An index of haircuts on lower-quality collateral used in the biparty repo market surged from the elevated level of 25 percent it had reached over the summer of 2008 to 45 percent.28 This had the effect of doubling the amount of money an investment bank would have to mobilize to hold anything other than top-quality securities on its books. Even at Goldman Sachs, the strongest of the stand-alone investment banks, its vital liquidity reserve, which it had pumped from $60 billion in 2007 to $113 billion by the third quarter of 2008, plunged on September 18 to a nominal total of $66 billion.
