Juncker 'surprised' by German move to ban certain trades
Eurogroup chairman Jean-Claude Juncker on Thursday said he was "surprised" by what he called Germany's "unilateral" move to ban certain market trades without first consulting other eurozone members.
"The German decision surprised me because it was not previously discussed with other members of the Eurogroup," he told AFP during a visit to Tokyo.
"We have been discussing for months the possibility of this kind of action, but I wish we had finished that debate before Germany took a unilateral decision."
The euro hit a new four-year low against the dollar Wednesday after Germany's move to ban certain market trades triggered turmoil in global markets.
Analysts said Germany's attempt to reduce volatility by issuing new restrictions on speculative short selling backfired, as the surprise and uncertainty it generated sent the single currency plummeting.
Germany's securities market regulator Tuesday slapped a ban on so-called naked short-selling in the shares of 10 financial institutions and eurozone government bonds, a move it hoped would put an end to severe fluctuations.
Naked short-selling occurs when investors sell securities they do not own and have not even borrowed hoping to be able to buy them back later at a lower price, thereby earning a profit. In regular short-selling a trader borrows the security before selling it.
© 2010 AFP