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Investment Banking

Margin calls bite investors and banks

Loans backed by investment portfolios have become a booming business for Wall Street brokerages, but the bill is coming due

Margin calls bite investors and banks
Photo: iStock

Loans backed by investment portfolios have become a booming business for Wall Street brokerages. Now the bill is coming due – for both the banks and their clients.

Some lenders, including Bank of America, are issuing margin calls to clients after the global market drubbing of the past week, forcing investors to choose between either putting up more money or selling some of the securities underlying the loans.

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