The changes to the Code of Market Conduct promised tomorrow morning by the FSA will make interesting reading. As several of our regulars have rightly suggested elsewhere, it may not be as easy as all that.
In particular, it remains to be seen whether they will try to stop share-price swaps (spread-betting can be viewed as a form of this), which are contracts between consenting adults that have nothing whatsoever to do with actual share certificates etc etc, merely the availability of transparent and authoritative prices against which to make the difference-payments. Oh - and the availability of credit, of course - but that's another point.
I know how a lawyer would draft the wording to effect such a ban, but its consequences could in principle be extremely far-reaching. I believe the expression is - WTF ?
++ UPDATE ++
So now we know. In a neat little document (half the length of the accompanying FAQs), the FSA states that short-selling bank shares is
"in the opinion of the FSA ... market abuse"
BUT - only if the short is a big one - greater than a quarter of a percent of the bank's issued share capital.
So - retail punters - carry on ! (if you can find anyone to take your order). Oh, and Market Makers too - they are exempt (which answers one of the anguished practical questions posed yesterday on Newsnight by an interviewee who knew what he was talking about). But for the big boys, note, it does indeed include OTC swaps, CFDs, spread-bets etc.
We shall see, we shall see ...