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MARKETS: Euro four put ban on short-selling stocks

FOUR European countries have brought in a ban on short-selling financial stocks in an attempt to restore confidence in market trading.

The European Securities and Markets Authority said Belgium, France, Italy and Spain would bring in the ban, which would vary in detail from country to country.

The announcement follows days of heavy speculation and widespread dumping of bank stock.

Investors were particularly concerned about the health of French banks, which are heavily exposed to peripheral European countries at the centre of the region's debt crisis.

But reaction to this move has been mixed with experts warning that the ban could create confusion and the plan may well fail.

Investors said the reaction reminded them of the chaotic days after the 2008 collapse of Lehman Brothers, when the UK Financial Services Authority shocked the world by imposing an emergency ban on short-selling financial stocks.