Report: US Regulators Assessing 'Manipulation' of Banking Shares

Image copyright: AP [via Al Jazeera]

The Spin

Pro-establishment narrative

It is certain that bearish short sellers have been betting against regional bankers despite the Fed reaffirming that the US banking system is sound and resilient, but this does not tell the entire story. Some investors are fearing the contagion of regional banking problems and its possible spillover to the broader economy, while others may be seeking to force the Fed to ease its campaign to cool inflation down. The finance marketplace is adjusting to broader complexities.

Establishment-critical narrative

Short sellers do play a crucial role in rational, well-functioning markets. However, because these investors have pocketed billions of dollars in two months by betting against regional banks that added deposits in April, it should be clear by now that this is no longer a well-functioning financial market. A temporary ban on short selling, similar to the one adopted in 2008, should be put in place to reduce panic selling.

Metaculus Prediction


Establishment split

CRITICAL

PRO

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