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EU regulators undecided on shorting ban extension

THERE is no consensus among European Union securities regulators for introducing a German-style ban on trading credit default swaps linked to Eurozone government bonds, the head of a group of EU regulators said yesterday.

“I am not sure if there is a clear majority for following the German approach. It’s not off the cards but it’s not on the cards,” Eddy Wymeersch, chairman of the Committee of European Securities Regulators (CESR), said.

CESR is urging the EU’s executive European Commission to give supervisors powers to take emergency action like a trading ban in a coordinated way during times of market stress. It also wants the bloc’s financial services chief Michel Barnier to fast track his proposals to regulate derivatives and require trade reporting in July and regulate short selling in CDS markets in October.

Germany surprised its EU partners last week by announcing the ban last week in a bid to calm market volatility but it has had the opposite effect and helped deepen uncertainty.