Industry Sector Weekly

Instead of calming the market’s concern around sovereign credit quality and a falling Euro, unilateral moves by German financial regulator BaFin prohibiting uncovered short selling of shares in ten German banks and CDS in eurozone country debts only contributed to increased equity volatility. German moves to curb short selling rattle markets

Instead of calming the market’s concern around sovereign credit quality and a falling Euro, unilateral moves by German financial regulator BaFin prohibiting uncovered short selling of shares in ten German banks and CDS in eurozone country debts only contributed to increased equity volatility. BaFin’s decision to act alone comes at a time when a broad range of financial sector regulation is being debated globally, raising questions around future multilateral coordination efforts for the sector, especially in Europe. Despite positive Q1 earnings results, the banking sector remains the worse performing industry component of the Stoxx 600, falling 11% year to date, weighed down by concerns around regulation and exposure to eurozone sovereign debt.

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