BANNED: Italy’s market watchdog imposed a week-long ban on short-selling financial stocks as the Milan index plunged nearly 3 percent amid fears that if Spain needs a bailout, Italy could be next. A similar ban imposed last summer expired in February.
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BET ON DECLINE: In a short sale, investors sell stock that they do not own, betting that they can buy it back at a lower price. Short-selling of shares has been blamed for driving down markets during the financial crisis.
NO MONEY LEFT: World markets were rattled by fears that Spain — which has already sought a bailout for its banks — could need a government bailout. That would stretch Europe’s financial resources and leave no money for Italy, which has the eurozone’s third-largest economy and trails only Greece in its debt as a percentage of its economy.
