Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

EU Ministers Adopt Curbs on Naked CDSs in Short-Selling Law

Feb. 21 (Bloomberg) -- European Union finance ministers adopted a short-selling law that includes an optional ban on naked credit-default swaps tied to sovereign debt.

The legislation, which would also curb so-called naked short-selling of stocks and government bonds, was approved at a meeting in Brussels today. The decision marks the final stage in the adoption of the law, which was also approved in November by lawmakers in the European Parliament.

Investors buy CDSs as insurance to protect themselves from losses if a bond issuer defaults. A sovereign CDS trade becomes naked when an investor buys the swap without being at risk of suffering such losses.

The short-selling and naked-CDS curbs will come into effect on Nov. 1, according to a copy of the law published on the EU’s website.

To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net;

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.