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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (6724)	9/25/1998 1:31:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 9980

bp, Most of the excessive leverage has been in currencies and bonds. The Fed raising margin requirements on equities would only have hit a small segment of the hedge fund industry and would have hit the general market much harder. In order to get at the real leverage in the hedge fund industry the best course of attack would be to raise bank capital requirements on this type of lending. But the Fed cannot do this unilaterally, they need the co-operation of other central banks and the SEC. I realize I may be getting a reputation as being an apologist for the Fed but when you read the Barron's and other periodicals this weekend take careful note of who is announcing big losses. There are no US commercial banks on the list. Those are the people the Fed regulates. The big losers are Swiss and German commercial banks and US investment banks. The US investment banks are more the province of the SEC. The Feds best course of action would not be raising margin requirements but getting the cooperation of the other major central banks to increase capital requirements for this activity. That would be the most effective and targeted approach. Henry