short ban on german stocks, page-95

"In a bear market, bullish investors always come to believe that short sellers are 'driving the market down,' when in fact, the decline is almost entirely due to selling from within their own over-invested ranks. Sometimes authorities outlaw short selling. In doing so, they remove the one class of investors that must buy. Every short sale (except when stocks go to zero) must be covered, i.e. the stock or derivative contract must be purchased to close the trade. A ban on short selling creates a market with no latent buying power at all, making it even less liquid than it was. Then it can decline day after day, unhindered by the buying of nervous shorts. Like all other bans on free exchange, a ban on short selling hurts those whom it is designed to help."

Robert Prechter.