HAIRCUT is the amount of reduction in market value given to securities pledged as collateral, typically in a repurchase agreement or a reverse repurchase agreement. This reduction assures the lender of funds in this type of transaction that, even if the collateral's market value declines, there is time to call for additional collateral to bring the collateral value back up to an acceptable level.
CLOSING ACCOUNT is the determining the balance of an account and posting an entry to offset such balance.
COVENANT is a clause in a contract that requires one party to do, or refrain from doing, certain things. It is usually a restriction on a borrower imposed by a lender.
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