The Credit Crunch Monster has been released into an unsuspecting world, a Frankenstein creation of the dreaded financial engineering. There has been much talk of leveraging... and now we hear of the even more horrific de-leveraging. What damage is this doing to the cause of clear communication?

---

A certain linguistic affliction has been rife in the financial and business communities for some years. What is particularly distressing is the spread of this plague into everyday language. The use of inappropriate jargon has long been a barrier to effective communication but the use of the noun leverage as a verb is a grotesque example of the genre.

Nouns as Verbs

Of course, there is often nothing wrong with using a noun as a verb. It is one of the beauties of the English language that makes for simplicity in situations where some other languages get tangled up in complex grammatical forms. The word cover, for example, can be a noun or a verb. We can speak about the cover of a book, or we can talk about covering a book. It's also possible to create an abstract noun by adding the suffix -age. Thus we can speak about news coverage. But we do not speak about coveraging. We say that a reporter covered a news story, not coveraged.

The same is true of breakage, drainage, postage, storage, wastage and many others... including leverage. If a verb is required, there is a perfectly good one available, which is lever (levering, levered, and so on). A real communicator, even in the financial community, does use this simple form. A real communicator is someone whose main concern is to inform, persuade or instruct, as opposed to someone who merely wishes to impress the ignorant.

What does it mean?

A lever is a tool that allows us to exert a force greater than we could exert without the aid of the tool. Leverage enables us to do something that we would otherwise be unable to do. The financial community applies the term to investments that are financed with borrowed money. By having more money to invest, the possibilites are greater for higher returns. But the risk is also higher. A common example of a levered investment is a property purchase assisted by a mortgage. As long as property prices rise, the borrowed money is safe and there is the potential for a large capital gain. But if the value of the house falls below the amount of the loan, the Negative Equity Monster rears its ugly head.

So far, so good. Leverage is a piece of financial jargon. Nothing really wrong with that. It's understandable that people prefer the important-sounding leverage over the plain-speaking, four-letter debt. There are some difficulties with pronunciation of the word lever. In America it rhymes with never but in Britain it rhymes with fever. But that's not the problem. Far worse is the clumsy usage of leverage as a verb.

Even that wouldn't be so bad if people usaging leveraging were clear what it meant. But, once the Human Leveraging Virus escaped from its financial incubator, it mutated uncontrollably. In the business world, leveraging can mean almost anything the abuser wants it to mean. Some of the clearer interpretations are taking advantage of, making the most of, or simply using. But often the intended meaning is really not clear. And now it's leakaging out into the wider world! Next time you hear someone usaging the word leveraging, ask them exactly what they mean. You may be surprised at the answer.