The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XI. The security collateral loan market

Collection:: Economics Books

SECURITY COLLATERAL LOAN MARKET 295 in charge may find its collateral securities unacceptable for some reason suggested above, in which case the borrower may be forced to make up a new collateral envelope containing more or better securities. But if the collateral at first furnished is satisfactory to the lender, the latter places the envelope in his safe and pays to the borrower the principal of the loan. Lenders’ requirements are so well understood by bor- rowers in Wall Street that ordinarily any exceptional features in respect to collateral are eliminated by the borrower at the outset. Loans possessing such unusual collateral features are usually negotiated direct between lenders and borrowers, in- stead of through the Stock Exchange money desk, in order to avoid misunderstandingss and delays. The Termination of Call Loans.—Call loans may be termi- nated either by the lender “calling the loan,” or the borrower on his own volition “paying it off.” If desired, the payment of money and delivery of securities involved in terminating a security loan can be handled through the Stock Clearing Cor- poration.’ But if this is not done, and the matter is handled “ex-Clearing House,” the borrower must present a certified check for the principal and interest of the loan to the lender, whereupon the latter returns to him his security collateral. Renewal of Call Loans.—QOn any given day, new call loans made together with old loans called or paid off, constitute only a very small percentage of total call loans outstanding, of which over 95% are in fact simply “renewed” each day. But the interest rate applying to a renewed loan is not necessarily that originally stipulated when the loan was first made, but instead the “renewal rate” for each day that it is thus renewed. Conse- quently, a call loan may actually remain outstanding for a considerable period, and its interest rate will be marked up or down each day according to the latest renewal rate. This renewal rate for call loans is not an “official rate,” but only an estimate of the fair rate for call money made after See Chapter XIV, p. 374.

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