news blog from Carolin

* UK alone against banning deal - sources* EU watchdog ESMA set to get banning powers* News conference called for 1730 GMTBRUSSELS, Oct 18 (Reuters) - The European Union will ban “naked” or uncovered credit default swaps (CDS) to curb what some policymakers see as hedge funds bets on the euro zone crisis, two EU sources said on Tuesday.The measure has been deadlocked for months because of a split between the European Parliament and EU states, who have joint say. Both sides meet on Tuesday afternoon with a news conference scheduled for 1730 GMT.”The final point of negotiation relates to the ban on naked sovereign credit default swaps (CDS), those used for a purely speculative aim,” said Pascal Canfin, the French Green Party member who is leading the parliamentary team.Parliament has already voted to ban CDS contracts, a form of insurance against default, where the holder does not own any of the underlying government debt being insured.But European Union states have said this is a step too far and proposed curbing short-selling of the government debt itself, and only if the country in question agrees.Two sources familiar with the negotiations said a compromise has been reached to ban naked sovereign credit default swaps but allow individual EU states to opt out if they think their sovereign debt market risks being damaged.”The negotiations will be on the fine tuning, the exact scope of the ban and the conditions of the opt out,” one of the sources said on condition of anonymity.Member states would be able to opt out on the first signs their debt market was not working properly, with Britain alone in saying this was still too restrictive, a second EU source said.Policymakers accused hedge funds last year of using CDS contracts to bet on a Greek default, a step they said made it more expensive for the EU to rescue Greece. It prompted French President Nicolas Sarkozy and German Chancellor Angela Merkel to call for the draft law.But a study for the European Parliament said a ban on naked CDS would have “detrimental effects on liquidity and the price discovery process of credit risk”.Hedge funds say the CDS market is too small to manipulate the far bigger sovereign debt market and that government bond prices have tumbled in Greece and elsewhere in the euro zone because of investor worries over the level of public debt.DISCLOSURESThe measure aims to avoid a repeat of confusing unilateral national curbs on short-selling in financial shares in 2008 after the collapse of U.S. bank Lehman Brothers.Italy, Spain, France, Belgium and Greece reintroduced short-selling curbs this summer while other EU states like Britain refused to join in.Such curbs are disputed by exchanges and some academics, and failed this summer to stop a rout in French banking shares as the euro zone crisis sent investors scurrying.The European Securities and Markets Authority would have powers to override national supervisors and impose temporary pan-EU share short-selling bans in times of market turmoil.The new law will also impose reporting requirements on short positions in shares and sovereign debt.Shorting stocks would only be allowed if prior arrangements have been made to borrow the stock to ensure prompt settlement of trades or that there is reasonable certainty the stock will be available.

“We declare the results being reported by the National Election Commission as fraud and (they) are consequently declared null and void by all parties signatory to this release,” according to a statement read over the phone to Reuters by a top CDC official. The official, who asked not to be named, said it had been signed by nine parties.

(Polish Parliament with its cross over the door on the left, July 1, 2011/Wojciech Olkusnik)

* Eyes on China dataBy Chikako MogiTOKYO, Oct 13 (Reuters) - Asian shares rose on Thursday on growing hopes that Europe is taking concrete steps to contain the region’s debt woes and head off a systemic banking crisis.Strengthening investor confidence in the euro zone underpinned the single currency, while receding concerns about the banks’ problems threatening the wider financial system sharply tightened Asian credit markets.MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.6 percent, following a 1.4 percent gain in the MSCI world equity index , which posted an increase for the sixth session in a row on Wednesday.The Nikkei average opened up 1.07 percent on Thursday. On Wall Street, the benchmark S&P 500 stock index compiled a gain of 9.8 percent over the past seven sessions, its steepest advance since mid-March 2009.The euro stayed bid early in Asia on Thursday, having jumped to a near one-month high on the dollar as Europe took a step closer to shoring up its financial rescue fund.Lawmakers in Slovakia struck a deal on Wednesday to ratify a plan to bolster the euro zone’s rescue fund by Friday, effectively ending a crisis that had threatened the currency’s main safety net. Slovakia is the only country in the 17-nation bloc left to approve the revamp of the fund.Adding to the sense of urgency, the President of the European Commission, Jose Manuel Barroso, said Europe needed to take decisive action on Greece and outlined a broad plan to contain the debt crisis.As European officials step up efforts to provide a more specific roadmap to resolve its debt woes and recover investor confidence, the European Union is expected to announce a bank recapitalization plan designed to cushion the impact any default by Greece could have on the region’s banks.Germany and France, the leading powers in the bloc, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit on Oct. 23.In credit markets, which had been feeling the strain of waning confidence in the financial system in recent months, the iTraxx Asia ex-Japan investment grade index narrowed by about 15 points.Oil prices fell on Thursday, with Brent crude futures down 0.1 percent at $111.21 a barrel after rising the day before for an 11.6 percent gain over six sessions. U.S. crude futures fell 0.85 percent to $84.84 a barrel, after snapping a five-session streak of higher closes on Wednesday.Asian markets are focused on China’s trade data due at around 0100 GMT to gauge the strength of the world’s second-largest economy.A stronger-than-expected reading would boost investor confidence about a soft landing for the Chinese economy, while a weaker outcome would add to worries about global growth.