Belt And Suspenders

AAA

DEFINITION of 'Belt And Suspenders'

A term used to mean conservatism and safety in lending practices. Belt and suspenders has been used to describe cautious bankers who demand loan policies be very strictly adhered to.

More generally - as the use of both a belt and suspenders to hold up one's pants implies - it can mean having redundant safety procedures in place to eliminate all risk. The term can be complimentary, but it also can convey ridicule of the overly conservative.

INVESTOPEDIA EXPLAINS 'Belt And Suspenders'

In his book The Right Word in the Right Place at the Right Time (2004), William Safire cited several examples of the use of belt and suspenders. He notes a sentence in the Dallas Morning News from 1987: "To qualify for the Scott Burns Belts and Suspender Bank List, a bank had to have primary equity capital amounting to at least 10% of its assets."

He also mentions a piece from the Wall Street Journal, in which Clinton policymaker Robert Rubin says "We'll be belts and suspenders with respect to those," regarding restrictions about lobbying the White House upon assuming his new banking job.

RELATED TERMS
  1. Lien

    The legal right of a creditor to sell the collateral property ...
  2. Collateral

    Property or other assets that a borrower offers a lender to secure ...
  3. Loan

    The act of giving money, property or other material goods to ...
  4. Unsecured Loan

    A loan that is issued and supported only by the borrower's creditworthiness, ...
  5. Maximum Drawdown (MDD)

    The maximum loss from a peak to a trough of a portfolio, before ...
  6. Gross Exposure

    The absolute level of a fund's investments.
RELATED FAQS
  1. What is the difference between a buy limit and a sell stop order?

    A buy limit order is a specific type of buy order used to enter a market, while a sell-stop order is a sell order that can ... Read Full Answer >>
  2. What does a high equity risk premium signify about a company's stock future?

    A high equity risk premium signifies that a company's stock future is uncertain. Equity risk premium is the excess return ... Read Full Answer >>
  3. When should I use a trailing stop order?

    Trailing stop orders are used to limit losses and protect profits on a stock position. You should use trailing stop orders ... Read Full Answer >>
  4. How many components are listed on the Dow Jones Industrial Average?

    The Dow Jones Industrial Average, or DJIA, is a stock index comprised of 30 different companies traded on the Nasdaq and ... Read Full Answer >>
  5. What percentage of a diversified portfolio should be exposed to the internet sector?

    The percentage of a diversified portfolio that should be exposed to the Internet sector varies based on the investor's risk ... Read Full Answer >>
  6. What is Z-spread and option adjusted credit spread?

    A zero-volatility spread, or Z-spread, uses the zero-coupon rate curve to calculate the spread between assets of different ... Read Full Answer >>
Related Articles
  1. Retirement

    Tired Of Banks? Try A Credit Union

    These nonprofit organizations can provide a range of services for lower fees.
  2. Credit & Loans

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  3. Personal Finance

    Using Economic Capital To Determine Risk

    Discover how banks and financial institutions use economic capital to enhance risk management.
  4. Personal Finance

    How Basel 1 Affected Banks

    This 1988 agreement sought to decrease the potential for bankruptcy among major international banks.
  5. Personal Finance

    How To Calculate Beta Of A Private Company

    We explain two methods for calculating the beta of a private company.
  6. Investing Basics

    How to Calculate Risk Premium

    Think of a risk premium as a form of hazard pay for risky investments.
  7. Economics

    Explaining the Value Chain

    A model of how businesses receive raw materials as input, add value to the raw materials, and sell finished products to customers.
  8. Investing Basics

    Understanding Risk-Return Tradeoff

    The essence of risk-return tradeoff is embodied in the common phrase “no risk, no reward.”
  9. Trading Strategies

    Market Timing Tips & Rules You Should Know

    Market timing rules benefit investments by finding the best prices and times to take exposure and book profits.
  10. Trading Strategies

    Trading Risks And Rewards In Your Favor

    Measure reward and risk targets before taking a trade, and let those numbers guide your open position.

You May Also Like

Hot Definitions
  1. Coupon

    The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually. This is also referred to ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  4. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  5. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
Trading Center