Other forms: haircuts
A haircut is the cutting of somebody's hair, or the style it leaves. Get a haircut, a bad haircut, need a haircut.
In finance the word means something quite different: a haircut is the reduction applied to the value of an asset or a debt, and creditors taking a haircut in a restructuring is standard language. Hair grows about a centimetre a month, so a bad one is temporary.
1nounhaircutThe cutting of hair, or the style it leaves.
“You need a haircut; your fringe is covering your eyes.”
2nounreductionA reduction in the value of an asset or debt.
“Investors had to accept a haircut on the value of their bonds.”
haircut is a cutting, or a reduction.
Hair plus cut. The financial sense came later, from the idea of trimming a value down.
From hair + cut.
Etymology from Wiktionary, CC BY-SA