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Banks tightened margin requirements and haircuts in response to stock market volatility, Fed survey finds

“Overall, the credit officers for a small amount of firms reported an easing in credit terms for their hedge fund clients” writes Senior Economics Reporter for The Fed surveyed credit officers from 23 institutions between May 7 and May 23. The firms account for almost all dealer financing of dollar-denominated securities to nondealers and are the most active intermediaries in the OTC derivatives market.The dealers reported no change in the demand for leverage via margin loans or equity derivatives as a result of the volatility.

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