According to a draft document, the ban could cover the sale of all listed shares belonging to German firms.
A temporary ban on naked short selling was introduced by German financial regulator BaFin during last week.
The initial proposals prevented short selling on stock belonging to ten German financial institutions, eurozone government bonds and credit default swaps.
Now the government wants to extend the short selling ban to apply to all stocks in a bid to reduce the amount of speculation within
The draft paper, quoted by Bloomberg, said: âThe financial crisis has curbed confidence in the financial markets and has revealed the need for further substantial improvement of oversight rules.â
âIn recent times the crisis has reached a new dimension with turbulences increasing on the European Union member countriesâ bond markets and the volatility of the euro.â
A new system of transparency surrounding short selling is also included in the draft proposals.
By Jim Ottewill