Do you know what a bear market is? Or how about credit correlation, a short position or operational risk?
Such terms may be run of the mill for those in the financial industry.
But to many of us they are simply incomprehensible jargon, a Bank of England analyst warns.
Jonathan Fullwood says that financial “gobbledygook” risks perpetuating a “great divide” between banks and the public.
“How much of what… the financial industry in general write can actually be read by a broad audience?” he says. “[It] must try harder if claims of accessibility are to be meaningful.”
In a post for Bank Underground, a blog site for Bank of England staff, Mr Fullwood considers a selection of financial reports and some terms and conditions issued to customers by four UK banks.
The member of the Bank’s advanced analytics division also considered recent speeches and public reports from the Bank of England itself.
He then analysed these documents, using metrics such as sentence length and average syllables per word, before rating them based on their school-grade reading level equivalency.
Mr Fullwood says a text aimed at a wide audience should have a “grade eight or nine level”.
However, documents from private banks tended to require a reading level of grade 12 – equivalent to age 16 or 17 – while the Bank of England’s output required a grade 14 level.
In contrast, a tabloid newspaper article required a level of grade nine and political speeches about grade six. In comparison, Jane Austen’s novels require a level of less than grade seven, while the figure for Ernest Hemmingway’s prose is just four.
“Those writing in the financial industry tend to use long words,” Mr Fullwood says.
“They put those long words in long sentences. And those long sentences in long paragraphs.
“The longest sentence we found in our sample of Bank of England documents contained 77 words.”
Mr Fullwood is not the only person agitating for change – the Campaign for Plain English has been advocating clearer writing from financial institutions for many years.
Chrissie Maher, who began the campaign in 1979, says: “It’s disgraceful that banks and insurance companies have such a hold over us through their use of language.
“Often it means the customer is left with little clarity, and all the responsibility. Terms and conditions, credit-card agreements, overdraft letters – they might as well be in a foreign language.”
Citing Andy Haldane – the Bank of England’s chief economist – Mr Fullwood says “effective communication” would play a role in rebuilding trust in the financial sector following recent scandals.
And he argues that “improvements in readability could be made with relatively little effort”.
“Such effort would surely be welcomed … for example banks might publish an annual report for customers, cleansed of the complexity in the main report aimed at professional investors.”