Greece's finance ministry on Tuesday said it had lifted capital controls imposed in June on its stock market, but kept in place a short selling ban on the shares of its top banks. "Limitations on transactions on Greek capital markets are lifted," said a decree published in the government gazette late Monday.
Under the ban, the stock exchange operated normally for foreign investors, but local traders were unable to finance the purchase of securities by taking money from their bank accounts in Greece. However, the Greek capital market commmission said it was maintaining until December 21 a restriction on the short-selling of shares in the country's top five banks.
"The decision was reached, taking into account...the fact that the recapitalisation process of the Greek credit institutions is currently in progress," the commission said. Short-selling occurs when investors sell shares they do not own in anticipation of a fall in their price, hoping to make a profit in the process. This can fuel market volatility.The capital controls were imposed in June when fears of Greece being ejected from the eurozone caused a run on bank deposits.
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