Good Old Gordon

It may well be correct that short-sellers merely spot existing weakness and bet against it, but when the financial system is close to collapse, and the banks are needed to keep the system going, then it's absurd to allow practices which imperil the banks.

It's the same principle by which Winston Churchill locked up Oswald Mosley during World War II. Mosley's pro-fascist activities weren't illegal, but they were unhelpful when Britain faced destruction from fascists.

That share traders protest at being deprived of their 'right' to sell banks' shares short, when the banks are being bailed out by the taxpayer, is ridiculous.

We all lose if the system collapses. Look at the 1930s, only a madman wants a re-run of that scenario. Only people as weird  as share traders would want to continue to try and make profits at the risk of further endangering the system.

The good thing is that Gordon  has he guts to take away the traders' toys. Governments across the world have routinely toadied to the financial industry because the financial industry has appeared to be delivering the goods in terms of expanded GDP, jobs, taxes and prosperity.

So governments have given the financiers what they asked for: tax-breaks, light regulation and a benign M&A environment.

Gordon's ban on short selling is a sign that he has the new-found balls to say No to the financiers. It was interesting to hear what shadow Chancellor George Osborne replied when asked if he would stop short selling. Whatever Osborne's democratic pretensions, his heart is clearly still with his spiritual pals - the City Boys. He said he wouldn't ban it.

With the US, Australian, Irish and other governments quickly following Gordon's move to ban short-selling, it is to be hoped that this is a sign that governments around the world will stop fawning on financiers and impose a sensible regulatory regime which encourages even share traders to behave like responsible citizens.

Three other reforms which Gordon should immediately impose on the financial industry are: 

1. The remuneration system has to be changed to reward people for making profitable deals, not any deal. 
2. Financial products must be examined and explained so that everyone in the financial industry can understand them. 
3. Understanding of a product should be a pre-requisite for being allowed to trade in it.

Pretty basic stuff. It's amazing that an industry has to have such basic rules imposed on it by government.