Europe close to compromise deal on swaps ban / EU rules out permanent naked CDS shorting ban

The prospect of Europe imposing a permanent ban on trading in 'uncovered' credit default swaps on sovereign debt receded after senior EU Member State diplomats threw their weight in May 2011 behind a compromise on how new short-selling rules should work.

Under a deal endorsed by European Union finance ministers at the ECOFIN Council, Brussels, 16-17 May 2011, naked short-selling of cash government bonds would be banned.

This will be the position the Council enters negotiations with the European Parliament in June 2011 with the hope the get the proposed legislation adopted at the first reading stage.

EurActiv, 12.5.11: EU to back short-selling curbs http://www.euractiv.com/en/euro-finance/eu-back-short-selling-curbs-news-504784

Council of the European Union: Press Release: PRES/11/133: Council agrees general approach on short selling and credit default swaps http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/122043.pdf

ESO: Background information: Proposal for a Regulation of the European Parliament and of the Council on Short Selling and certain aspects of Credit Default Swaps http://www.europeansources.info/record/proposal-for-a-regulation-of-the-european-parliament-and-of-the-council-on-short-selling-and-certain-aspects-of-credit-default-swaps/

ESO: Background information: EU battle ahead over CDS ban proposal http://www.europeansources.info/record/eu-battle-ahead-over-cds-ban-proposal-eu-considers-uncovered-cds-compromise-deal/

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