EU goes after Credit default traders

(Bloomberg): Sovereign credit-default swap transactions face mandatory disclosure rules the European Union’s financial services commissioner said Monday Michel Barnier said he would deal with the sovereign CDS market “very severely.” Credit-rating companies should also be subject to tougher transparency rules when rating a country’s ability to pay back its debt, he said. “These people don’t like being out in the light of day,” Barnier said of sovereign CDS traders at a press conference in Brussels. “We’ll flood them with light.”German Chancellor Angela Merkel and French President Nicholas Sarkozy have called for curbs on speculating with sovereign credit-default swaps, which many blame for exacerbating Greece’s fiscal woes.

They have also called for a review of European Union rules regulating credit-ratings companies.