- I welcome a European regulation, but not a permanent ban of products such as CDS. Therefore I recommended the ALDE group to abstain in today's vote. A ban is not the solution to curb speculation; instead it creates uncertainty on the market and may have severely harmful consequences. The new rules create a risk of driving up government bond yields and thus raise of the borrowing costs for the issuers of sovereign debt for EU countries during a time when the markets are extremely volatile, Mr Schmidt says in a comment.
Schmidt argued continuously throughout the trialogue talks for a stronger European framework which creates more market transparency and allows for hedging activities.
- I am in favour of strong reporting rules to the supervisory authorities on naked CDS positions and strong coordinating powers being granted to ESMA, but I´m not in favour of a permanent European ban. This decision was taken on political grounds and is not based on empirical evidence. Today´s decision is a pyrrhic victory for the Greens, EPP, S&D, comments Mr. Schmidt.
Mr Schmidt is also highly critical of the way the negotiations were conducted.
- The negotiating process was carried out in the form of secretive trialogue talks behind closed doors which is totally untransparent. Proposals are put on the table during the meetings and the unintended consequences of the "turf war" between the participants can be devastating. This untransparent and undemocratic decision-making method must be evaluated, Mr. Schmidt concluded.
The report was passed with 507 votes in favour, 25 against and 109 abstentions.
The new regulation must be formally approved by the Council in the coming weeks, and will enter into force in November 2012.
For more information:
Olle Schmidt (Folkpartiet, Swedish liberal party), +46 705 34 10 64
Rickard Ydrenäs, policy advisor, +32 476 767 542