Most regulators around the world reacted to the 2007-09 crisis by imposing bans or constraints on short-selling. Even in the United States, where the pressure of lobbying from Wall Street was intense, the Securities and Exchange Commission issued curbs on short-selling in the wake of the Lehman Brothers failure in 2008. Briefly. One of the worst decisions of his time in office, said SEC chairman Christopher Cox at the time. Bans and partial bans were imposed and lifted at various times by various countries. Some are still in place. Some were more restrictive than others, giving the basis for a natural experiment of the sort economists love to find. A pair of scholars from London's Cass Business School and the University of Naples looked at the resulting data and concluded:
- Liquidity: Bans were detrimental for liquidity, especially for stocks with small level of market capitalisation and no listed options. Trading just dried up when the market-making element of stock lending and short-selling disappeared.
- Prices: Bans led to slower price discovery, especially in bear markets. Prices simply didn't adjust very quickly to new developments, as would-be sellers had trouble finding buyers, presumably because they feared not being able to get rid of a position later on.
- Price support: Bans didn't do what they were meant to do. They failed to support prices, with the possible exception of US financial stocks, where the bans were lifted after only a short period.
The scholars conclude: "in contrast to the regulators' hopes, the overall evidence indicates that short-selling bans have at best left stock prices unaffected, and at worst may have contributed to their decline."
Source document: The working paper "Short-Selling Bans around the World: Evidence from the 2007-09 Crisis," by Alessandro Beber of Cass Business School Marco Pagano of the University of Naples, is a 64-page pdf file.
That line in a poem by Mark Strand wasn't intended to bring investment bankers directly to mind, but it does. "In a field," he begins, "I am the absence of field." Of, but not part of. Since the financial crisis, with its early and persisting impact on the economy, the City of London – the ancient code for the financial district – has been worried about how new waves of regulation might play out in practice. Would banks, long attracted to London for its liberal approach to commerce and its many (resulting) cultural attractions, vacate the city and move somewhere with lower taxes and less intrusive regulators? Would Bank Tube station become a ghost town, and the state's finances turn into a black hole?
Yes, is the answer of the economists working at McKinsey Global Institute. The consulting firm's think-tank thinks several forces are converging to that will reshape global capital markets in the coming decade. As they develop, there could be a trend away from equity investment that will change how businesses finance themselves and view their governance. "The most important of these is the rapid shift of wealth to emerging markets where private investors typically put less than 15 percent of their money into equities," MGI says. In more developed markets, investors put 30 to 40 per cent into equity instruments. Moreover, structural changes in the developed world are conspiring to reduce demand for equity. MGI thinks the ageing population as well as shifts in pension regimes will push the demand side towards income-generating investments. Moreover, the growth of alternative investments is a sign that investors seeking high returns will look further afield than equities to boost risk and reward. Yes, and new financial regulations will probably hurt demand for shares.
Board of UK companies have begun to put in place some of the structural changes proposed in the 2010 version of the UK Corporate Governance Code. The 2011 UK Board Index survey of the headhunters Spencer Stuart looked at the governance practices in the top 150 companies. Some of its findings were: 
Boards of directors of US corporations have generally been very independent of management, if you judge independence purely on the basis of their formal ties to the company. But that's not always how it works out in practice. According to the latest version of the Spencer Stuart Board Index, however, there are increasing signs that boards are gaining structural power at the expense of the CEO. The headhunter's annual study of the S&P 500, now in its 26th year, shows a number of pointers in that direction: 
Even the title of this report carries the sense of gloom that fell upon the streets of many of the cities and towns in the UK in the autumn of 2008. Royal Bank of Scotland, one of the world's largest banking groups following its acquisition of National Westminster Bank at the end of the 1990s, had gone too far when it led a consortium of bank to buy and break up the Dutch bank ABN Amro. That deal – combined with the subprime crisis - was its undoing. Three years later, and after much prodding, the Financial Services Authority has released a blockbuster report – detailing the bank's and the regulator's failings – in the affair. While the global market context played an important role, the FSA devoted consideration space to the problems of leadership and governance at RBS, and noting: "banks are run by people and those in board and senior management positions are responsible for the decisions they make. It is only with hindsight that it is clear that there were specific decisions taken by the RBS Board and senior management which placed RBS in a more vulnerable position than other banks when the financial crisis developed between 2007 and 2008." The expression "only with hindsight" may be that the regulator's foresight wasn't very good at the time, when quite a few people, including some shareholders, wondered whether RBS had taken a step too far. The FSA says that beyond the mistakes in the ABN Amro takeover, the errors at the top included: