Merkel’s ‘Distortive’ Shorting Ban Failed, IMF Says

Germany’s unilateral ban on some kinds of naked short-selling failed to achieve the government’s aim of keeping asset prices from falling and succeeded only in impeding markets, the International Monetary Fund said.

“Market efficiency and quality in fact deteriorated substantially following the introduction” of short-selling bans in Germany and other European Union countries, the Washington- based IMF said in a report published yesterday and posted on the fund’s website.