"I think we should be exploring all possibilities of regulation and transparency and the obligation to go through clearing houses," Barnier, an EU commissioner, told reporters on the sidelines of a visit to senior financial figures in London.
Barnier, who has sole power to propose pan-EU financial regulation, said he had never used the word "ban" regarding CDS but that it had not been ruled out.
Greece has accused speculators of using "naked" sovereign CDS contracts - where the holder has no stake in the underlying debt - to bet that its parlous financial situation would get worse.
Regulators in Britain and Germany say there is no evidence of major abusive speculation in sovereign CDS markets or the need to rush into taking emergency steps. Barnier said he wanted to work "seriously and without improvisation".
"I don't speak about a ban. I speak about a framework of rules and transparency," he said in a speech on Wednesday evening.
He will also propose regulation for derivatives markets in general in June that will focus on central clearing and reporting transactions to trade repositories.
A bank levy to payback bailouts
A tax on banks was needed to pay for bailouts but the form of such a levy was yet to be determined, Barnier said, reflecting a lack of consensus among EU states (EurActiv 01/04/10).
"It's a debate that has started. There are many proposals - Franco-German, here in London and in the United States," Barnier said.
"I don't want to state a view on the basis of this tax or its earmarking, but I do think a contribution is necessary and legitimate," he said.
Barnier will present EU finance ministers with a discussion document on crisis management of banks at a meeting in Madrid later this month ahead of a key meeting of the International Monetary Fund and G20 finance ministers on the issue.
"In this global framework there is, of course, the question of a financial contribution that comes up," Barnier said, adding that this would not be in the form of a transaction or Tobin tax.
France, Germany and Britain have called for a tax or levy that reflects the risks posed by a bank. Germany wants the levy to go into a special bailout fund, but France and Britain want the cash for general national coffers.
The Commission sees that a "realistic option" is a network where national systems operate within a common European framework but that part of proceeds goes towards a resolution fund rather than all to national coffers.
Banks have been guilty of paying bonuses that were "insane in some cases" and curbs were needed on disproportionate awards for performance, Barnier said.
He is still facing opposition from Britain and the United States, the world's two main hedge fund centres, to draft EU rules to crackdown on the sector.
Barnier to discuss financial regulations in Washington
US Treasury Secretary Timothy Geithner wrote to Barnier last month about his concerns over the restrictive impact of the draft rules on US hedge funds.
Barnier said he was "not overly impressed" by the letter but would raise this when he visits Washington this month.
He said the EU was simply applying a regulatory blueprint and the United States agreed as members of the G20 group of countries to regulate all parts of the financial system.
"We have a responsibility to implement this in parallel with the Americans," Barnier said.
Real equivalence in transatlantic rules should also apply to accounting standards and the "question of equal access, for example, in public procurement contracts," Barnier said.
French and German officials reacted angrily last month when Northrop Grumman, a former partner of European aircraft maker EADS, withdrew from a US bidding competition after concluding its terms favoured a plane made by Boeing Co.
(EurActiv with Reuters.)
