Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
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."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed May 11th, 2011 at 09:38:32 AM EST
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