FRANKFURT (MNI) - One of the lessons of recent years is that too much debt, whether it be in the household, corporate or public sector comes back to haunt you, Riksbank Governor Stefan Ingves told the Financial Times in an interview published Wednesday.

The governor of Sweden's central bank also warned that in the future central banks may have to intervene more aggressively in the financial sector by extending the "punch bowl principle" into that area.

SINGAPORE, May 19 (MNI) - The euro slumped to a new four-year low against the dollar Wednesday morning in Asia but managed to regain some of the lost ground as short-covering then ensued while risk aversion drove regional stock markets lower.

By Vicki Schmelzer

NEW YORK, May 18 (MNI) - A German ban on naked short selling of select eurozone instruments delivered a knock-out punch to the euro Tuesday, with the pair falling to new four-year lows versus the dollar.

Starting at midnight, Germany's financial watchdog BaFin will forbid naked short-selling of eurozone government bonds, shares of the 10 leading German financial institutions, as well as the credit default swaps (CDS) of eurozone government bonds, according to a BaFin report released late Tuesday.

By Dennis Pettit

NEW YORK, May 18 (MNI) - The euro was slammed to fresh four-year lows vs. the dollar in afternoon trading Tuesday, the European currency undercut by a newly announced ban on short-selling of some stocks and bonds by a German regulator.

By Vicki Schmelzer

NEW YORK (MNI) - With risk aversion rising, global investors have made a beeline for U.S. instruments and the dollar, according to BAS/ Merrill Lynch's monthly fund managers survey, released Tuesday.

"May's survey highlights a flight to the U.S., driven by the uncertainty in Europe and underscores a positive U.S. growth outlook," said Michael Hartnett, chief Global Equities strategist at BofA Merrill Lynch Global Research.

BRUSSELS (MNI) - New hedge fund legislation approved by European Union finance ministers on Tuesday are not entirely consistent with the European Union's single market rules, UK Chancellor of the Exchequer George Osborne told reporters on Tuesday.

The UK was overruled by other finance ministries on Tuesday, who want to bring in tough new rules to clamp down on alternative investments, including hedge funds and private equity firms. These are set out in the Alternative Investment Fund Managers Directive, or the AIFM directive.

BRUSSELS (MNI) - National governments must remain the first port of call for national budgets, not the European institutions, new UK Chancellor of the Exchequer George Osborne said on Tuesday.

The European Commission last week set out proposals under which national budget planning would conform to a European timeline and be reviewed by the Council of European Union finance ministers, as part of a broader package aimed at tightening up EU budget rules in the wake of the debt crisis.

FRANKFURT (MNI) - Some E16.3 billion in bond purchases under the Securities Markets Programme settled as of Friday, May 14, the European Central Bank consolidated financial statement showed Tuesday.

The new bonds buys are included in the items "securities held for monetary policy purposes."