No short-selling on Dutch stock exchange

22nd September 2008, Comments 0 comments

The Dutch government intervenes for the first time since the global crisis to impose a temporary ban on short selling on the Dutch stock exchange.

22 September 2008

AMSTERDAM -- Short selling on the Dutch stock exchange will be prohibited for the next three months, Dutch Finance Minister Wouter Bos announced early Monday on Dutch television.

Short selling is when investors sell stock they borrowed from its owners, speculating the stock will lose value. If indeed it does, they can repurchase the same stock cheaper, increasing their profits.

Short selling by investors is believed to have played an important role in the ongoing global credit crisis. The US, Britain and several other countries have also imposed a temporary ban on the practice.

This is the first time since the global credit crisis began in the summer 2007 that the Dutch government has actively intervened in Dutch markets.

So far, the Dutch government has always said the credit crisis is a foreign, not a Dutch problem.

Last week, the Dutch stock exchange dropped dramatically, but recovered somewhat on Friday.

[dpa / Expatica]

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