Definition Of


Haircut is the difference between the market value of a security and its value when used as collateral. The haircut is intended to protect a collateral taker from losses due to declines in collateral values

Share it:

More from this Section

  • Risk structure of interest rates
    Risk structure of interest rates is the relationship among the interest rates on various bonds with the same term to maturity.
  • Federal agency securities
    Federal agency securities is the marketable notes and bonds sold by agencies owned by or started by the federal government, such as the
  • Actuary
    Actuary is insurance company official, responsible for estimating future claims and disbursement and for calculating necessary fund and premium levels.
  • Sterilized foreign exchange intervention
    Sterilized foreign exchange intervention is a foreign exchange intervention with an offsetting open market operation that leaves the monetary base unchanged.
  • Unit banks
    Unit banks is the banks that offer the full range of their services from one office, though a small number of services (such as taking deposits
  • Herfindahl-Hirschman Index
    Herfindahl-Hirschman Index is a summary measure of market concentration used by the U.S. Justice Department, in which the
  • Equity reserves
    Equity reserves is the type of bank capital representing funds set aside for contingencies such as losses on assets, legal action against