The naked crunch for short-sellers

The reaction to a ban on naked short selling introduced in Germany last month was probably not what the country’s regulator, the Bundesanstalt für Finanzdienstleistungsaufsicht (Bafin), or the German finance ministry had been expecting. The rules themselves, while initially vague, were narrow in scope and clearly meant for a domestic audience. Nonetheless, markets went into freefall, apparently spooked by a lack of co-ordination among European politicians. Equity markets across the globe sold