Why Germany's Naked Short Ban Is 'Reasonable': Strategist

The German government announced plans to ban naked short-selling in the country's 10 most important financial institutions on Tuesday. David Kelly, chief market strategist at JPMorgan Funds, shared his insights on the new proposal.

“Fundamentally, in this kind of situation, the Europeans do need to protect their sovereign debt and their banks and it’s reasonable to ban naked short-selling against these assets,” Kelly told CNBC.

Kelly also said the falling euro is good for Europe right now as Euro Zone nations have "no inflation issues" and the slide will help their exports.

“What they need to avoid is a financial crisis and it would be nice if they coordinated, but I understand why they’re moving this direction,” he said.

“The ECB has to do a little bit of growing up in terms of how it communicates—they do need to get their messaging a little tighter here.”

  • Watch Kelly's Previous Appearance on CNBC (May 13, 2010)

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No immediate information was available for Kelly or his firm.