* Officials trying to deter speculators during crisis
* Spanish intelligence also said to be probing speculation
* Traders sceptical of reports, see little if any impact
* Regulatory reform already underway, new moves unlikely
(adds no comment by Paulson, background on regulatory reform)
By George Georgiopoulos
ATHENS, Feb 19 (Reuters) - Two Greek newspapers said on Friday the country's EYP intelligence service, investigating speculative attacks on Greece in money markets, had identified U.S. and British firms as aggressive sellers of Greek bonds.
The finance ministry said it would not confirm the reports, neither of which alleged that laws were broken. A government spokesman said EYP had not been asked to undertake such a probe.
"There is no such action, no such decision. Beyond that, of course we are doing our analysis, trying to determine where these speculative games originate," government spokesman George Petalotis told reporters.
The press reports, which follow criticism of speculative trading by senior politicians in Europe, may be part of efforts by officials to deter hedge funds and other institutions from conducting trades that worsen instability in Greek asset prices.
Greek bonds and stocks have been hammered since a socialist government elected in October revealed last year's budget deficit had ballooned to a projected 12.7 percent of gross domestic product, over four times the European Union's limit.
While much selling has been conducted by long-term investors alarmed by Greece's debt crisis, traders say shorter-term speculators have been involved; some have laid bets in the market for credit default swaps (CDS), used to hedge against the possibility of a Greek debt default. [ID:nLDE6111UV]
"EYP has managed to unravel the strands of speculation entangling the country," the centre-left To Vima newspaper said on Friday, without quoting any sources.
It said four asset management firms identified by Greek intelligence were London-based hedge fund manager Brevan Howard, and U.S.-based Moore Capital, Fidelity International and Paulson & Co, all alleged to have sold Greek bonds since December.
The centre-right Kathimerini daily said EYP had found data confirming there was coordinated action -- legal but speculative -- by foreign firms including Brevan Howard, Europe's biggest hedge fund firm, and Pimco, the world's largest bond fund.
Brevan Howard said in a letter to investors it had no short exposure to Greek debt since mid-December, and that it had no plans to short the bonds or buy CDS in the foreseeable future.
Moore Capital declined to comment; Pimco said it does not comment on market rumours. Paulson said it would not comment on its underlying positions.
A spokeswoman for Fidelity said: "Fidelity International's bond funds do not actively sell short any government debt other than for hedging purposes.
"Market stability is very important to us as long-term investors, and we would never engage in any practice that we believe would be detrimental to an efficiently functioning, liquid market."
On Sunday, Spanish daily El Pais said intelligence services in Spain, another indebted country under pressure from the debt market, were probing "speculative attacks" against the country.
Greek Prime Minister George Papandreou, who has denounced "profiteering" in the markets at the expense of Greece, said in London on Friday that governments had the power to control bond market speculation, if they could find the will. [ID:nLDE61I1T9]
On Thursday, French Economy Minister Christine Lagarde called for better regulation of the CDS market. [ID:nPAB008184]
Many traders doubt that press reports of activity by intelligence agencies and statements by politicians will deter funds from seeking to profit from the Greek crisis.
The statements appear largely aimed at placating public opinion, which is suspicious of financial speculators after the global credit crisis, and probably do not herald new regulatory initiatives, traders believe.
And in markets as large and liquid as Europe's, most funds are likely to be able to find trading strategies and vehicles that conceal the extent of their speculative activity.
"I don't think it has had any impact in the market, and we think the view is very, very far-fetched," a trader at a major bank in London said of the Greek newspaper reports.
Regulatory reform is already underway, however, that could eventually make some trading more transparent and cause hedge funds to be more circumspect in their activities.
Following pressure from the European Commission, brokers began centrally clearing CDS contracts in mid-2009. The European Union is set to publish a draft law by July to make central clearing, which aims to cut risk by backing trades with a default fund, mandatory for a wider range of derivatives.
The EU is also adopting a law to regulate hedge funds directly, requiring them to obtain authorisation and report an array of data to supervisors from around late 2012.
The British-based Alternative Investment Management Association, which represents hedge funds, said on Friday that data suggested the big players in Greek debt were overwhelmingly continental European banks, not U.S. or British hedge funds.
It said the Greek CDS market was small, with deals worth about 8 percent of Greek government bond deals, and Greece's CDS exposure was only about 4 percent of its government debt. (Additional reporting by Natsuko Waki, Huw Jones, Laurence Fletcher and William James in London; Editing by Paul Taylor and Andrew Torchia)