Deleveraging (also used in German, but with different meanings)

In general, the reduction of leverage. – The replacement of debt by equity (process undertaken by a company in an attempt to reduce its financial leverage, or the degree to which the company is using borrowed money). – The sudden and large-scale reduction of “leveraged” positions, i.e. positions containing a high proportion of borrowed capital. The sudden and large-scale reduction of leveraged positions at a bank or in the financial market as a whole, as was the case in the wake of the subprime crisis. – See leverage, profit taxation, leverage ratio, prudential filter, deleveraging. – Cf. Deutsche Bundesbank Monthly Report of January 2014, p. 62 et seq. (deleveraging needs in the sense of in the euro area and specifically in the banking sector).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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