Tagged: Bonds all-time high

Greece crisis: Short-selling banned on Greek markets

BBC News | Wednesday, 28 April 2010 | 07:53 GMT

Greek regulators have announced a ban on short-selling on Greece’s stock market, following steep falls in bank shares. The ban is designed to prevent investors betting on falls in share prices – believed to undermine confidence in the market. On Tuesday, Greek bank shares fell 9% amid continued concern over Greece’s public finances. The move also follows big falls in Asian markets on Wednesday. Japan’s leading share index, the Nikkei 225, closed down more than 2.5% after steep falls in European stocks on Tuesday. Shortly after opening on Wednesday, stock markets in Frankfurt and Paris were both down by a further 0.5%. The short-selling ban, designed to stabilise the market, only affects stocks listed in Greece, however. Global shares have tumbled after the credit rating agency Standard and Poor’s downgraded Greek debt to "junk" on Tuesday. That means the rating agency views Greece as a much riskier place to invest, and increases the interest rate investors will charge the Greek government for loans.

‘No restructure’

On Wednesday, that interest rate hit 10.13% for 10-year Greek bonds – another all-time high for a eurozone country. Meanwhile plans to secure a bail-out for the Greek economy will continue later, with the International Monetary Fund (IMF) arriving in Berlin to urge German MPs to agree to a rescue deal. Dominique Strauss-Kahn will travel to Germany along with the president of the European Central Bank, Jean-Claude Trichet, to persuade politicians that giving Greece billions of euros in aid is a "last resort". Progress on a deal to bail out Greece may also help to steady investors’ nerves. During a visit to Tokyo on Wednesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis. He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt.   

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