Posted By thestatedtruth.com on March 9, 2010

EU, Merkel Urge Swap Regulation as Greece Takes Plea to U.S.
By Rainer Buergin and Ben Moshinsky

March 9 (Bloomberg) — The European Union’s top regulatory official said the bloc will consider banning “purely speculative” credit-default swaps as German Chancellor Angela Merkel called for a crackdown on derivatives trading to prevent a rerun of the Greek financial crisis.

European Commission President Jose Barroso said today the 27-nation region will “examine closely the relevance of banning purely speculative naked sales on credit-default swaps.” Merkel, speaking before Greek Prime Minister George Papandreou meets PresidentBarack Obama in Washington today, said the EU must take the lead in curbing derivatives.

“We’re of the opinion that a quick implementation of actions in the area of CDS has to happen,” Merkel told reporters in Luxembourg. Citing “ongoing speculation against euro-region countries,” she called for the “fastest possible” implementation of new rules.

European leaders are ratcheting up the pressure for global regulation of derivatives amid the Greek fiscal crisis. The commission, the EU’s executive arm, will also propose creating a lender of last resort to aid cash-strapped members such as Greece, a proposal that has divided the region’s leaders.

Papandreou said in a speech in Washington yesterday that “unprincipled speculators” threatened a new global financial crisis and said he’d press Obama to support EU efforts to target speculation.

http://www.bloomberg.com/apps/news?pid=20601087&sid=agj7D9vZDDvE

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