I recall a "Repo 105" post from a couple of years ago that explained the process WRT Lehman Bros. That might have been the source of adding the "haircut" onto the principle rather than subtracting it from the "high power money" the central bank provides back to the client bank in return for what is "repoed".

"It is not necessary to have hope in order to persevere."

In my example x is 5% so I made a mistake of about 0.25%...

Yes, but just moments prior I was talking about 28 % haircuts, and then it's no longer a wholly trivial matter...

- Jake

Friends come and go. Enemies accumulate.