Questionable usefulness of restricting short sales

To put a stop to this freefall, the market authorities of several developed economies (the UK, the US, France, Spain and others) banned the shorting of the shares of most financial institutions. The bans took effect in mid September and the length of the ban varied from country to country. In February 2009 some of these countries dropped the ban, while others kept it in place.

This episode in the life of the financial markets gives us a good opportunity to examine the importance of short selling

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