'Much Ado About Nothing': Short Selling Ban Effectiveness on Bank Stock Prices

Aliano, M.

;Galloppo, G.;Abdelmoneim, Y.

2014-01-01

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Abstract

Most regulators around the world reacted to the 2007-09 crisis by imposing bans on short selling. Using data from seven equity markets, this study empirically examines the impact of the 2008 short-selling bans on financial stocks. Using panel and matching techniques, evidence indicates that bans on short-selling (i) on the whole widen volatility both in terms of High-Low spread and GARCH analysis, (ii) were not able to reduce systematic risk, (iii) overall failed to support prices. On the whole our results are in line with previous literature.