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Journal Article
Margin requirements on equity instruments
Journal Article
Consistent margin requirements: are they feasible?
Journal Article
Margin requirements and stock market volatility
Journal Article
Margin requirements, margin loans, and margin rates: practice and principles
The Board of Governors of the Federal Reserve System establishes initial margin requirements under Regulations T, U, and X. Recent margin loan increases, both in aggregate value and relative to market capitalization, have rekindled the debate about using margin requirements as an instrument to affect the prices of common stocks. Proponents of a more active margin requirement policy see the regulations as instruments for affecting the level and volatility of stock prices by influencing investors' demand for common stocks. Others believe that the announcement effects of increased margin ...
Journal Article
Security loans at banks and nonbanks: Regulation U
Over the years, the Board of Governors of the Federal Reserve System has established margin regulations to limit purpose loans by banks and nonbanks to broker-dealers or other borrowers. In this study, the author reviews those regulations affecting security lending by banks and nonbanks. He examines data on security loans during the 1920s and 1930s, as well as in recent years, noting that security lending by banks and borrowing by broker-dealers often diverge-the popular notion that the two are tightly linked is not correct-and that during the 1920s the volume of loans by banks to brokers may ...
Journal Article
Margin requirements across equity-related instruments: how level is the playing field?
Investors can participate in the returns on the Standard and Poor's 500 composite index in a variety of ways, and these alternatives exist because they differ in important respects. This article assesses one dimension of these differences-margin requirements. ; Focusing on equity-related instruments, the author develops a model to simulate the values arising from several identical positions obtained by combinations of stocks and stock derivatives. The results are then used to assess the costs of margin requirements on alternative strategies. The primary conclusion is that the playing field is ...