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Oct. 10 (Bloomberg) -- An undersecretary for Italian Prime Minister Silvio Berlusconi has proposed a drug-testing program for stock traders, citing studies that point to a “worrisome” link between substance abuse and market fluctuations.
Some Italians may have entrusted savings to people “not capable of making decisions” due to drug use, Carlo Giovanardi said in a phone interview today from Belluno, Italy.
Giovanardi, who’s responsible for the government’s family and drug-abuse prevention policy, said he plans to contact regulators and industry groups working with the stock exchange to discuss the drug-testing plan. The program could be developed without the passage of a new law, he said.
The Italian exchange, Borsa Italiana, didn’t have an immediate comment, said a spokeswoman, who declined to be identified citing policy.
Giovanardi, who last year promoted a voluntary drug test for members of parliament, also cited “U.S. studies” suggesting recent market turmoil may have been amplified by “people who’ve lost touch with reality” due to drug use. The undersecretary said cocaine use has a “devastating” effect on individuals, leading to “brain meltdown.”
Giovanardi’s proposal was earlier reported by the KlausCondicio web channel.
Italy on Sept. 28 extended a ban on short-selling of financial shares to Nov. 11. The country’s benchmark FTSE MIB index has fallen 20 percent this year compared with a 17 percent decline for the Stoxx Europe 600.
--With assistance from Chiara Remondini in Milan. Editors: Jerrold Colten, Dan Liefgreen
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