Brussels seeks coordinated action against speculators

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The EU Commission on Wednesday called for coordinated European action against speculative trading, after Germany moved unilaterally to ban naked short selling of some securities.

"I take note of the decision taken by German authorities to temporarily suspend short-selling of some bonds," said EU Internal Market Commissioner Michel Barnier.

"Financial markets are currently uncertain and volatile. I fully understand German and Austrian concerns about possible impacts of naked short selling in this context," he stressed, adding "these measures will be even more efficient if they are coordinated at European level."

Germany was to introduce new rules Wednesday in a bid to ease the market volatility it says threatens the eurozone economies.

Germany's securities market regulator Bafin banned naked short sales of certain securities, in particular the government bonds of the 16 countries that use the euro.

Naked short selling is when an investor sells on the market a security they do not own and have not even borrowed, hoping to be able to buy it later in the day at a lower price, thereby earning a profit.

On Monday Austrian Chancellor Werner Faymann expressed his support for a tax on financial transactions, despite the lack of a common EU-wide position on that matter.

Barnier proposed discussing the issue at a meeting of finance ministers on Friday.

© 2010 AFP

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