Are Higher Haircuts Better? A Paradox
Brian Begalle, Adam Copeland, Antoine Martin, Jamie McAndrews, and Susan McLaughlin Repurchase agreement (repo) markets played an important role in the 2007-09 financial crisis in the United States, and much discussion since then has focused on the role of repo haircuts. A repo is essentially a loan collateralized by securities. Typically, the value of the […]
The Odd Behavior of Repo Haircuts during the Financial Crisis
Since the financial crisis began, there’s been substantial debate on the role of haircuts in U.S. repo markets.
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