“Short-selling was not the reason bank share prices were under pressure and banning it has not relieved that pressure,” commented Andrew Baker, chief executive of the Alternative Investment Management Association, a hedge fund lobby group.
Germany has stated that it will not broaden its long-standing short-selling restrictions. Martin Dobson, head of trading at Westhouse Securities, remarked that traders were shorting Germany’s DAX prior to Germany’s announcement, fearing they would be unable to short DAX futures, reports David Brett for Reuters.
European stocks and the euro currency also experienced a precipitous decline on fresh rumors of a possible downgrade to Germany’s triple-A rating, according to FXStreet. However, CNBC reported that three major rating agencies denied any change to Germany’s sterling sovereign debt credit rating.
- iShares MSCI Germany Index Fund (NYSEArca: EWG)
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Max Chen contributed to this article.