The Comisión Nacional del Mercado de Valores (CNMV) has decided to not extend the ban on short selling that expired on January 31, 2013 and has been in place since July 23, 2012. The ban was put in place because of extreme volatility that could have disrupted markets and, several months later, doubts about the effectiveness of financial reforms.
Short positions are not the cause of doubts and volatility, just indicators that those activities exist. The improving conditions seen during the past several months of the ban responds to the confidence that markets felt after Mario Draghi spoke highly of the steps that the euro zone has taken to achieve banking unity. Thankfully, CNMV president Elvira Rodríguez decided to let the markets operate freely.
