EU watchdog defends Greek short selling ban
The head of Europe's top securities watchdog has defended an extension of a ban on the short selling on five Greek banks, as the state of the debt-mired country's financial system still poses a risk to financial markets.
Steven Maijoor, who heads the European Securities and Markets Authority (ESMA) told CNBC the situation in Greece is "very exceptional" and the ban was given the go-ahead by the European watchdog as the threat of deeper instability in markets is still an issue for Greece.
The broad criterion (for the ban) is whether there is a threat to financial stability. The fact that it is also only Greece shows how exceptional the measure is," he said. He warned of continuing risks of instability to the Greek financial system.
The emergency measure was extended as of Tuesday this week until the first week in December in an effort to give Greece some breathing space with its recapitalization efforts.
ESMA said the re-capitalization of Greek banks could be more difficult and more costly in the face of heightened market volatility, which would be exacerbated by short-selling, or betting that the price of a security will fall.