Part 221 is known for regulating what kind of credit?

Part 221 of the regulation specifically pertains to the rules governing the extension of credit for margin stock transactions. This regulation outlines how banks can lend money for the purchase of securities that are classified as margin stocks, which typically include stocks that are traded on margin, or in other words, stocks bought using borrowed funds.

The primary focus of Part 221 is to ensure that banks adhere to certain standards and limitations when providing credit to customers for these transactions. It is crucial for maintaining the stability and integrity of the banking and financial systems, especially concerning the risks associated with leveraged investments.

Understanding this regulation is important for those involved in banking and finance, as it addresses the risk management practices required while lending for investment purposes. This mitigates potential systemic risks that could arise from excessive borrowing in the stock market.