Setting Futures Margins: Who?...and How High?
Herbert L. Baer , Maureen O'Neil
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.
