Germany and France look to rein in speculative trading
Germany and France are moving to curb or even ban the use of certain financial derivatives in the wake of the Greek debt crisis, daily Süddeutsche Zeitung reported Tuesday.
Government representatives in Berlin and Paris said that Chancellor Angela Merkel and French President Nicolas Sarkozy planned to write a letter to José Manuel Barroso calling for limits to speculative trading such as credit default swaps.
Jean-Claude Juncker, the head of the Eurogroup and Luxembourg Prime Minister, and the Greek Prime Minister Giorgos Papandreou, were also backing the call for common international rules on the issue, the paper reported.
The goal was to have a common line on financial instruments such as naked short selling, in which stock market traders sell products which they neither own or have borrowed security to cover.
Such instruments have been widely blamed for financial turmoil in recent years. Recently, traders were making speculations on Greece going bankrupt.
According to the paper, Merkel, Sarkozy, Juncker und Papandreou were prepared to pursue the issue alone even if important G-20 partners such as the United States and China were not willing to join them.
“We cannot keep waiting until the last ones are on board,” the paper quoted a source as saying.