Haircut
From ACT Wiki
1.
Secured lending.
An amount deducted from the current market value of an asset used as collateral, to calculate the maximum amount of a loan secured against that asset.
For example:
if the market value of the asset were £100,000
and the haircut was 2%,
the maximum amount of the related secured loan would be £98,000 (= £100,000 LESS 2%).
2.
The amount of a loss (or an expected loss) on asset, as a percentage of the total value of the asset.
For example in this context:
a 50% haircut on Greek debt of EUR 200bn
means a loss of EUR 100bn (= 50%)
and a recovery of EUR 100bn.
3.
A fee or commission, expressed as a percentage of the total value of the related transaction.
