Definition

Haircut

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:  Cite

More from this Section

  • Foreign Exchange Market
    The foreign Exchange Market allows for the exchange of one currency for another.The foreign ...
  • Casualty insurance
    Casualty insurance is a field of insurance that covers whatever is not covered by fi re, ...
  • Netting
    Netting refers to the offsetting of sums due between two business entities. If “A” ...
  • Pledging
    Pledging is the backing bank deposits owed to the federal government and local units of ...
  • Sources and uses of funds method
    Sources and uses of funds method refers to approach developed for estimating a bank’s ...