John Paulson’s hedge fund emerged Tuesday as the biggest short seller of British banks,

John Paulson’s hedge fund emerged Tuesday as the biggest short seller of British banks, The Financial Times reported, citing filings made under a new regulatory regime.Mr. Paulson, whose historic bet against the housing market that earned him more than $3 billion last year, has shorted four of the U.K.’s five biggest banks, the newspaper said, citing the filings.Mr Paulson, the founder of Paulson & Company, has bet against four of the five biggest British banks, according to filings made under a new regulatory regime on Tuesday. Among his positions are a 350 million pound bet against shares in Barclays; a 292 million pound bet against Royal Bank of Scotland; and 260 million pound bet against Lloyds TSB, according to the newspaper.
The newspaper noted that Mr. Paulson, anticipating criticism for his moves, defended the short positions, saying his hedge fund “empathizes with financial firms as to the difficult positions in which many find themselves.”Last week, British and U.S. regulators moved to temporarily ban short sales on a slew of financial firms. The regulators also enacted new disclosure rules for institutional short-sellers
Short selling — a bet that a stock price will decline — is the practice of selling stock without owning it, hoping to buy it later at a lower price, and thus make a profit. It has often been blamed for forcing prices down in times of market stress, but the level of anger has intensified as the American government has been forced to bail out major financial institutions and the leaders of some investment banks have asked for action to protect their shares.