Last month’s decision by Germany’s regulators to impose a ban on short selling of sovereign credit default swaps and all stocks traded in Germany could benefit the US corporate bond markets, as investors move to a jurisdiction with more regulatory certainty and as growth prospects between the regions decouple.
“There is a risk connected with how Europe handles the current sovereign credit problem. There is a danger that the European markets could shut down if market participants continue to see uncoordinated government action,” says Gaël de Boissard, co-head of global securities at Credit Suisse in London.
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