Reuters: Hedge funds shift target after short selling bans

31 August 2011

Hedge funds have raised their bets against financial stocks in the UK, United States and Germany as a short selling ban in four eurozone countries prompted them to focus elsewhere for ways to profit from the banking sector's difficulties.

Figures from Data Explorers show stock out on loan for financial stocks in the UK, US and Germany has risen strongly since August 12, when Spain, Italy, Belgium and France imposed shorting bans on certain financial stocks. The rise in short interest in UK banks also comes ahead of the Independent Commission on Banking's final report on September 12, when it is expected to back its interim proposals that UK banks should ring-fence their retail operations from riskier investment banking operations to protect taxpayers from future crises.

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