The new capital adequacy framework (Basel II) is one of the most fiercely debated topics the financial sector has seen in the recent past. Following a consultation process that lasted several years, the regulations formally took effect on January 1, 2007. The advanced approaches (the advanced...

As a reaction to the general suspicion that margin loans had been a key element of the stock market boom and crash of the late 1920s, the Federal Reserve Bank was empowered to regulate margin lending with the Securities and Exchange Act. The efficacy of the Federal Reserve's margin policy has...