BROWSE

Haircut

What is a 'Haircut'

A haircut is the difference between prices at which a market maker can buy and sell a security. The term comes from the fact that market makers can trade at such a thin spread.

Explaining 'Haircut'

In the financial world, a haircut refers to a negative spread between either the buying and selling prices of a security or the lower-than-market value placed on a security that is being used as collateral. The haircut is expressed as a percentage of the markdown between the two values. When they are used as collateral, securities are generally devalued, since a cushion is required by the lending parties in case the market value falls.


Further Reading


A structural analysis of credit risk with risky collateral: a methodology for haircut determination
onlinelibrary.wiley.com [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …

The Devil's Haircut: Investor–State Disputes over Debt RestructuringThe Devil's Haircut: Investor–State Disputes over Debt Restructuring
journals.sagepub.com [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …

Time for a haircut: political regimes and sovereign debt restructuringsTime for a haircut: political regimes and sovereign debt restructurings
www.tandfonline.com [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …

Holding out for a haircut: financial crisis, moral hazard, and interest rate policyHolding out for a haircut: financial crisis, moral hazard, and interest rate policy
onlinelibrary.wiley.com [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …

Sovereign crises and bank financing: Evidence from the European repo marketSovereign crises and bank financing: Evidence from the European repo market
ideas.repec.org [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …

How much for a haircut? Illiquidity, secondary markets, and the value of private equityHow much for a haircut? Illiquidity, secondary markets, and the value of private equity
papers.ssrn.com [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …

Haircut size, haircut type and the probability of serial sovereign debt restructuringsHaircut size, haircut type and the probability of serial sovereign debt restructurings
papers.ssrn.com [PDF]
Page 1. Haircut Dynamics … features of repo market data, including the dramatic change in financing terms for structured products during the credit crisis of 2007-2008. September 2012 *Jurek: Bendheim Center for Finance, Princeton University and NBER; [email protected] …