UPDATE 1-German selling ban would be better if EU coordinated-EU

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BRUSSELS, May 19 (BestGrowthStock) – The European Commission said on
Wednesday it understood why Germany had banned some short
selling of bonds, stocks and transactions in credit default
swaps, but said it would have been more effective if the move
was coordinated across the European Union.

“We fully understand why the Germans have made their
decision,” Commission spokesman for internal markets Chantal
Hughes told a news briefing.

“We believe the action would be all the more effective if
coordinated at the Euroepan level,” she said.

Asked if the euro was under under speculative attack, as the
head of Germany’s financial market watchdog BaFin, Jochen Sanio,
told a parliamentary committee hearing on Wednesday, she said:

“The Commission understands why, in certain cases, when
there is a downward spiral, it can make sense indeed to
temporarily suspend naked short selling. It’s been done in the
past, so we do understand the reasons behind the German
decision,” she said.

She said the Commission had already set up a taskforce to
look at these issues and would launch consultations in the
coming weeks to get all the necessary information to prepare a
proposal on short selling in the autumn.

Hughes said that at this stage, with the EU supervision
reform still being debated in the European Parliament, all the
powers regarding short-selling bans rested with national

“This is about how you manage financial markets, this is
done by member states,” she said. “The power to temporarily
suspend short-selling only exists at the national level, it does
not exist at the EU level,” she said.

EU finance ministers are meeting on May 21 in Brussels to
discuss strengthening economic governance in the 27-nation bloc
and toughening EU budget rules to prevent a Greek-style debt
crisis in the future.

Asked if the short-selling ban would be on the agenda,
Hughes said:

“It was the Austrian delegation that asked for this matter
to be on the Council’s agenda this morning. We are looking to
see if it is necessary. We are prepared to discuss it on Friday
but it is up to the presidency (Spain) to decide what is on the
agenda,” she said.

Stock Market Report

(Reporting by Jan Strupczewski and Ilona Wissenbach, editing
by Luke Baker)

UPDATE 1-German selling ban would be better if EU coordinated-EU