Friday, August 12, 2011

Bank Bet Ban: 'EU govts debt at breaking point'

After a choppy week for Europe's stocks, four Eurozone countries have resorted to methods, unseen since the 2008 crisis, to try and calm markets. France, Italy, Spain and Belgium have decided to ban short-selling on the shares of banks and other financial companies. The practice sees investors selling borrowed stocks that are expected to fall in price, before buying them back and keeping the difference. Short-selling has been blamed for increasing recent market volatility.

Meanwhile, France has been battling speculation it was going to lose its AAA score, which was finally reaffirmed by ratings giants on Wednesday. Investors, however, remain unconvinced the country's finances are solid enough. Recent figures show stagnation in growth, while the banking sector's been battling health rumours. Jan Hagen, from the European School of Management and Technology, says it's the banks that are once again being offered protection.

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