Were the European short selling bans of 2011 effective?

Jani Saastamoinen () and Niko Suhonen ()
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Jani Saastamoinen: University of Eastern Finland
Niko Suhonen: University of Eastern Finland

Economics Bulletin, 2013, vol. 33, issue 3, 1847-1851

Abstract: Regulators in Belgium, France, Italy and Spain issued a short sales ban on financial stocks to contain volatility in August 2011. This paper uses a quasi-experimental approach to assess the ban's effectiveness. Control groups in the study are the ADRs of the banned financial stocks and their European peers. Using differences-in-differences and differences-in-differences-in-differences methodologies to measure differences in volatility, our results suggest that the ban was ineffective in containing volatility.

Keywords: Short selling restrictions; financial markets regulation; volatility; quasi-experiment; differences-in-differences estimation (search for similar items in EconPapers)
JEL-codes: G1 G2 (search for similar items in EconPapers)
Date: 2013-07-16
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