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Spain, Italy Ban Short Selling To Slow Market Turmoil

This didn't work the first time so why do they think it'll work this time?! Don't they know that some funds will not go long if they can't go short?! Let the market attempt to price so that investors gain gauge the trade-off of risk versus return themselves. These types of actions only exacerbate the problem.

Spain, Italy Ban Short Selling To Slow Market Turmoil

Italy's Consob prohibited the practice on 29 banking and insurance shares for one week, citing "grave tensions" in financial markets.

* Spain bans short-selling on all stocks for 3 months

Last year's ban in Spain, put in place on Aug. 11, coincided with a 10 percent gain for the financial stocks it covered. The IBEX rose 6 percent in the period. The stocks have fallen 40 percent since the ban was lifted on Feb. 15 this year, according to a basket compiled by Bloomberg.

Italy reinstates short selling ban

Consob said the ban on banking and insurance stocks would be effective immediately and remain in place until July 27.