Thu, Nov 27, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

EDHEC-Risk Institute lists weight of evidence on effects of short selling and high frequency trading

Wednesday, February 27, 2013

Beverly Chandler, Opalesque London: Frédéric Ducoulombier, Director of Executive Education, EDHEC-Risk Institute and Director, EDHEC Risk Institute–Asia comments on the proposed restrictions on trading which have been thrown up by the global financial crisis in this month’s Edhec-Risk newsletter. Ducoulombier reflects on the academic studies which have concluded that short sellers contribute positively to market efficiency. "Research that has been undertaken by Securities and markets regulators around the world introduced bans on short-selling at different stages of development of the recent crisis, purportedly to halt price falls, reduce volatility and, in the words of former chairman of the Securities and Exchange Commission Christopher Cox, 'restore equilibrium to the markets’" Ducoulombier writes.

"These hasty decisions were not only devoid of theoretical basis, but also flew in the face of empirical evidence. Academic studies, including work by EDHEC-Risk Institute researchers, had documented the positive contribution of short-sellers to market efficiency and shown that constraining short sales significantly reduced market quality – by reducing liquidity and increasing volatility – and could have unintended spillover effects."

In a series of articles published or forthcoming in leading academic journals, EDHEC Business School Professor Ekkehart Boehmer, w......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Unlucky Paulson & Co. rebrands $1.6bn Recovery Fund after 13% drop[more]

    From Businessweek.com: A maturing U.S. economic recovery is prompting Paulson & Co. to change course. The $19 billion hedge fund firm, led by billionaire John Paulson, told investors on a conference call this month that the Paulson Recovery Fund will be renamed Paulson Special Situations Fund on Jan

  2. Opalesque Roundtable: Islamic Finance races ahead with Sukuk, the first managed account platform, and foreign demand[more]

    Komfie Manalo, Opalesque Asia: A number of developments took place within Islamic finance in the past years, including the launch of a Islamic managed account platform and the further growth of the sukuk space that saw this instrument evolve from being a type of an ABS security that was rarely

  3. CTAs , event-driven strategies lead hedge funds recovery in mid-November[more]

    Komfie Manalo, Opalesque Asia: November’s performance proves to be in sharp contrast to the previous month, with equities further consolidating their upswing last week, according to the latest Lyxor Asset Management’s Weekly Brief. CTA funds als

  4. Fund Profile - A complex hedge fund strategy works for United Technologies[more]

    From Institutionalinvestor.com: Reports that portable alpha is dead have been greatly exaggerated, as Mark Twain might have phrased it. Another Connecticut Yankee, giant United Technologies Corp., is gearing up to grow its successful, nearly decade-long portable-alpha program. The UTC strategy took

  5. Opalesque Exclusive: The unintended consequences of Basel III[more]

    Benedicte Gravrand, Opalesque Geneva: Bijesh Amin, co-founder and managing director of Indus Valley Partners (IVP), a technology solutions and services firm focused on the alternative asset management industry, has recently observed