Alessandro Beber – Short Selling Bans Around the World

Mon, 2011-04-25 19:59

Alessandro Beber – Short Selling Bans around the world
 
Moments after our short selling debate at the 2011 London Forum*, I grabbed each of the academics for a quick chat about their most relevant research into this topic. This is the first of a three part series of videos, kicking off with Alessandro Beber paper – "Short Selling Bans around the world: Evidence from the 2007-2009 Crisis."
 
This is THE paper when it comes to rigorously assessing the effect of all the short selling bans. Despite former SEC head, Christopher Cox subsequently admitting that he regrets the ban he implemented, you still need to see the evidence to support his (and most people’s) instincts that it didn’t work. Watch the video of my interview with Alessandro. He is able to point to 3 areas where a ban on short selling was most detrimental to orderly markets:

  • A proven detrimental effect on liquidity, especially in smaller companies;
  • A reduction on the speed of price discovery;
  • Finally and paradoxically, the bans did not stop the prices continuing to fall!

Visit www.dataexplorers.com/sites/default/files/Short Selling Bans around the world and their impact.pdf to download Alessandro Beber’s paper, “Short Selling Bans Around the World: Evidence from the 2007-2009 crisis.”
 
The full Data Explorers archive of research into short selling can be accessed at: www.dataexplorers.com/research.
 
*The Academic debate will continue at our New York Securities Financing Forum next month: Thursday, May 26th at the Four Seasons in NYC.  Register today: www.dataexplorers.com/newyork.