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Merkel and Sarkozy push financial market reforms

AFP · 9 Jun 2010, 12:58

Published: 09 Jun 2010 12:58 GMT+02:00

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French President Nicolas Sarkozy and German Chancellor Angela Merkel wrote jointly to EU Commission President Jose Manuel Barroso and urged quick action to regulate certain transactions due to "turbulence" on the markets.

"The commission's work should include a possible ban at European level on naked short selling of all or certain shares and bonds and of certain credit default swaps on sovereign securities," they wrote in the letter.

Credit default swaps are instruments offering insurance against the risk that a government might be unable to honour payments due on debt it has issued

to investors to cover its overspending.

"Naked" short selling is a particularly aggressive technique of selling assets for a future date without having any immediate access to it, even through borrowing. Traders seek to profit from a future drop in prices.

The biggest market for such financial products in Europe is in London where the new Conservative-Liberal Democrat government is already facing regulatory moves from EU authorities considered unwelcome for British financial centres.

A sudden, unilateral decision by Germany to ban some forms of "naked" short selling in government debt caused consternation in European government debt markets and helped make big deficits and debt in the eurozone a hot issue.

"Strong measures have already come into force," Merkel and Sarkozy wrote in the letter dated Tuesday but released on Wednesday.

"Severe turbulence on the financial markets in recent months has however raised serious concerns among member states of the European Union and all our citizens," they added.

"We believe there is an urgent need for the (European) Commission to speed up its work concerning the strengthened framework of the market" governing transactions such as the credit default swaps and short selling.

They called on the commission to present a comprehensive action plan before a meeting of economic and finance ministers of the 27 EU countries on July 9.

Story continues below…

Sarkozy and Merkel are to hold talks on Monday in Berlin ahead of a European Union summit later that week that will be dominated by worries over the eurozone's debt crises.

There have been mounting disagreements between the two leaders over economic policy, including frequent clashes over multi-billion-euro bailout packages for Greece and then the wider eurozone.

Paris had blamed Berlin for dragging its feet over a near trillion-dollar plan drawn up to prevent Greece's fiscal woes from spreading to other vulnerable countries, saying that it pushed up the price of the package.

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Your comments about this article

15:48 June 9, 2010 by pmach
I am sure Sarkozy is belting out how its his idea to implement the reforms as Merkel looks on like she is listening to a little wind bag of a dwarf.

Don't waive those arms to aggressively Sarkozy you may loose your balance in those elevator shoes and fall off your ladder. PS Is that your security behind you Sarkozy..cant really see them to well now that you require height restrictions so they don't dwarf you.
16:27 June 9, 2010 by William Thirteen
glad to see they are pressuring for speeded up regional reforms - hopefully not at the price of functionality and transparency. i also hope these can be further aligned with the necessary financial reforms in other regions and global financial regulators.
17:53 June 9, 2010 by Henckel
Whatever reforms are made, trhere will surely be interest groups that will be unhappy.
07:34 June 10, 2010 by Tony Ryals
Note the German term ¦#39;ungedeckten Leerverkäufe¦#39; which I believe is

newly made up term and not in long term usage as a common stock term of

German stock professionals translates more directly as ¦#39;uncovered

shorts¦#39; as opposed to ¦#39;nackt Leerverkäufe¦#39; which would be a more

correct translation of the english stock perverts who dreamed it up. even used Las Vegas' Cheetah strip tease joint as their internet server address in 2005! Correct me if I'm wrong but isn't 'nackt' the German word for naked and thus to translate more directly the english 'naked short' term popularized if not invented by U.S.penny stock money launderers who mask the number of shares they

dump until it's too late for naive investors sell to recoup their losses. So

isn't 'nackt Leerverkäufe' a more direct translation for this scam and

lie Angela Merkel and Nicolas Sarkosy are now promoting?

This link to german english translation of english term naked short selling'

I believe proves my point.If you take link you will see my search led to no such term in german although Merkel is working hard to put it into german stock lingo.

Other people translated 'naked short selling' into German:


Naked short selling¦#39; is the lie heard round the world.At first

mentioned only regarding non dividend paying U.S.penny stocks that

were pumped and dumped and ¦#39;reverse split¦#39; to death.Check for yourself if the ¦#39;naked short selling¦#39; term isn¦#39;t a fraudulent hoax -¦#39;ungedeckten Leerverkäufe¦#39; translates more directly to ¦#39;uncovered shorts¦#39; as

opposed to ¦#39;gedeckte Leerverkäufe¦#39; or ¦#39;covered shorts¦#39; which I believe would be common term in german stock lingo.! Our own governments are now all lieing about ¦#39;naked short selling¦#39; to distract from other very real forms of insider manipulations they want to cover up !

Again here is the naked shorting lie right on the sec.gov website from 2003.If you take the link you will see that among those stocks named as victims of 'naked short selling' besides Freddie Mac and Fannie Mae and Bank of America and UBS,etc.,etc.,is even Goldman Sachs shares were 'naked shorted' ! Note if a stock,bond,etc.,pays interest it can't have been 'naked shorted' or as Merkel says in german unvcovered shares or you would not have received a dividend.


SEC Enhances Investor Protections Against Naked Short Selling

FOR IMMEDIATE RELEASE by SEC Chairman Christopher Cox


Washington, D.C., July 15, 2008 ­ The Securities and Exchange

Commission today issued an emergency order to enhance investor

protections against ¦quot;naked¦quot; short selling in the securities of Fannie

Mae, Freddie Mac, and primary dealers at commercial and investment

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