Here we go again: just like the summer of 2011, when it achieved absolutely nothing but succeeded in increasing the panic to a fever pitch, Italian regulator Consob has just reintroduced a short selling ban for financial stocks. Supposedly, it will last only a week. Last year it was also supposed to be short-term but was only removed after the LTRO fooled everyone (well, not everyone) into believing Europe was fixed, which of course it wasn't [4]. Expect a modest blip higher, followed by the inevitable flush lower as every other European country follows suit, starting first with Spain.
From Consob: [5]
Consob: reintroduced the ban on short selling bank stocks and insurance
The measure immediately implement all week
The measure immediately implement all week
In view of recent trends in stock markets, Consob has today decided to reinstate the prohibition of short selling securities of the banking and insurance sectors listed in the annex.
The measure takes effect from 13:30 pm today, July 23, 2012, and remains in force throughout the week until 18:00 pm Friday, July 27
The prohibition applies both to short-selling securities backed by loans ("covered") and "bare", already banned by the previous resolution (No. 17993) 11 November 2011.
Intermediaries are required to take all necessary measures and precautions to strict compliance with the resolution.
The full text of the measure (Resolution no. 18283 of July 23, 2012) and the list of affected titles are available on site www.consob.it [6]
Rome, July 23, 2012