Amsterdam - Short selling on the Dutch stock exchange will be prohibited for the next three months, Dutch Finance Minister Wouter Bos announced early Monday on Dutch television.
Short selling is when investors sell stock they borrowed from its owners, speculating the stock will lose value. If indeed it does, they can repurchase the same stock cheaper, increasing their profits.
Short selling by investors is believed to have played an important role in the ongoing global credit crisis. The US, Britain and several other countries have also imposed a temporary ban on the practice.
It marks the first time since the global credit crisis began in the summer of 2007 that the Dutch government has actively intervened in Dutch markets.