French President Nicolas Sarkozy and German Chancellor Angela Merkel took the lead to call for transparent financial derivatives trading in Europe, according to a letter published Thursday by the Elysee Palace. Sarkozy and Merkel jointly wrote the letter with Luxembourg and Greece leaders addressing European Commission President Jose Barroso and Spanish President Jose Luiz Rodriguez Zapatero. They called for an investigation into the role of credit default swaps (CDS) in the trading of government bonds between European peers and proposed a ban on speculative CDS trading. In order to prevent uncertainty in the markets that created by speculative activities, 'we propose ... the commission initiate as soon as possible an inquiry into the role and impact of speculation linking with CDS trading in the government bonds of European countries,' the letter said. 'If the investigation exposes market abuses or there is a well- founded suspicion that speculative practices have considerable impact on the interests, we will quickly examine measures and to take action to adopt necessary laws and regulations to terminate it,' the letter added. In the letter dated March 10, the leaders also proposed EU commission to intensify regulations on tradings concerning financial derivatives and to initiate a share database on CDS in Europe and called a ban on speculative CDS trading. 