Hedge Funds Politics & Regulation

Short selling ban created more volatility than financial crisis, says EDHEC


Last year’s short sale ban, which restricted shorting for about 1,000 stocks, created more volatility than the financial crisis it was implemented in reaction to, according to Abraham Lioui, a finance professor at EDHEC Business School in Paris.

Lioui says regulators over-reached in their decision to place a temporary ban on short selling, a move they failed to give good reasons for and which had little, if any, impact on the shares it was supposedly put in place to protect.

“The market reacted more strongly to the ban than did the stocks that were the object of the