What is Short-Selling and why the ban in some European markets?

Short Selling as I explained to my younger brother is that; I borrow his nike school bag and sell at a price let's say GHC 2.00 and then hope for the price of the same nike school bag to come down to GHC 1.00 in the market. And after that I quickly buy the same nike school bag for him at the current market price of GHC 1.00 leaving me with GHC 1.00 of which I pay him a lending fee ( 0.20p) and keep the rest. (0.80p).
It is quite obvious in the case that, if the price of the nike school bag rises from GHC 2.00 to GHC 3.00 after I bought from him, I would make a loss of GHC 1.00 since I have to return his nike school bag (by buying) for him to go to school. In a more matured example, I approach an Investor of Company A to lend me 1000 shares which currently trades at $ 100 per share. (i.e. $100,000) then I sell those shares at $100 per share hoping for the price to drop to $50 per share. When that happens, I buy the same 1000 shares of Company A at $50 per share and give back to the Investor of Company A with the lending fee whether the value decreases or not. The market can turn in favour of the Investor too.
Short selling of assets mostly occurs in the securities markets and most experts allude market volatility to it. In most European markets, short selling has been banned to reduce market volatility. France, Spain, Belgium and Italy are prohibiting short sales on bank stocks and it is likely other countries would follow.
Investors are now skeptical of what would happen to the market now that short-sellers are out.

First Time Investors on Ghana Stock Exchange

In 2009, I bought my first stock as a first time investor which was an IPO of ETI. I bought 500 shares at 0.29 cents (about GHC 0.34) per share. I bought this stock without any market analysis but just out of desperation to own shares on the GSE. I must say that I was also happy for the fact that the dividends were paid in dollars and at that time, the dollar-cedi rate was in favor of the dollar.
This stock performed badly when it started trading and now it has fallen lower than half its initial share price.
One lesson from this investment is that, an investor should not to rush into investing but to study the market very well especially IPOs.
As an investor, one must consider so many factors before buying a stock or venturing in the capital market. The Ghanaian Capital market is becoming robust every single day and hence requires more attention and advice to invest and gain from it. Brokerage firms are sprouting from time to time and that means people in Ghana are now seeing the need to take the investment job serious hence the need for investment advisers. Competition is getting keen but the question is how prepared is the market for first time investors- those that know very little about investing. Is it true that the majority of investors on the exchange invest with their sentiments with very little or no investment advice?

How many investors understand the GSE Security Depository (GSD) System and know the investment laws enacted by the Security and Exchange Commission (SEC)? Answers to these questions should caution the Ghana Investment Promotion Centre (GIPC) to be more active. I entreat all first time investors to study the market or seek advice from experts (brokerage firms) before investing. You can make a lot of money in the stock market, just ask how?

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