what were some safety nets put into the stock market after the 1929 crash?

[vandelay industries]

i am writing a paper and am looking for some of the things that were changed after 1929 to help stabilize and insure the market.

[cold_fearrrr]

One major thing is that banks do not loan money for you to buy stock. Prior to the depression banks loaned up to 90% on stock purchases.

Edit: How many people can get a $100,000 personal loan?

In 1929 you could take $10,000 and a bank would loan you $90,000 to buy stocks. Stocks always went up they thought. If they did fall then a margin call would be issued and the borrower had to come up with more collateral. When the crash occurred margin call after margin call went out. Soon the borrowers could not come up with cash and the banks took big looses just like the housing bubble. Banks loaned money to people with little equity because houses were the ladder to wealth. The banks took a soaking. They did not learn.

Today you can borrow money to buy stocks on margin from your broker if you have a minimum amount of cash. Generally when your equity falls to about 35% tthen a margin call is issued. If you do not meet it then they sell the stock.

Also today stocks under $5 cannot be shorted. There are circuit breaker s that shut off trading when it falls a certain amount in a certain time frame. The SEC regulates the market. It sets margin requirements. It requires reporting by companies and it decides how companies may go about issuing and selling new stock.

[perfectlybaked]

None that haven't been torn to shreds.

Isn't FDIC one of them?

As far as the above answerer, well, can't you get a personal loan from a bank, and turn around and buy stocks with it? That would be the same as getting a loan for stocks.

[Carole W]

you buy tax free bonds and Treasury bonds and ytou will be fine
Save for a rainy day never spend more than you can afford, and invest wisely

[muncie birder]

Right after the crash, in 1933 congress passed the Securities Act of 1933. This act required that investors receive financial and other significant information concerning securities being offered for public sale; and prohibited deceit, misrepresentations, and other fraud in the sale of securities.

In 1934 congress passed the Securities Exchange Act of 1934. This created the Securities and Exchange Commission. The Act empowered the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs). The various stock exchanges, such as the New York Stock Exchange, and American Stock Exchange are SROs. The National Association of Securities Dealers, which operates the NASDAQ system, is also an SRO.

This act also gave the Federal Reserve authority to regulate margin requirements for the purchase of securities.

Throughout the years since 1929 there have been various rules and regulation put in place regarding the purchase and sales of securities. Some temporaray and some more perminent.

Of course we can not ignore the Social Security Act which came out of the great depression, not specifically from the 1929 crash though.