European Parliament's proposed ban on naked short selling of
credit default swaps (CDS) may affect the reliability of
pricing and could even reduce attractiveness of the product as
"It's an error. I think it's an overreaction," said Barney
Reynolds from Shearman & Sterling in London.
"It seems to me that shorting is a proper and necessary
counterbalance for price discovery purposes, and that banning
naked shorts is likely to dampen the efficient use of
He added: "So long as there's proper policing of improper
shorting, which is possible under existing regulation, there's
no necessity for...