主题：A Proposal Against CDS -- parishg

note: Germans/Frenchmen became desperate in this fight against America. CDS proved to be a WMD to kill AIG, but it could also be a powerful tool to destablize the gov. bond market in Europe. hehe. Smart Americans.

Moves in motion to limit CDS use

By David Oakley, Capital Markets Correspondent

Published: February 24 2010 22:13 | Last updated: February 24 2010 22:13

More European politicians are moving towards introducing measures to clamp down on the credit defaults swap market.

The German government on Wednesday said it was looking at limiting the use of CDS, which measure the cost to protect governments against default.

This follows an announcement by Christine Lagarde, the French finance minister, that Paris was considering clamping down on these instruments, which have been blamed by some politicians for fuelling the Greek debt crisis.

Greek officials have attacked speculators for driving higher the cost to insure their bonds against default in an attempt to make profits from instability in the Athens’ debt markets.

Leo Dautzenberg, finance spokesman for Ms Merkel’s Christian Democratic Union, said in Berlin on Wednesday: “We’re considering ways to tighten up the rules for CDS. But this has to be internationally agreed.”

Earlier this month, Ms Lagarde said France was studying CDS as they have become “disconnected” from the real economy. Some politicians say the CDS market, largely traded by hedge funds and banks, has worsened the Greek debt crisis by moving violently on only a handful of trades.