(1) that portion of an asset's value that cannot be used as collateral. For example, if 90 percent of an asset's value can be used as collateral for a loan, the' haircut' is 10 percent. Therefore, to provide full backing, the lender will require collateral that is valued in excess of the amount of the loan. The haircut is meant to protect the lender against a possible decrease in the value of the collateral.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). haircut. Retrieved September 28, 2026, from http://smartdefine.org/haircut/definitions/1155271 |
| Chicago | Barry Goldsmith. 2010. "haircut" http://smartdefine.org/haircut/definitions/1155271 (accessed September 28, 2026). |
| Harvard | Barry Goldsmith 2010, haircut, Smart Define, viewed 28 September, 2026, <http://smartdefine.org/haircut/definitions/1155271>. |
| MLA | Barry Goldsmith. "haircut" 21 October 2010. Web. 28 September 2026. <http://smartdefine.org/haircut/definitions/1155271> |