In theory, it will mean fewer participants which reduces liquidity. In practice, I'm not sure if it will matter. Why does the government need to protect citizens from losing their money? If they have large losses due to excessive leverage, that's their problem. Know the ropes before you dive in.
Well, I don't know... I don't claim to be any sort of expert, but wouldn't it have been useful if the mtge mkt were a wee bit more regulated and some of the more tasty negative amortization ARMs didn't come into existence?
Not true. You HAVE to fill out a form if you drop 10k in cash on the table. No way around this except maybe to use a marker, but then again, they would need your name to extend you that credit.
There's a world of difference between massively over leveraged gambling banks causing systemic risk that will effect THIRD PARTIES and Joe Retail FX using 400:1 leverage on his $5,000 account that effects no one but himself. I don't see how you (or anyone else) canNOT see the difference. It's not the government's or anyone else's business how much leverage I choose to use. No one else is worse for the wear if I blow out my piddly retail account.