Hands-free short selling or not? Between tomorrow and Friday Consob, in agreement with the market authorities of France, Belgium and Spain, must decide whether or not to extend the ban on short selling adopted two weeks ago to cool the excesses of speculation on the Stock Exchange. It will depend on the evaluation that the four bodies, in turn coordinated by the ESMA (the European authority on the markets) make of the state of the Stock Exchanges and on the intensity of the volatility on the markets. In any case, whether or not short selling returns, the obligation to notify will remain in force: whoever does short selling has the duty to notify Consob of the operations performed.
The stock market authorities' intention to tighten the brakes and prevent not speculation but its excesses is confirmed by the step taken yesterday by Consob on the rating agencies. The Authority chaired by Giuseppe Vegas has not given a preliminary opinion in favor of the registration of the two major American agencies (Standard & Poor's and Moody's) with ESMA, the new European Market Authority. From a practical point of view, this doesn't change anything for now, but Vegas wants to see clearly the activity of the two rating agencies and has asked the rating lords to better clarify their procedures. These are signs that the institutions want, albeit belatedly, to react to the excessive power of the rating agencies and are preparing to tighten the bolts by improving the rules of the game.
