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Banks tightened margin requirements and haircuts in response to stock market volatility, Fed survey finds
A Federal Reserve survey of senior credit officers reported about half made some changes to their counterparty risk management as a result of the sudden return of volatility in the stock market in February, the Fed said Thursday. After a quiet 2017, stocks plummeted in February on interest-rate hike fears, with the S&P SPX, -0.53% and the Dow Jones Industrial Average falling by more than 10% from their record highs, leaving them in correction territory. As a result, the dealers changed margin requirements and haircuts, or made changes to risk limits and their models. Some firms also increased stress tests or had a ... (full story)