Text tabled : A7-0055/2011

  Arlene McCarthy (S&D), in writing. − Labour MEPs back the prohibition on naked short selling and naked credit default swaps (CDS). While CDS can have a useful insurance role, there is no benefit to society in allowing people to insure something they do not own, while there are risks to such practices. That is why it is illegal to take out an insurance policy on your neighbour’s life. These practices are part of the culture in the financial system which led to the financial crisis and this legislation will help address this.

The US, Japan, Hong Kong, Australia and Brazil have already prohibited naked short selling, and so adopting this law would also follow global best practice. Hong Kong has always banned naked short selling, and during the financial crisis their markets performed better and were more stable. Today’s vote showed Parliament’s strong backing for this report and it is now for Council to respond and enable Europe to strengthen its financial regulation and prevent future crises.