Banning short selling of regional bank stocks won’t solve their problems – Tradejee News

Proposals to ban short selling of regional bank stocks are a bad idea.

Though banning short selling has appeal to politicians who want to show that they’re doing something, it in fact is the functional equivalent of blaming the messenger for bearing bad news. The core problem that the financial system currently faces is balance-sheet weakness at regional banks, and banning short selling of their stocks does nothing to solve that weakness. In addition, short sale bans have other adverse consequences.

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