German Cabinet approves trading curbs bill

June 2, 2010 8:17:24 AM PDT
BERLIN (AP) - Germany's finance minister says the Cabinet has approved legislation that would anchor in law and expand a ban on so-called naked short selling of stocks and eurozone government debt. It wasn't clear when parliament would consider the plan approved by ministers Wednesday.

Germany's regulator surprised markets last month by banning naked short-selling of eurozone government debt and major financial stocks.

The legislation would extend it to all stocks. Finance Minister Wolfgang Schaeuble has said it could be superseded by future European regulation.

Short-selling is a way of betting an asset will go down by borrowing securities and selling them in hopes of buying them cheaper later. Naked short-selling involves selling shares without first borrowing them.