EC measures on derivatives, Credit Default Swaps and short selling to restore confidence in financial markets: extracts from the press conference by Michel Barnier

Type: Summary of press conference   Reference: I-067071   Duration: 10:03:46  Lieu:
End production: 15/09/2010   First transmission: 15/09/2010
On 15/09/2010, at a press conference in Brussels, Michel Barnier, Member of the EC in charge of Internal Market and Services, presented a proposal for a regulation aimed at bringing more safety and more transparency to the over-the-counter (OTC) derivatives market. As part of the European Commission's ongoing work in creating a sounder financial system, the Commissioner also tabled a proposal for a regulation on short selling and certain aspects of Credit Default Swaps (CDS). Its main objectives were to create a harmonised framework for coordinated action at European level, increase transparency and reduce risks.

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10:00:00 Title 00:00:05
10:00:05 General view of the press conference 00:00:04
10:00:09 SOUNDBITE (in FRENCH) by Michel Barnier, Member of the EC in charge of Internal Market and Services, on derivatives, saying that they know the numbers (of transactions) involved, 600.000 billion dollars. They know that this takes place in a very non-transparent way, and they want the light to shine on people who are not used to that. 00:00:16
10:00:26 Cutaway of press 00:00:04
10:00:31 SOUNDBITE (in FRENCH) by Michel Barnier, saying that ransparency alone will not suffice. They also wish to improve the global management of these financial markets thanks to standardisation.So that we can identify and monitor risks better, thanks to registration, almost total registration of the transactions in the so-called trade repositories. 00:00:23
10:00:55 Cutaway of press 00:00:05
10:01:00 SOUNDBITE (in FRENCH) by Michel Barnier, saying that it is a sort of black box of full set of derivatives in all sectors which will be necessary. And also they need to encourage clearing. This was a very important point for him, having spoken at length to those in the industry. He felt that, within the activities of large companies, they needed to draw a clear distinction on the one hand using these derivatives to hedge certain risks, particularly exchanges rate risks; and on the other hand genuinely financial activities. When these large companies behave like banks, they will be dealt with like banks; but when they behave like companies trying to hedge their risks guaranteeing their position and employment in Europe, and then they would not impose these additional constraints upon them. 00:01:01
10:02:02 Cutaway of press 00:00:05
10:02:07 SOUNDBITE (in FRENCH) by Michel Barnier, saying that on short selling, he would recall that a dozen of countries have adopted measures to ban short selling on a temporary basis, not just Germany, but they will done this on a sovereign basis. On this too they need to get priority to a European approach. Again they are driven by the same objective of transparency. Every case of short selling would be flagged. 00:00:43
10:02:51 Cutaway of press 00:00:06
10:02:58 SOUNDBITE (in FRENCH) by Michel Barnier, saying that they have to limit the risks of intensive speculation by shining a light, and by forcing people to be transparent. They have to know on all of these markets, with the Americans and other regions, who is doing what. They want to force the actors who use certain products to say who they are, when they are operating and what products they are using. And he thinks that, against the unrestrained excesses of speculation, their response will force the players to be responsible. 00:00:48
10:03:46 Cutaway of the speakers 00:00:06
10:03:46 Cutaway of the speakers 00:00:06
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