Should short selling be banned during periods of market turmoil?

Michael D. Mckenzie*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

During times of market turmoil, market regulators are often called upon to ban short selling. This paper considers a number of arguments commonly used to justify banning, which revolve around issues of volatility, stability, market abuse and settlement disruption. A literature review focusing on the 2008 period provides little evidence to support these arguments against short selling, suggesting that regulators should be circumspect when considering any future bans.

Original languageEnglish
Pages (from-to)1-8
Number of pages8
JournalJASSA
Volume3
Issue number2
Publication statusPublished - 2012

Keywords

  • Equities market
  • Regulation
  • Securities lending
  • Short selling

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