The Federal Reserve Board sets the margin requirements on security purchases.

Question

Quizplus · Accepted Answer

The Federal Reserve Board does have the authority to set margin requirements on security purchases, which is the amount of equity or cash that an investor must put up in order to borrow the remaining funds to purchase securities. This is one tool that the Federal Reserve uses to regulate the availability of credit in the economy and to manage risks in the financial system.

The Federal Reserve Board Sets the Margin Requirements on Security