Money, Banking, and Investment

The Columbia Encyclopedia, 6th ed. A Dictionary of Business and Management Further reading

margin requirement

The Columbia Encyclopedia, 6th ed. | 2011 | Copyright

margin requirement that part of a security's price that a buyer must pay for in cash. The balance of the price is met by the broker, who, in effect, is supplying a client with a loan. The smaller the margin, the greater the inducement to speculation. Low margin requirements were considered an important cause of the 1929 collapse of the American stock market. In 1934, the Securities Exchange Act gave the Federal Reserve Board the power to regulate margin requirements. The amount has been reset at various times, but in recent years, the Federal Reserve has instituted a 50% margin requirement with a $2,000 minimum.

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maintenance margin

A Dictionary of Business and Management | 2006 | Copyright

maintenance margin The minimum margin required in a brokerage account by a particular exchange or brokerage firm.

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Free newspaper and magazine articles

	Regulators Propose Minimum Margin Requirements For Uncleared Swaps. News Wire article from: Mondaq Business Briefing; 4/21/2011
	The adequacy and consistency of margin requirements in the markets for stocks... Newspaper article from: Federal Reserve Bulletin; 9/1/1989
	Companies worried about Federal Reserve rule on margin requirements.(GOVERNMENT) Magazine article from: Strategic Finance; 5/1/2011