German shorting ban . Sorry but we understand not.Our maverick friends in Germany (see the Credit Crunch Diary) have unilaterally introduced a ban on short selling of European Union government debt. The initial response by just about everyone that is not German (the consequence helps German exports) was outrage. The second response is “Sorry! – what?”
Paul Cluley, a partner at Allen & Overy said “There is a lot of confusion within BaFin (German market regulator) at what they have banned and what they haven’t … It’s clear that these rules came as almost as much surprise to them as to the rest of the market.”
Andreas Schmitz, head of the German banking industry’s lobbying group and of HSBC’s business in Germany said, “If you close a market, another one will open elsewhere.” Clemens Boersig, chairman of Deutsche Bank, added, “Policy makers should not do unilateral moves anymore.”
We would all do well to remember. Union is one thing. Germany another.
JGS-May 2010
