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Short-Selling Regulation and the Development of the Stock Markets

Author

Listed:
  • MiloÈ™ Marius Cristian

    (West University of Timisoara)

  • MiloÈ™ Laura Raisa

    (West University of Timisoara)

Abstract

The purpose of the paper is to take into discussion the benefits, as well as the negative effectsthat regulation might trigger for the development of the stock markets, focusing on the case ofshort-sale transactions. The paper outlines the regulatory changes that were made in this respectfor the European Union countries in the aftermath of the 2007-08 financial crisis. Alongsidereviewing the most significant empirical papers which have approached the connection betweenbanning or short-selling disclosure requirements and stock market quality, the authors investigatewhether the current regulation brings more benefits than costs to the European financial markets.

Suggested Citation

  • MiloÈ™ Marius Cristian & MiloÈ™ Laura Raisa, 2018. "Short-Selling Regulation and the Development of the Stock Markets," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 470-475, July.
    • Handle: RePEc:ovi:oviste:v:xviii:y:2018:i:1:p:470-475
    as

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    References listed on IDEAS

    as
    1. Lensberg, Terje & Schenk-Hoppé, Klaus Reiner & Ladley, Dan, 2015. "Costs and benefits of financial regulation: Short-selling bans and transaction taxes," Journal of Banking & Finance, Elsevier, vol. 51(C), pages 103-118.
    2. Alves, Carlos & Mendes, Victor & Silva, Paulo Pereira da, 2016. "Analysis of market quality before and during short-selling bans," Research in International Business and Finance, Elsevier, vol. 37(C), pages 252-268.
    3. Diamond, Douglas W. & Verrecchia, Robert E., 1987. "Constraints on short-selling and asset price adjustment to private information," Journal of Financial Economics, Elsevier, vol. 18(2), pages 277-311, June.
    4. Charilaos Mertzanis, 2017. "Short selling regulation, return volatility and market volatility in the Athens Exchange," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 34(1), pages 82-104, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    regulation; short-selling; liquidity; stock exchange;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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