European officials pushed the United States to become involved in an attack against speculators who wage against Europe's currency union. The officials cautioned that the possibility of banning some credit default swaps was being considered. Credit default swaps, a type of insurance for buyers to insulate them in the event a buyer or seller would default on a bond. They are thought to have contributed to exacerbating the global financial crisis.
Representatives from both Germany and Greece have called upon the U.S. to make a gesturing in helping to reduce the trades. George Papandreou, Greek’s Prime Minister is asking for cuts in speculation which he attributes to worsening his nation’s already debilitating debt problems.
The European Commission spoke out against "purely speculative naked sales on credit default swaps of sovereign debt," threatening to eliminate them and requesting global support on the matter. They will broach specifics at a meeting of major and emerging economies in June.
In the nakes sales referred to by the commission a buyer is able to turn a profit on a swap without the risk of holding the underlying profit.
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