The US: what happened then?
Article Abstract:
Analysis is offered as to what happened in US stock markets in the Oct 1987 crash, and discussion is presented of recommendations made in studies which were conducted in the wake of the crash. The President's Task Force on Market Mechanisms recommends that the Federal Reserve assume responsibility for coordinating US financial markets, which would reduce the authority of the SEC and the Commodities Futures Trading Commission. The Task Force also concludes that speculative investment activity could be reduced by increasing margins required on futures instruments. A New York Stock Exchange (NYSE) sponsored report suggests instead that financial futures market regulation should be transferred to the SEC. The NYSE-sponsored group suggests that settlement of index futures contracts be made in shares rather than in cash. An SEC report recommends more review of index futures margin levels.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1988
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Futures markets face regulatory backlash
Article Abstract:
The US financial futures market has been the object of much attention since the Oct 1987 stock market crash, and many regulatory proposals have been issued as a result. These proposals would serve to reduce the leverage and transaction cost advantages of futures instruments over their securities counterparts. A study commissioned by the Chicago Mercantile Exchange (CME) finds no evidence that the futures market led to the stock market decline, however, and the CME therefore considers many of the proposed regulations inappropriate. Curtailing the US financial futures market could damage the stock market's pricing mechanism and lead to absorption of the futures market by the stock market.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1988
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Rights issues: evaluating management performance
Article Abstract:
Is a stock drop associated with a rights issue of shares an indication of management performance? In fact, it looks like a better indicator of management's ability to tell the public the relevant facts. The pricing of rights issues seems to reflect the fact that managers do not consider markets to be efficient.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1986
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