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...
| Main Authors: | , , |
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| Format: | Proceeding Paper |
| Language: | English English |
| Published: |
2014
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/37106/ http://irep.iium.edu.my/37106/1/bafa_contagion__LSE_2014.pdf http://irep.iium.edu.my/37106/6/azhar.pdf |
| _version_ | 1848781352006057984 |
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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 | 2025-11-14T15:48:12Z |
| format | Proceeding Paper |
| id | iium-37106 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-14T15:48:12Z |
| publishDate | 2014 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-371062021-07-23T07:22:56Z http://irep.iium.edu.my/37106/ 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. 2014 Proceeding Paper NonPeerReviewed application/pdf en http://irep.iium.edu.my/37106/1/bafa_contagion__LSE_2014.pdf application/pdf en http://irep.iium.edu.my/37106/6/azhar.pdf Mohamad, Azhar and Jaafar , Aziz and Goddard, John (2014) Short-selling ban and cross-sectoral contagion: evidence from the UK. In: BAFA 2014 Annual Conference, 14-16 April 2014, London . (Unpublished) http://bafa.ac.uk/assets/files/Conference/Abstracts%20-%20Delegate%20Pack.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/37106/ http://irep.iium.edu.my/37106/ http://irep.iium.edu.my/37106/1/bafa_contagion__LSE_2014.pdf http://irep.iium.edu.my/37106/6/azhar.pdf |