Words-worth: Haircut

Ever wondered where the word 'haircut' comes from?

Last Updated: 09 Oct 2013
What price a Greek haircut?' asked Robert Peston's blog. The excitable BBC seer was not referring to the cost of a short back and sides in Athens. A 'haircut' for the eurozone's debt-stretched nations means reducing the value of their respective borrowings. It's an admission that Greece - and other nations - can't pay back what they owe. More generally, a 'haircut' is a reduction in valuation, especially to partially forgive a debt. If you are owed £100, and you are offered £80, you're taking a 20% haircut. The idiom is from Wall Street. An early example came in the New York Times in 1970, in an article about brokerages valuing securities at less than their market price. It started being used here early this century. In a 2005 article in the Guardian, Salil Tripathi noted: 'When individuals or businesses go bankrupt, banks are forced to take what bankers euphemistically call "a haircut".' The same, of course, goes for nations. And will Greece's 'haircut' save the day? It looks like being a close shave.

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