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EU Moves Ahead with Financial Reform

The European Union is targeting more of the financial practices that are blamed for prompting the financial crisis.

European Union Internal Market Commissioner Michel Barnier laid out proposals Wednesday to establish clear rules for so-called "short selling" and the trading of derivatives.

"Short selling" allows investors to bet that the price of something will fall, and has been blamed for destabilizing vulnerable markets.

The proposals also call for financial firms and investors trading in derivatives to give regulators more information. Derivatives are complex financial instruments based on the value of some other product.

Barnier said the proposed rules are in line with restrictions already put into place in the United States.

The proposals could take effect in 2012 if they get the backing of EU governments and the European Parliament.

Earlier this month, the EU agreed on final details of a plan to create new supervisory bodies to monitor financial transactions and the banking and insurance industries.

European leaders including French President Nicolas Sarkozy and German Chancellor Angela Merkel have been pressing the EU to speed up efforts to adopt more stringent financial regulations. On Wednesday, Ms. Merkel told the German parliament she will continue to push for additional regulation, including a proposal to tax financial markets.

The proposal has so far failed to gain support from other key Group of 20 countries.

EU governments first agreed to create the new financial monitors late last year, following months of difficult negotiations about the extent of their power.

Some information for this report was provided by AP, AFP and Reuters.