Bailout Meaning: Definition, Examples, and Translations
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bailout
[ˈbeɪlˌaʊt ]
Definition
financial assistance
A bailout refers to an act of giving financial support to a failing business or economy to save it from collapse. This support is often in the form of loans, grants, or other financial aid. Bailouts are typically provided by governments or other large institutions during times of financial crisis to stabilize the economy and prevent further damage.
Synonyms
Examples of usage
- The government approved a bailout for the struggling airline.
- Many argue that the financial bailout was necessary to prevent a recession.
- The company's bailout plan included strict conditions for future operations.
Translations
To see the translation, please select a language from the options available.
Interesting Facts
Historical Origins
- The term 'bailout' traces back to aviation in the early 20th century, where it referred to jumping from a plane before it crashes.
- Its financial use began in the 1980s during economic crises, signifying government support to save companies from failure.
- Notably, in 2008, the U.S. government provided a massive bailout to financial institutions to prevent a complete economic collapse.
Economic Context
- Bailouts are often controversial, raising debates about moral hazard – the idea that helping someone out might encourage risky behavior.
- Governments usually fund bailouts with taxpayer money, leading to public discussions about responsibility and accountability in corporate practices.
- The automotive industry also saw significant bailouts, particularly during economic downturns, to keep major companies afloat and save jobs.
Pop Culture
- Bailouts are commonly referenced in films and television, often as a plot point showing a character or company in crisis and needing rescue.
- Songs and literature have explored themes of economic struggle and recovery, reflecting society's varying views on financial assistance.
Legal Framework
- Bailouts can involve complex legal agreements that outline the terms under which funds are provided and how they must be repaid.
- In many countries, regulations exist to determine which companies qualify for a bailout and the conditions they must meet to receive government aid.
Psychological Impact
- Receiving a bailout can create a sense of relief for those involved, but it can also result in anxiety about future obligations and responsibilities.
- The way society views bailouts can shape perceptions of success and failure, often affecting the morale of employees and stakeholders.
Origin of 'bailout'
The term 'bailout' originated in the early 20th century, combining the word 'bail', which signifies the act of releasing someone from jail on the assurance that they will appear in court, with 'out', indicating a release or escape. The combination reflects the idea of helping someone out of a difficult situation. The concept gained prominence during financial crises when companies or financial institutions required substantial monetary support to mitigate losses. The use of the term was particularly notable during the late 2000s financial crisis, when governments globally intervened to rescue failing banks and corporations. Over time, 'bailout' has evolved to describe various forms of financial assistance provided to avert bankruptcy and stabilize economic conditions.