We examine the effect of the short-selling ban implemented in 2011 on Spanish stocks on the level of risk in the banking sector. Before the ban, short positions are found to be positive and significantly related to the creditworthiness of medium-sized banks, less internationally diversified and...

We examine the effect of the short-selling ban in 2011 on Spanish stocks on the level of risk in the banking sector. Before the ban, short positions were found to be positive and significantly related to the creditworthiness of medium-sized banks, these being generally less internationally...