Short-selling ban and cross-sectoral contagion: evidence from the UK
The UK’s Financial Services Authority (FSA) introduced a ban on the short-selling of specified financial-sector stocks in September 2008. The regulator’s stated objectives were to protect market quality, stabilize the market for financial-sector stocks, and prevent cross-sectoral contagion. We analy...
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| Format: | Proceeding Paper |
| Language: | English English English |
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2012
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| Online Access: | http://irep.iium.edu.my/28464/ http://irep.iium.edu.my/28464/1/Short_Selling_Ban_and_Cross_Sectoral_Contagion.pdf http://irep.iium.edu.my/28464/2/Azhar_MFA_New_Orleans_Acceptance_letter.pdf http://irep.iium.edu.my/28464/3/MFA_2012_Preliminary_Program_as_of_1-4-12-1.pdf |
| _version_ | 1848779968971014144 |
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| author | Mohamad, Azhar Jaafar, Aziz Goddard, John |
| author_facet | Mohamad, Azhar Jaafar, Aziz Goddard, John |
| author_sort | Mohamad, Azhar |
| building | IIUM Repository |
| collection | Online Access |
| description | The UK’s Financial Services Authority (FSA) introduced a ban on the short-selling of specified financial-sector stocks in September 2008. The regulator’s stated objectives were to protect market quality, stabilize the market for financial-sector stocks, and prevent cross-sectoral contagion. We analyse the price, market quality and contagion effects following the imposition of the short-selling ban, and its removal in January 2009. We report evidence consistent with a short-lived overpricing (underpricing) effect immediately after the ban was imposed (lifted). There is evidence of deterioration in market quality while the ban was in force. There is evidence of cross-sectoral contagion from the financial sector to the telecommunication sector immediately prior to the imposition of the ban, but there is no contagion for seven other non-financial sectors. There is no evidence of contagion while the ban was in force. |
| first_indexed | 2025-11-14T15:26:13Z |
| format | Proceeding Paper |
| id | iium-28464 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English English |
| last_indexed | 2025-11-14T15:26:13Z |
| publishDate | 2012 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-284642021-07-23T07:20:00Z http://irep.iium.edu.my/28464/ Short-selling ban and cross-sectoral contagion: evidence from the UK Mohamad, Azhar Jaafar, Aziz Goddard, John HG4501 Stocks, investment, speculation The UK’s Financial Services Authority (FSA) introduced a ban on the short-selling of specified financial-sector stocks in September 2008. The regulator’s stated objectives were to protect market quality, stabilize the market for financial-sector stocks, and prevent cross-sectoral contagion. We analyse the price, market quality and contagion effects following the imposition of the short-selling ban, and its removal in January 2009. We report evidence consistent with a short-lived overpricing (underpricing) effect immediately after the ban was imposed (lifted). There is evidence of deterioration in market quality while the ban was in force. There is evidence of cross-sectoral contagion from the financial sector to the telecommunication sector immediately prior to the imposition of the ban, but there is no contagion for seven other non-financial sectors. There is no evidence of contagion while the ban was in force. 2012-02-24 Proceeding Paper NonPeerReviewed application/pdf en http://irep.iium.edu.my/28464/1/Short_Selling_Ban_and_Cross_Sectoral_Contagion.pdf application/pdf en http://irep.iium.edu.my/28464/2/Azhar_MFA_New_Orleans_Acceptance_letter.pdf application/pdf en http://irep.iium.edu.my/28464/3/MFA_2012_Preliminary_Program_as_of_1-4-12-1.pdf Mohamad, Azhar and Jaafar, Aziz and Goddard, John (2012) Short-selling ban and cross-sectoral contagion: evidence from the UK. In: Sixty-First Annual Meeting of the Midwest Finance Association, 22 - 25 February 2012, New Orleans, USA. (Unpublished) http://www.midwestfinance.org/documents/MFA%202012%20Call%20for%20Papers.pdf |
| spellingShingle | HG4501 Stocks, investment, speculation Mohamad, Azhar Jaafar, Aziz Goddard, John Short-selling ban and cross-sectoral contagion: evidence from the UK |
| title | Short-selling ban and cross-sectoral contagion: evidence from the UK |
| title_full | Short-selling ban and cross-sectoral contagion: evidence from the UK |
| title_fullStr | Short-selling ban and cross-sectoral contagion: evidence from the UK |
| title_full_unstemmed | Short-selling ban and cross-sectoral contagion: evidence from the UK |
| title_short | Short-selling ban and cross-sectoral contagion: evidence from the UK |
| title_sort | short-selling ban and cross-sectoral contagion: evidence from the uk |
| topic | HG4501 Stocks, investment, speculation |
| url | http://irep.iium.edu.my/28464/ http://irep.iium.edu.my/28464/ http://irep.iium.edu.my/28464/1/Short_Selling_Ban_and_Cross_Sectoral_Contagion.pdf http://irep.iium.edu.my/28464/2/Azhar_MFA_New_Orleans_Acceptance_letter.pdf http://irep.iium.edu.my/28464/3/MFA_2012_Preliminary_Program_as_of_1-4-12-1.pdf |