European stock markets slumped this morning and the euro hit another four-year dollar low, with analysts blaming new German trading controls.
The main European markets were down by between 2% and 3% by lunchtime, while the euro slid to a new four-year low of $1.2144 in Asia overnight. The single currency was later trading at $1.22 in Europe by lunchtime.
The falls came after Germany moved to ban short-selling - profiting from the sale of borrowed shares - of the country's top ten financial institutions.Germany's new, temporary ban also covers some high risk investments in euro-denominated government bonds, and credit default swaps - a form of insurance - on those bonds. Some analysts believe the move could draw funds out of European markets.
Short-sellers borrow shares, sell them and then buy them back when the stock falls and return them to the lender, keeping the difference in price. 'Naked' short-selling is when sellers do not even borrow the shares.