Greece bans short sales for third time

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The Independent Online

Short-selling will be banned on the Athens stock exchange for two months from today, Greece's financial regulator said in an effort to stem a stockmarket slump last night.

This is the third time since the eruption of the global economic crisis in 2008 that Greece has prevented short-term bets against its stocks as the debt-laden country struggles to avoid default.

The Athens market closed down 6 per cent on Monday at a fresh 14-year low, a fall nearly twice as steep as that seen by its European peers, after the US credit rating was downgraded after stock markets closed on Friday.

The Capital Market Commission announced the measure after the Athens general index dropped below the psychologically important 1,000 points level. Greek PM George Papandreou has repeatedly blamed speculators for exacerbating his country's woes.

Greece imposed its first short-selling ban from October 2008 to June 2009. The second lasted for four months and was lifted in September last year after Greece received its first EU/IMF bailout.

Analysts said the latest move could help reduce volatility in a stock market hit hard by the continuing sovereign debt crisis.