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To: John Stichnoth who wrote (21204)	3/24/2000 12:20:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

It's only the onset of the new requirements that might cause disruption. For instance, if someone is operating on 40% margin, and the Fed changes the rule to 35%, he's immediately got to provide cover or get sold out. Please tell me that the Fed would be smart enough to give at least one month's warning by announcing it one day and making it effective 30 to 60 days later. --Mike Buckley

To: John Stichnoth who wrote (21204)	3/24/2000 1:13:00 AM
From: BDR	Respond to of 54805

<<the assumption is that tighter margin requirements would decrease volatility and the related chance of a "speculative bubble".> If the Fed listens to its Senior Economist they won't use margin requirement changes to regulate volatility. It looks like the Fed was first authorized to regulate margin in 1934. bog.frb.fed.us Margin Requirements, Volatility, and Market Integrity: What Have We learned since the Crash Paul Kupiec, Senior Economist, Board of Governors of the Federal Reserve System From the abstract: ...finds no undisputed evidence that supports the hypothesis that margin requirements can be used to control stock return volatility and correspondingly little evidence that suggests that margin-related leverage is an important underlying source of "excess" volatility. ......