They won't outright ban shorting, that would be foolish. What they could do is make it a lot harder to short by implementing the uptick rule and other measures that require short shares to be real shares available in the marketplace not manufactured naked shares that dilute stocks worth. They could even apply more restrictive rules to key financial institutions to protect these core companies in our economy. This would cause a nice rally in the financials.
This investment of 25 to 40% in Citigroup brings clarity to the situation.