bail out

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Bail Out

To give money to a company so that it avoids bankruptcy and is able to continue operations. Generally speaking, the term often refers to a government bailing out a private corporation. A bailout may take the form of a direct transfer of capital, or it may occur indirectly through low or no interest loans and subsidies. For example, in September of 2008 the insurance conglomerate AIG found itself in dire straits. The Federal Reserve bailed it out by extending $85 billion (and eventually $182 billion) in credit to the company. Proponents of bailouts say that they keep an economy afloat when an industry thought too big to fail otherwise would collapse. Critics contend that bailouts are inefficient and that non-competitive companies ought to fail. See also: Cash for clunkers.

bail out

To sell a security, generally at a loss, in anticipation of a further price decline.
References in periodicals archive ?
PRIME Minister David Cameron yesterday vowed to remain "eternally vigilant in all matters European" after heading off a big British bill for a second EU bail-out for Greece.
Under his honest assessment an incoming David Cameron administration would cut spending on roads, rail, benefits, defence, business bail-outs, job creation programmes and other services.
State bail-outs of the financial and automotive industries are driving demands for such spending to be made transparent, which should lead more governments to adopt international public-sector accounting standards (Ipsas), he said.
BUSINESS NEWS 4-9 Bail-outs plea The chief of a toxic asset-free bank has called on the Government to let failing lenders go to the wall rather than spending billions of pounds on bail-outs.
As a result, the summit in Sunday focused more on how to kick start European credit and financial markets and merely referred briefly to the auto industry in the summit communique, saying it favoured the 'enhanced European coordination of schemes for the renewal of car fleets.' However it called on the Commission to closely monitor other bail-outs. Decisions on the legality of proposals made by Italy and Spain are still awaited from Brussels.
The Prime Minister's appearance before the Commons Liaison Committee was the first since the taxpayer-funded bank bail-outs, VAT cut and other measures were introduced last year in a bid to counter the downturn.
The transaction also marks a significant step in Credit Lyonnais's retreat from international retail banking, as ordered by the European Commission in return for a series of state-aided bail-outs in the mid-1990s for the recently privatised bank.
Figures from the Office for National Statistics (ONS) showed that borrowing - excluding the distorting effect of bank bail-outs - was PS9.3bn, compared with PS6.5bn a year ago.
Borrowing costs in Spain, which is holding a general election this weekend, were its highest since 1997 and the same level that left Ireland and Portugal in need of bail-outs.
Germany and France are pressing for the use of the European Financial Stability Mechanism to spread the cost of any future bail-outs.
Greece and the Irish Republic have needed bail-outs, and Portugal is also now asking for help.
A bank levy has been proposed as a way of making banks pay for future bail-outs of financial institutions.