EU proposes curbs on 'Wild West' trading

[pampango]

Source: BBC

The European Commission has published draft rules on trading in complex financial products, saying it currently operates in a "Wild West territory".

The body wants to create a watchdog to monitor the derivatives market - products used to make bets on assets without buying them.

Officials also want to assess the extent of short-selling, when traders bet on asset prices falling. The practices have widely been blamed for causing economic instability. Under the commission's proposals, a new watchdog would be created to monitor the exchanges.

"No financial market can afford to remain a Wild West territory," Michel Barnier, the commissioner leading the proposals, said. Mr Barnier has, however, underlined the fact that short-selling itself can be useful and legitimate, but that it can become a problem when people deliberately manipulate a market. He also highlighted that in times of economic uncertainty, it can disrupt markets even further.

Read more: http://www.bbc.co.uk/news/business-11305040