EU ban on naked sovereign CDS is tougher than expected

04/3/2012 | International Financing Review

Analysts warned that the EU's ban on trading of naked sovereign credit default swaps is broader and tougher than expected and could hinder market liquidity. The European Securities and Markets Authority published the rule, which goes into effect Nov. 1. "The sovereign CDS market will continue, but it'll become less liquid, more volatile, harder to trade and less efficient," said Michael Hampden-Turner, head of credit strategy at Citigroup.

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