Finance minister intervenes on markets

The Netherlands is the latest country to ban so-called ‘naked’ short selling of shares in Amsterdam-listed financial institutions, including ING, Fortis, Aegon and Van der Moolen.

Finance minister Wouter Bos announced the three month ban on Sunday night to create stability on the financial markets.
‘We are taking this measure because we have seen recently that the market value of large financial institutions can drop very quickly and that such financial institutions can literally crash,’ Bos is quoted as saying in the International Herald Tribune.
This is the first time the Dutch government has intervened since the crisis began and Bos has always maintained that the Netherlands will not be affected.
But last week, the price of shares in Dutch-Belgian financial services group Fortis fell by as much as 20% on unfounded rumours that the company was planning a rights issue.
Short selling involves selling borrowed shares with the intention of buying them back cheaper. But the ‘naked’ variant entails selling these shares without first borrowing them.
The NRC reports on Monday that the Netherlands invented the practice of short selling back in 1609. The paper says Dutchman Isaac le Maire, a major shareholder in the Dutch East India Company (VOC), speculated on the depreciation of shares in the company and spread rumours to put further pressure on their value.
For more on that story, click here