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The ban applies to the shares of banks and other financial services firms and aims to stamp out the relatively large fluctuations in value that the markets have been subjected to this week.
Betting on the dramatic fall in share values has been blamed for instability in the past and short-selling is often frowned upon.
The countries taking part in the ban are Spain, France, Italy and Belgium.
Spain's market regulator CNMV, which has banned the short-selling of Santander, BBVA, Sabadell, Bankinter, Banco Popular, and Banca Civica stock, said: "The situation of extreme volatility in European stock markets, especially for shares of financial entities, is clearly affecting the stability of the markets and can disrupt their ordered functioning."
In the UK, the Financial Services Authority has ruled out a ban of short-selling as a stock market investment, but stressed it was monitoring markets closely.
Posted by Greg Secker
