Battle Lines Drawn Over CDS In Europe

European governments are pushing forward with a proposal to limit credit default swaps (CDS) on sovereign debt, but it remains to be seen if financial institutions will push back on the measure.

The European Commission summoned representatives from banks, hedge funds, crediting rating agencies and regulatory bodies to a meeting in Brussels Friday, to discuss the measures needed to rein in speculation in the derivatives markets.

"A ban on sovereign debt CDS may not be a panacea in putting an end to speculative bets against the external debt of a country, but it can be a helpful step in cooling the current strong negative sentiment against the most heavily indebted Eurozone countries," according to Anthony Karydakis, an economics professor at NYU's Stern Business School.

Note EU-Digest: Its high time something gets done to put some clarity into the nebulous financial markets.

For more: Battle Lines Drawn Over CDS In Europe - Forbes.com