EU welcomes French-German joint call for short-selling ban

08:47, June 10, 2010      

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The European Commission on Wednesday welcomed a joint call from Germany and France to speed work on tighter regulation of derivatives trading and introduce an EU-wide ban on short-selling.

French President Nicolas Sarkozy and German Chancellor Angela Merkel urged the commission to introduce stricter financial regulations in a joint letter addressed to the Commission President Jose Manuel Barroso, which was revealed earlier Wednesday.

"We welcome the letter, as it reinforces the push for swift adoption of financial market reform," commission spokeswoman Pia Ahrenkilde Hansen said. "We trust that the political dynamic expressed in the letter translates into full support for swift adoption of our proposals in the legislative process."

In the letter, Sarkozy and Merkel specifically called on the commission to come quickly with a proposal on stronger supervision of the credit default swaps (CDS) markets and short-selling concerning EU countries' governments bonds, suggesting the EU should follow the example of Germany and introduce a bloc-wide ban on short-selling to clamp down on speculators in government debt.

"We urgently need the commission to speed up its work with regard to stronger supervision of the sovereign CDS market and of short-selling," the two leaders said.

Hansen said the commission is now in the final stages of preparing concrete proposals on the issue and would propose it during the summer.

Germany shocked global markets when it unilaterally banned naked short-selling of eurozone countries' government bonds and related CDS last month, which was opposed by some EU partners.

"We have seen, in recent week, divergent positions on member states which also reflected in the media and we do need a European coherent approach on this issue which was precisely what the commission was driving for," Hansen said.

Source:Xinhua

(Editor:黄蓓蓓)

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