The ban on credit default swaps is not on short-selling but on buying credit protection for credits you don’t own. Traders are forbidden to buy insurance on bonds they don’t own.

This is prompting CDS spreads to contract across of Europe.

  • Greece has come in 58 bp to 607 bp
  • Ireland has fallen 10 bp to 199
  • Portugal has come in 9 bp to 271 (all prices according to Reuters)