- Germany's Short-Selling Ban Lacks the Political Muscle to Go Global
- What Does Germany's Credit-Default-Swap Ban Mean for You?
German Chancellor Angela Merkel said that the ban would remain in place until the EU comes up with a comprehensive plan for financial reform.
"This will all remain in place until other rules are established on the European level," she said.
The financial institutions that have been profiting from this type of speculation immediately went on the offensive.
German officials justified the surprise, unilateral move by financial regulator BaFin by stating that the "exceptional volatility" in government debt - if accompanied by massive short-selling and naked CDS trading - could result in excessive price movements that would actually "endanger the stability of the entire financial system."