Will extending the short-selling ban on financial stocks cause even more suffering to hedge funds? Are Australian regulators determined to kill an industry which already faces record redemptions and falling hiring?
The Aussie prohibition is looking decidedly passé. Foreign countries are starting to bring back short selling and local banks (the supposed beneficiaries of the ban) remain well rated.
Hedge fund managers have been lining up against the extension, claiming that it undermines market liquidity and efficiency.
So isn’t it time to ditch the ban? Aren’t Aussie banks strong enough to survive a little bit of shorting? Help out the hedgies below.