possible that they might decide to change those rules yet again, rather than pay you?

oncemore's picture

Germany needs to be hurt.

Otherwise Merkel will dump all other countries into a  waste bin.

Davidduke2000's picture

Short selling is a fraud activity and should be banned. how can someone sell your property and influence its value be considered legal.

Your stocks and cattles or oranges or oil or gold or silver or any of your property can be sold infront of your eyes without your permission be legal??

Rigged system like everything else in the US who exported this fraud to other parts of the woorld as part of US style democracy that works with fraud and corruption.