Shares off a few pence? Must be the hedgies. As Aviva’s stock hit the skids this week, chief executive Andrew Moss had no doubt who was behind it. Never mind that the level of short interest in the UK insurer is vanishingly small – just above 1 per cent of the market capitalisation is on loan, according to Data Explorers. In a tense reporting season, it is tempting to demonise the shorts, who bet on a fall in prices by selling “borrowed” shares. Naked shorts do not even borrow the shares before selling them – allowing them to move fast and save money. Politicians in Australia this week evoked the argument of last resort – “national interest” – to justify an indefinite extension of a five-month ban on short selling financial stocks. Japan may follow suit.

This was the wrong decision. Not only does it confirm one of the most dispiriting aspects of the financial crisis – that regulators are making up the rules as they go along – but it also runs counter to the spirit of equity trading. You think a share will go higher, you go long. You think it will go lower, you go short. Most long-only investors are happy to play along: they not only receive a fee and solid securities in return for lending stock – often government debt, to 105 per cent of the value borrowed – but also get to buy more of the company at lower prices if the stock then falls.