Skeptics argue that many (if not most) companies harmed by naked short
selling suffer from performance problems or poor business models.
Eyebrows were raised earlier this year when the KNF approved a new regulatory framework that permitted naked short
selling for a number of securities traded on the WSE, but Szuszkiewicz asserts that the robustness of the measures put in place will protect market participants.
Schaeuble, in turn, angered his EU partners by going it alone and signing off on a ban on so-called naked short
selling of Germany's top financial stocks, euro zone government debt and credit default insurance contracts on that debt.
Global Banking News-19 May 2010-BNP says German ban on naked short
selling might not be effective without similar measures by the US(C)2010 ENPublishing - http://www.enpublishing.co.uk
As well as attracting 19 international brokers as remote trading members and introducing a new framework for naked short
selling, the WSE announced a strategic alliance with global exchange group NYSE Euronext earlier this year.
Goldman Sachs was censured for violating the SEC's Regulation SHO, whose requirements were implemented in September 2008 to regulate naked short
Most recently, Germany announced a ban on naked short
selling in May 2010.
In a response published on 12 July, the Association for Financial Markets in Europe (AFME), which represents investment banks, broadly supported the consultation but warned against a ban on naked short
selling as it "will not succeed in its aim of reducing volatility and could have the opposite effect".
"It is our intention to get this on the agenda of the finance ministers' task force meeting on Friday, aiming towards a European ban on naked short
selling," the Financial Times quoted a finance ministry spokesman as saying.
Members of the European Parliament's Committee on Economic and Monetary Affairs (ECON) have opted to ban the naked short
selling of sovereign credit default swaps (CDSs), where investors bet on the likelihood of government bond prices collapsing, ie a country going bust.
The introduction of naked short
selling for instruments listed on the Warsaw Stock Exchange (WSE) in July will "change the landscape" for participants in Poland's financial markets, according to the exchange's head of derivatives.
The latest solo intervention was performed by German financial markets regulator BaFin on 18 May, which banned naked short
selling on the shares of 10 German financial companies, and the uncovered short sale of European government bonds with credit default swaps in an attempt to curb speculation against eurozone countries and selected companies.