NEW YORK, May 4 (Reuters) - The practice of short selling is coming under increased scrutiny as shares of regional banks remain under pressure, with some calls for more regulatory oversight of the practice.
Short sellers, who borrow shares they expect to fall and hope to repay the loan for less later to pocket the difference, have profited from the banking crisis.
During the financial crisis, short selling was temporarily banned in the U.S., although a New York Federal Reserve review later showed the curb did not achieve the intended effect.
The SEC declined to comment on Thursday when asked if it should impose a short selling ban.
While some market participants criticized the practice, others, like non-profit group Better Markets, said short sellers warned markets about the challenges regional banks were facing.