Academic Publications, On Margins Requirements

Price Volatility and Futures Margins

Price Volatility and Futures Margins
Authors: Gikas A. Hardouvelis, Dongcheol Kim
Journal: The Journal of Futures Markets, Vol. 16, No. 1, 81 -111 (1996)

Abstract: The October, 1987 stock market crash renewed interest among regulators and economists in the role of margin requirements in futures contracts, Margin requirements  became the focus of considerable debate following the January, 1988 recommendations of the Presidential Task Force on Market Mechanisms headed by Treasury Secretary, Nicholas Brady. The “Brady Report” argued that: One agency should coordinate the few, but critical, regulatory issues which have an impact across the related market segments and throughout the financial system. . . . Margins should be made consistent across marketplaces to control speculation and financial leverage. (p. 7, Executive Summary)

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