Sovereign debt managers criticise ban on naked CDSs
European Parliament proposal will increase volatility in borrowing costs, claim debt managers
Sovereign debt managers from key European Union (EU) member states have criticised a European Parliament proposal for a ban on naked shorting of sovereign credit default swaps (CDSs). They argue reduced liquidity in the CDS market would translate into more spread volatility and increased borrowing costs.
“Banning naked short selling will have a disproportionately large impact on the cost of borrowing for smaller sovereign issuers like us. An issuer with a big market, such as Germany, will be
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