Alexa
  • Directory of Taiwan

EU reaches compromise on regulating risky trades

 European Commissioner for Economic and Monetary Affairs Olli Rehn arrives for an EU finance ministers meeting at the EU Council in Brussels, Tuesday ...

Belgium EU Finance

European Commissioner for Economic and Monetary Affairs Olli Rehn arrives for an EU finance ministers meeting at the EU Council in Brussels, Tuesday ...

European finance ministers say they have reached a compromise on restricting naked short-selling, a trade in which investors sell stocks or government bonds they don't own.
The deal, however, falls short off a ban on naked short-selling of credit default swaps _ a type of insurance _ of sovereign bonds demanded by the European Parliament and Germany.
In a traditional short-sale, an investor hopes to profit by borrowing a share or bond, selling it and then buying it back at a lower price. In a naked short sale an investor bets on a drop in the price without actually borrowing the underlying share _ a practice some regulators view as dangerous to market stability.
The ministers say investors must have a reasonable expectation of quickly obtaining the underlying asset.


Updated : 2021-05-12 05:25 GMT+08:00