EU regulators ready to act in concert?

The European Union is close to reaching agreement on a new supervisory framework, designed to reduce the room for national discretion. But Germany’s recent short-selling ban shows domestic supervisors are not afraid to go their own way to protect national interests. Can a European supervisory system work in practice? Joel Clark reports

Of all the market-moving events in the first half of 2010, it seems odd that one of the most destabilising was a temporary and limited ban on naked short selling imposed by German regulator Bundesanstalt für Finanzdienstleistungsaufsicht (Bafin) on May 19. Despite being implemented primarily for domestic purposes, and intended only to affect local players, the ban sent the already fragile eurozone into a tailspin – the euro fell to what was then a four-year low in intra-day trading and the Dow