Short selling measures highlight EU oversight flaw

By Huw Jones

BRUSSELS (Reuters) - Separate moves by market watchdogs in Britain, France, Portugal and Ireland to crack down on short selling has shown how much market supervision needs to catch up with EU financial integration, analysts said on Friday.

Britain was first to announce a crackdown on the practice, blamed by critics for fuelling massive falls in banking stocks.

National market watchdogs in France, Portugal, and Ireland took similar steps but there was no coordinated announcement in spite of exchange mergers and new pan-European trading platforms making EU-wide share trading common.

The Committee of European Securities Regulators, made up of national watchdogs from all 27 EU states, may make a statement on short selling later on Friday, regulatory sources said.

CESR and the European Commission had no comment on this.

Critics said the drip feed nature of the announcements was a reminder of the need for more apparent coordination at a time of crisis.

"Certainly the evidence now before us is that European markets are moving as one so there has to be a greater degree of supervisory coordination," said Graham Bishop, an EU financial services expert.

"That's easily said but what's to be done about it. It does force people to realise nasties happen and when they happen you need extreme clarity," Bishop said.