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. Collateral

    Property or other assets that a borrower offers a lender to secure ...
  2. Lien

    The legal right of a creditor to sell the collateral property ...
  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. Assembly Line

    A production process that breaks the manufacture of a good into ...
  6. Market Leader

    A company that has the largest market share in an industry, and ...
Related Articles
  1. Tired Of Banks? Try A Credit Union
    Retirement

    Tired Of Banks? Try A Credit Union

  2. The Evolution Of Banking
    Credit & Loans

    The Evolution Of Banking

  3. Using Economic Capital To Determine ...
    Personal Finance

    Using Economic Capital To Determine ...

  4. How Basel 1 Affected Banks
    Personal Finance

    How Basel 1 Affected Banks

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center