A study commissioned by the G-20 concludes that it can't beproved that short sales of credit-default swaps are a problem forunderlying government bond markets. The report by the InternationalOrganization of Securities Commissions (IOSCO) follows criticismthat hedge funds' short sales of CDS worsened Greece's debtproblems.

The European Union approved a law to ban “naked” or uncoveredshort-sales of CDS in November, yet the amount of CDS trading hascontinued to increase, and there is evidence that the CDS market isunder-collateralized, according to IOSCO.

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