The Netherlands is the latest country to ban so-called ‘naked’ short selling of shares in financial institutions.

Finance minister Wouter Bos announced the three month ban on public tv on Sunday night to create stability on the financial markets. The ban came into effect at midnight.
‘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 this morning’s International Herald Tribune.
‘If you are not careful (such collapses) endanger the whole financial system,’ he added.
Monday’s Volkskrant quotes the minister as saying ‘these are not normal times’. He goes on to say: ‘We do not want to give speculators any room to drive down share prices for whatever reason.’
In a statement, the finance ministry said the financial markets watchdog AFM will oversee the ban.
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.
A number of countries including the US, Britain, France and Germany has already banned the practice.
For an explanation of short selling, click here