On the effectiveness of banning short selling

The chart below is the index of stocks on the restricted list normalized to the time shorting stocks was banned. The highlighted area is the time period that the SEC did not allow short sales of specific stocks.

Source: Bloomberg, Palantir

A lot of the news stories about today’s market sell off focus on the lack of coordination between European regulators and panicking of the German regulators in particular.  Perhaps people were more worried about the past repeating itself.

Source: Bloomberg, Palantir