haircut
- 01 A2 Elementary
n.the act of cutting your hair or the new style you have after it is cut.
n.the act of shortening or styling the hair, or the resulting hairstyle itself.
Simple“I need to get a haircut before the wedding because my hair is getting too long.”
In context“She was so pleased with her new haircut that she immediately booked another appointment for the following month.”
- 02 C1 Advanced
n.a reduction in the value of an investment or the amount of money a person is paid back.
n.a proportional reduction in the value of an asset or a debt repayment, often during bankruptcy or debt restructuring.
Simple“The investors had to take a twenty percent haircut on their original investment.”
In context“Under the terms of the restructuring agreement, the creditors were forced to accept a significant haircut to prevent the company from total liquidation.”
UsageOften used with the verb 'take'.
Teacher's tipThis is a common metaphor in financial news and legal proceedings regarding debt.
- 03 C2 Proficiency
n.the difference between the market value of an asset and the amount of a loan it secures.
n.the percentage by which the market value of an asset used as collateral is reduced for the purpose of calculating the capital requirement or loan amount.
Simple“The bank applied a ten percent haircut to the stocks used as collateral for the loan.”
In context“Regulators increased the required haircut on sovereign debt to ensure that banks maintained sufficient liquidity during the market volatility.”
UsageUsed as a technical term in risk management and banking.
Teacher's tipThis sense is highly specific to banking and risk assessment professionals.
Synonymsmarginvaluation gap - 04 C1 Advanced
v.to lower the recorded value of an asset or a debt.
v.to apply a reduction to the value of an asset or financial claim.
Simple“The government decided to haircut the bonds to manage the national debt.”
In context“The central bank may choose to haircut certain assets more aggressively if market conditions continue to deteriorate.”
UsageTransitive verb requiring a financial asset as an object.
Teacher's tipThe verb form is less common than the noun but appears frequently in high-level financial reporting.
SynonymsdevaluediscountAntonyms
“How to get the 1.5-inch-long haircut required to look the part.”
“There is friendless Patch, riddled with anxiety, who bursts into tears at the memory of the postman’s suicide and falls victim to a terrible haircut.”
From hair + cut.
Etymology adapted from Wiktionary, available under CC BY-SA 4.0.