I keep reading about 'haircuts' in the eurozone, so looked up what a haircut means in the financial world. This definition, from the online Farlex Financial Dictionary , is a bit too technical for me: "The reduction of value to securities used as collateral in a margin loan. That is, when one places securities as collateral, the brokerage making the loan treats them as being worth less than they actually are, so as to give itself a cushion in case its market price decreases."
Wikipedia's definition is a bit easier to understand: "In finance, a haircut is a percentage that is subtracted from the market value of an asset that is being used as collateral. The size of the haircut reflects the perceived risk associated with holding the asset. However, the lender has a lien for the entirety of the asset". (A lien, according to the OED, is "a right to retain possession of property (whether land, goods, or money) until a debt due in respect of it to the person detaining it is satisfied". The word 'lien', which dates back to the 16th century, comes originally from the Latin ligamen, bond. Interestingly, the OED draws attention to the different US and British pronunciations of the word lien; it tells us that the usual English pronunciation is, in IPA symbols, /ˈliːən/ ie 'lee-en', where the 'en' sounds like the final syllable of 'fasten', whilst the American pronunciation is /liːn/, which sounds more like 'lean'. I've just checked on howjsay.com, which seems to recognise that I am based in the UK, and it confirms the British pronunciation - you might get a different version if you are in North America.)
An article in The Guardian's Pass Notes series simplifies the concept of financial haircuts for non-economists like me; it describes a haircut as "a euphemism for 'disguising the effects of massive fiscal irresponsibility'. 'Taking a haircut' refers to the practice of banks being forced to write down the value of debts they hold, owed by people who can't pay, to avoid the collapse of the entire credit system."