bailout


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Related to bailout: austerity

Bailout

A capital infusion offered to a business with a national or multi-national footprint that is in danger of bankruptcy, insolvency, or total liquidation.  Financial aid can be provided in the form of debt or equity offerings, cash contributions, or some form of loan or line of credit, and is often accompanied by greater government oversight and regulation.  The failure of a business that employs thousands or plays an influential role in the economy potentially can send shock waves throughout the entire economy, including other industries. The credit crisis that began in 2007 created numerous failures around the world, which resulted in a large number of government-sponsored bailouts in almost every industry across the globe. See: Conservator, Conservatorship.

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.

bailout

The financial rescue of a faltering business or other organization. Government guarantees for loans made to Chrysler Corporation constituted a bailout.
References in periodicals archive ?
Analysts attributed the outperformance to the implementation of bailout measures and increased efforts to improve the state's revenue collection capacity.
The Fed--the major bailout agency--is governed by a statute that limits who it can bail out, and the terms of bailouts.
Germany has been the largest single contributor to Greece's bailouts but it has taken a hard line, insisting on stringent spending cuts and tax hikes in return.
On Sunday, more than 61 percent of Greeks voted against a new bailout plan proposed by the lenders that envisaged unpopular austerity measures such as pension cuts and tax increases in exchange for another loan.
McKinley finds fault with the concept of bailouts and especially questions their need in 2008.
According to PSM spokesman Shazim Akhtar, PSM had to enhance production up to 60 precent in first phase by the end of August 2013, while Rs11 billion bailout package will be given through single trench in a shape of soft loan being provided by National Bank of Pakistan under the federal government guarantee.
Summary: Cypriot MPs have approved key bills aiming to secure a broader bailout package
The ECB will stop giving funds to Cypriot banks if a new bailout plan is not negotiated until Friday, March 22, according to Austria's Minister of Finance Maria Fekter.
The frontrunner in the election runoff for a new president this weekend said on Thursday he has been in touch with governments and unspecified funds for a bridge loan to ensure the island nation does not run out of cash before it secures an international bailout.
Speaking in front of the National Assembly's Health and Social Care Committee, she said: "It is absolutely not a bailout at all.
Despite a recent agreement by the Euro group and the IMF on releasing further assistance for Greece under its bailout programme, the outlook for Euro zone economies remains weak and the region's sovereign debt crisis is likely to stay with us for a number of years, according to QNB Group.
Luxembourg, June 22 (Xinhua-ANI): Head of Eurogoup Jean-Claude Juncker said late Thursday that he expected the terms of the second bailout program for Greece to be "updated" after a mission of international lenders finish its evaluation report.