vaihtorahoituksen

Vaihtorahoitus, known in English as a "haircut" in financial markets, refers to the practice of applying a discount to the value of an asset when it is used as collateral for a loan or as a margin in a transaction. This discount, or haircut, is a percentage reduction from the asset's market value. The purpose of a haircut is to protect the lender or counterparty against potential losses. If the value of the collateralized asset declines, the haircut ensures that the lender still has sufficient security for the loan or transaction.

The size of the haircut typically depends on the perceived risk associated with the asset. More volatile or less liquid assets will generally have larger haircuts than stable and liquid assets. For instance, government bonds might have a very small haircut, while a highly speculative stock could have a substantial one. This mechanism is crucial in various financial contexts, including repo transactions, securities lending, and over-the-counter derivatives trading.

In essence, a haircut acts as a buffer against market fluctuations. It allows financial institutions to manage risk by requiring borrowers or counterparties to provide collateral that is valued at more than the amount of the loan or exposure. This difference covers potential declines in the collateral's market price, thereby mitigating credit risk and ensuring the stability of financial transactions. The specific haircut percentages are often determined by market conventions, regulatory requirements, or the policies of the financial institutions involved.