The "Report on Sovereign CDS", released to a Dutch newspaper following a freedom of information request said: "The empirical investigation that has been conducted by the task force on how the sovereign CDS and bond markets interact provides no conclusive evidence that developments in the CDS market causes higher funding costs for member states." It also concluded: "The analysis of the fundamental factors shows that the differences in bond and CDS spreads across countries are justified. Government deficits, debt levels and current account deficits give a consistent picture of vulnerabilities."

Fears that Greece would default on its debt were rife earlier this year and politicians expressed suspicion that it was caused by speculators trading in the CDS market. In a joint letter dated March 10 2010 to EC President José Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, Luxembourg Prime Minister Jean-Claude Juncker and Greek Prime Minister George Papandreou wrote: "We… propose that the EU Commission initiates as quickly as possible at European level an enquiry into the role and impact of speculative practices in connection with CDS trading in the government bonds of European countries.

A spokesman for the Association for Financial Markets in Europe, which promotes fair, orderly, and efficient European wholesale capital markets, said: “What we were seeing was a perfectly understandable market reaction to the underlying state of the Greek economy. The market functioned exactly as a market should, which is why we felt the ban on short selling that was introduced in Germany was not particularly effective measure. Regulation should tackle market failure as a principle. While nobody was particularly happy with the situation, the bond crisis was not a sign of market failure, it was a sign of the market operating in a very efficient way.”

It’s a pity however that it was not released when it was originally written earlier this year, because informed analysis of this sort would have created a more reasoned public debate. Given that the Commission’s own report has concluded that sovereign CDS trading did not cause the sovereign debt crisis in the eurozone and indeed contributes to sovereign bond market liquidity and financial stability, we hope that those policymakers who are still advocating radical curbs on the sovereign CDS market will take note.”