Jan. 28 - Spain may end its ban on short-selling stocks and bonds this week as the euro zone crisis eases, although controls could remain for bank shares. The National Securities Market Commission has until Friday to decide whether to extend the ban. Ciara Sutton reports.
Euro zone optimism seems to be catching. Spain may end its ban on short-selling stocks and bonds this week as the crisis eases. The ban was imposed by the National Securities Market Commission, initially for six months. It has until Friday to announce whether it will extend the restriction. Stocks and bonds have rallied following an EU-financed rescue for Spain's troubled banks, and lenders are now finding it easier to raise funding on the markets. The IBEX blue-chip index has soared 40 percent since July and many Spanish stocks have hitched a ride on the reduction in Madrid's borrowing costs. But while sentiment has improved, Rabobank's Jane Foley says the banking crisis is far from over. (SOUNBITE) (English) SENIOR CURRENCY STRATEGIST AT RABOBANK, JANE FOLEY, SAYING: "What we do have right now is this view in the markets that things are healing and if you like that will buy more time for Spanish banks, more time for the regulator, and more time for the Spanish government too. So at the moment the better market tone is washing over a lot of the cracks, but certainly the cracks and the weaknesses within parts of the Spanish economy as in Greece, Portugal and Ireland too are still there." If Spain lifts the short-selling limitations, it'd following Italy, France and Belgium. It's only still restricted in Spain and Greece. The news comes as an IMF team is set to visit Spain to conduct its latest review of the country's financial sector. It's been monitoring the troubled banking system since last year, assessing the recapitalisation needed to restore it to health.