Economics at your fingertips  

The Impact of the 2011 Short†Sale Ban on Financial Stability: Evidence from the Spanish Stock Market

Óscar Arce and Sergio Mayordomo ()

European Financial Management, 2016, vol. 22, issue 5, 1001-1022

Abstract: We examine the effect of the 2011 short†selling ban on Spanish stocks on the financial sector's risk level. Before the ban, short positions were positive and significantly related to several indicators of bank default risk. Subsequently, the ban moderated the risk of banking institutions, especially those more exposed to short†seller activity, which, on average, showed higher levels of maturity mismatch, uncertainty about their fundamentals, and exposure to sovereign risk. The ban also caused a side effect on non†financial firms, since it led to an increase in their exposure to short sales, reflecting the existence of a common aggregate risk factor.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1354-7798

Access Statistics for this article

European Financial Management is currently edited by John Doukas

More articles in European Financial Management from European Financial Management Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2020-08-01
Handle: RePEc:bla:eufman:v:22:y:2016:i:5:p:1001-1022