The European Parliament has supported new rules curtailing shorting and the trading of credit default swaps (CDS), The Wall Street Journal reports. The step is aimed at checking speculation on sovereign default.
As per the new rules, buying default insurance contracts without owning the related bonds will be banned. The rules provide for removal of the ban for a maximum of 12 months by national authorities in case the sovereign debt market malfunctions.
Click here for the story from The Wall Street Journal.