A TEMPORARY ban on short-selling has been criticised by a leading Guernsey financier.

Guernsey Investment Managers and Stockbrokers Association chairman Stuart Place (pictured), who is also managing director of Argyll Investment Services, said the decision to impose a ban was hard to justify.

‘If shorting as a principle is wrong – and we don’t think it is – then we have to ask why it is limited so specifically. In our lifetimes we have witnessed the freeing of markets, which requires sellers of all kinds as well as buyers.

‘Deregulation of banks will prove to have been their undoing, yes, but that is a consequence of a combination of free markets and poor management.’

Mr Place said limiting market freedom restricted the ability to trade and therefore to create liquidity, which he said was tight enough as it was at present.

The decision by the Financial Services Authority to clamp down on what some think contributed to the sharp fall in HBOS shares was taken on Thursday night.