COPENHAGEN (Denmark) - THE Danish Financial Supervisory Authority on Sunday banned short selling of shares in bank and financial institutions.

The watchdog said the ban will come into effect on Monday.

Short selling involves investors borrowing shares, usually from a broker, and selling them in the hope that they will go down. Then they buy the shares back at the lower price, give them back to the broker and pocket the difference; if the stock goes up, short-sellers lose money.

Regulators in Germany, the US, Britain and elsewhere imposed temporary bans on short selling of some stocks in mid-Sept, but the US ban expired on Thursday.

Such bans aim to help stop the free fall of shares on stock exchanges, which have suffered heavy losses in the wake of the US financial crisis. -- AP