As translator, word definition curiosity never ends up, so I had the idea to share with all of you the meaning of this daily repeated word by American news media: BAILOUT.The term BAILOUT means:
A situation in which a business, individual or government offers money to a failing business in order to prevent the consequences that arise from a business's downfall. Bailouts can take the form of loans, bonds, stocks or cash. They may or may not require reimbursement.
Investopedia Says:Bailouts have traditionally occurred in industries or businesses that may be perceived no longer being viable, or are just sustaining huge losses. Typically, these companies employ a large number of people, leading some people to believe that the economy would be unable sustain such a huge jump in unemployment if the business folded. For example, Chrysler, a large U.S. automaker was in need of a bailout in the early 1980s. The U.S. government stepped in and offered roughly $1.2 billion to the failing company. Chrysler was able to pay the entire bailout back, and is currently a profitable firm.
Related Links: Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself. The Essentials Of Cash FlowPressure to be the best can sometimes push corporations to cheat. Learn how they do it and how to spot it. How Some Companies Abuse Cash FlowLearn how governments adjust taxes and government spending to moderate the economy.
FOR THE SPECIFIC THE BANKING RELATED ISSUES, this financial meaning of the BAILOUT is useful for you to know:
Banking Dictionary: Bailout
Financial assistance given to an insured bank or savings institution suffering a loss of earnings resulting from loan losses, deteriorating market conditions, or a sudden outflow of deposits in a depositor Run. When the infusion of funds is from a federal agency such as the Bank Insurance Fund which insures commercial bank deposits, it is the depositors who are bailed out.
Financial assistance given to an insured bank or savings institution suffering a loss of earnings resulting from loan losses, deteriorating market conditions, or a sudden outflow of deposits in a depositor Run. When the infusion of funds is from a federal agency such as the Bank Insurance Fund which insures commercial bank deposits, it is the depositors who are bailed out.
The insurance agency may arrange open bank assistance to a troubled bank, or arrange an acquisition by a healthy financial institution. In either case, the deposit insurance fund gives enough assistance, usually in the form of promissory notes, to cover the difference between the estimated market value of the bank's assets and its liabilities (the bank's negative net worth), thereby recapitalizing the institution.
I HOPE THIS CAN HELP YOU IN YOUR UNDERSTANDING OF THE CURRENT AMERICAN DECLINING ECONOMIC SITUATION.
