European executive eyes new watchdog to control speculators

THE EUROPEAN executive dealt a blow to French and German hopes of a permanent EU-wide ban on some forms of trading after throwing its weight behind empowering new watchdogs to rein in financial speculators.

Last week, German Chancellor Angela Merkel and French President Nicolas Sarkozy wrote to the European Commission demanding it look at outlawing some short selling of shares and government bonds.

Yesterday the Commission, issued a rough outline of new rules that recommended emergency restrictions but stopped short of blanket bans on the speculative bets many believe exacerbated the Eurozone crisis.

Instead, officials emphasised the role of a pan-national supervisor, whose powers are soon to be decided.