Market chaos warning as Germany bans shorting - papers

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Traders are predicting chaos on the world's second-largest government bond market after the German authorities announced a ban on all naked short-selling in European public debt, as well as shares in the country's 10 largest financial institutions.

The unprecedented step saw the euro sink to a four-year low after Germany said that, from midnight Tuesday, shorting of credit default swaps of any European government would be banned, writes the Telegraph. The prohibition is an attempt to counter speculators that Berlin believes are trying to destabilise the region's sovereign bond market. Traders greeted the move by BaFin, the German regulator, with a mixture of anger and astonishment. One bond trader said he expected Wednesday's trading session to be one of the most volatile in living memory: "It will be complete chaos, I really...

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