[8] In 2012, world media was reporting on the "biggest debt-restructuring deal in history",[9]: 1 which included the "very large haircut" of some "70 percent of par value" of Greek state bonds, in NPV terms.
[9]: 27 The financial term "haircut" began, and continues to be used, as a reference to valuation discounts applied under the U.S. Securities and Exchange Commission's net capital rule.
The purpose of these deductions from "net worth," is to provide a margin of safety against losses incurred by a broker or dealer as a result of market fluctuations in the prices of such securities or future commodity contracts.
[citation needed] When used in the context of exchange traded products such as stocks, options, or futures, haircut is used interchangeably with the term margin.
[12] The haircut agreed to by Greek-state debt holders was deemed "voluntary" by the banks' chief negotiator Charles Dallara, although, in order to convince domestic bond holders, the Greek government "made it clear that holdouts would not receive a sweeter deal", while it also declared that if the haircut was not completed, the Greek state would not be able to "further service its debt".