London's Ban on short-selling could drive Hedge funds to rival cities

Britain's temporary ban on short-selling financial stocks is irksome for London's hedge funds and is another factor which could help undermine the city's pre-eminent position in Europe as a hedge fund base.

Short-selling is a key trading strategy for hedge funds as they aim to profit regardless of whether a stock is rising or falling, but London's curbs come as rival centres seek to attract hedge funds to bolster their financial sectors.

Switzerland, France, Luxembourg and Scandinavia have all begun to emerge as alternative options for hedge funds looking for lower tax and a higher quality of life.