THE TELEGRAPH: Traders are predicting chaos on the world's second-largest government bond market after the German authorities on Tuesday announced a ban on all naked short-selling in European public debt, as well as shares in the country's 10 largest financial institutions.
The unprecedented step saw the euro sink to a four-year low after Germany said that from midnight shorting of credit default swaps of any European government would be banned.
The prohibition is an attempt to counter speculators that Berlin believes are trying to destabilise the region's sovereign bond market.
Traders greeted the move by BaFin, the German regulator, with a mixture of anger and astonishment. One bond trader said he expected Wednesday's trading session to be one of the most volatile in living memory: "It will be complete chaos, I really don't know what the Germans think they are doing." >>> Harry Wilson, Financial Services Correspondent | Tuesday, May 18, 2010
THE TELEGRAPH: European shares set to fall as euro slides on German ban: European shares were set to fall sharply on Wednesday, as investors' confidence was rattled by Germany's decision to ban naked short-selling of some bonds, stocks and credit protection, prompting weakness in Asian equities and the euro. >>> | Wednesday, May 19, 2010
