Germany’s financial-markets regular said it is banning naked short-selling of certain euro-zone debt and credit default swaps as well as some financial stocks effective at midnight local time, saying “excessive price movements” could endanger the stability of the financial system.

The ban will remain in effect through March 31, 2011.

Under naked short selling, the shares being sold aren’t borrowed in advance. The practice came under fire at the height of Greece’s struggle to refinance its debt, with many euro-zone governments saying such transactions in credit default swaps, a type of default insurance, artificially inflated Greek funding costs.

The largely symbolic ban comes amid rising political pressure in Germany to tackle speculation that politicians blame for exploiting and worsening the euro-zone debt crisis. It is unlikely to affect much actual trading since most of the naked short-selling and CDS trading that is causing concern in Europe takes place in London, outside the regulator’s jurisdiction, German officials admit.

Such instruments, when used to bet against governments or banks rather than to hedge against an investment, have been criticized by all political parties in Germany. Politicians have compared them to taking out fire insurance on a neighbor’s house before starting a fire. They believe hedge funds and investment banks have worsened the euro zone’s crisis of confidence by betting on debt defaults in Greece and other struggling countries, and even on the breakup of the currency union.

The German move to ban some naked short-selling comes as Chancellor Angela Merkel’s government is trying to win acceptance in Germany’s parliament for the European Union’s nearly $1 trillion rescue fund for indebted euro-zone states—a highly controversial initiative in Germany, where lawmakers and voters feel they’re paying more and more to bail out profligate Southern European countries such as Greece.