DUBLIN REPORT: Iseq: 2,230.59 (-43.25) Settlement date: January 23rdMASSIVE VOLUMES of shares in Irish banks changed hands yesterday, with 47 million AIB shares traded in Dublin and 22 million Bank of Ireland shares exchanging hands. A further 16 million AIB shares traded on its London listing, with Bank of Ireland clocking up a further eight million trades.

These volumes are way above the average for these stocks.

Trading activity began to surge shortly before midday, not long after the Financial Regulator issued a statement cautioning market participants that a ban remains in place on taking short-selling positions on Bank of Ireland, AIB and Irish Life Permanent in London and other international trading venues, as well as Dublin.

AIB’s share price descended sharply in the early afternoon.

The timing suggests that there may have been some closing out of unlawfully-held short positions on Irish banking stocks.

The UK lifted its ban on short-selling of financial stocks last Friday, but the Irish ban remained in place, which appears to have prompted some confusion among traders.

At the close, AIBfinished at 45 cent, down 25 per cent, having traded as low as 29 cent. Bank of Irelandhad a better day's trading, closing up 17 per cent at 40 cent, while Irish Life Permanentclimbed 9 per cent to €1.20.

CRHfell back 4.8 per cent to €17.36, making it an overall negative day for the market, but the slide was stemmed by a positive day for the major Iseq stock Elan.

Fyffes, Grafton, Independent News Media, Smurfit Kappaand Paddy Poweralso retreated, while Kingspan was one of the main fallers, dropping 13 per cent to €2.35.

On a day with few climbers, Aer Lingusrose 2 cent to €1.45 and Aryzta also added 2 cent to €19.90.