excessive leverage
[ɪkˈsɛsɪv ˈlɛvərɪdʒ]
noun
alavancagem excessiva
1. The use of borrowed money or debt beyond prudent limits to finance investments or operations, amplifying both potential gains and losses
The company's excessive leverage made it vulnerable to economic downturns and unable to service its debt obligations.
A alavancagem excessiva da empresa a tornou vulnerável às recessões econômicas e incapaz de cumprir suas obrigações de dívida.
2. In finance, using financial instruments or borrowed capital in quantities that create disproportionate risk relative to equity capital
The 2008 financial crisis was largely attributed to excessive leverage in the banking sector.
A crise financeira de 2008 foi amplamente atribuída à alavancagem excessiva no setor bancário.
3. Overextension of debt relative to assets or income, creating vulnerability to market fluctuations
Investors warned that the startup's excessive leverage posed a significant risk to stakeholders.
Investidores alertaram que a alavancagem excessiva da startup representava um risco significativo para as partes interessadas.
This term became particularly prominent in global financial discourse after the 2008 financial crisis. In Brazil, regulatory bodies like the Central Bank (Banco Central do Brasil) monitor leverage ratios closely to prevent systemic risk. In the USA, terms like 'leverage' are deeply embedded in Wall Street culture and are central to financial regulation discussions, particularly following the Dodd-Frank Act.
NYC Slang
overleveraging / being 'over-extended on borrowed money'
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