bailout

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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 ?
In May, euro zone governments offered Greece debt relief in 2018, when the country's current bailout accord -- its third since 2010 -- lapses.
Bailouts are socially desirable because Congress cannot anticipate the contingencies that would make possible an ex ante insurance system that regulates behavior and charges firms in advance for liquidity support or other transfers.
The referendum was preceded by several rounds of talks, which failed to end in an agreement between the sides before the expiration of the previous bailout program.
If the buyback fails to meet expectations, another round of bailout negotiations and adjustments would probably need to be made to the bailout package, according to QNB Group.
Her education and experience as a school administrator as well as a parent adds authority to her argument and also allows her to point the finger toward the solution to this debilitating bailout.
com entitled "Mitt Romney: The Bailout King of American Politics.
But the ministers' plan for a second bailout takes the same approach as the first rescue, launched in May 2010: it does not include direct steps to cut Greece's debt pile and merely tries to stave off default until Athens can reform its budget and the Greek economy starts growing its way out of trouble.
He tells us that it was the last crackpot Labour Government that signed Britain up to the EU bailout mechanism and he blames Alistair Darling and of course Gordon Brown.
By JAMES LYONS, Deputy Political Editor ANGRY Tories are demanding Parliament be recalled to debate Chancellor George Osborne's pounds 4billion Portuguese bailout.
The House Financial Services Subcommittee has asked the GAO to look into market distortions caused by the bailout.
For example, banks that receive federal bailout money - but not custom-made bailouts such as those given to Citigroup and Bank of America - are exempt from the cap if they publicly disclose executive salaries and subject them to shareholder votes.
Even though banks in Europe would like capital injections in order to end the banking crisis, EU regulators said they had to ensure that the bailouts won't benefit banks that get state aid more than rivals that can cope without the help of a bailout package.