On This PageMay, No. 09

Great natural disasters bring in their wake calls for government action to prevent, or at least lessen the impact of, the next occurrence.


Setting Futures Margins: Who?...and How High?
Last Updated: 05/27/88

Preventive measures, whether for natural or economic disasters, are not without cost. Some may even be counterproductive. This Letter examines one such proposal—to federally regulate and raise margins on stock index futures to bring them in line with margins on stocks—and finds that its proponents have yet to make a convincing case for higher margins on these financial tools.