What is a bail-out?
In: Economics
There is no specific definition of bailout but, in general, it means government financial intervention to provide short term support an industry, company or a sector of the economy.
The financial intervention can be in the form of loans, loan guarantees, investments, purchase of troubled assets, tariffs on competing imports, subsidies, import restrictions and tax relief. Or a combination of those actions.
Bail outs are generally seen as fairly short term, targeted actions to help in times of crisis. They are usually taken if a large proportion of sensitive industries or services that are deemed important for the broader economy are at risk of failure or closure. The failure of such areas may have significant downstream effects that a bailout is deemed appropriate to forestall them.
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