StudentShare solutions

Essay example - U.S. Government Bailouts

Only on StudentShare
U.S. Government Bailouts  Essay example
Finance & Accounting
Pages 7 (1757 words)
Government bailout is a maritime colloquial used in the financial sectors in reference to the process in which the government provides financial assistance to leading corporations thereby preventing them from falling or facing an imminent collapse…

Extract of sample

The transport industry, for example, is the American economic backbone. The industry sustains trade and the travel of people throughout the fifty-two states. The country therefore requires an efficient and elaborate transport industry that does not face any serious financial challenges, which may weaken its operations (Muolo 41). To ensure this, the government provides tax reliefs and financial incentives to bigger corporations in the transport industry, which include oil companies, airlines among other stakeholders in the industry. The bailout is a maritime term inferring to the process of removing water from a sinking ship using smaller buckets.
The term is used in the financial sectors therefor to refer to the nature in which the government gives financial aid to its major corporations during difficult financial times. Bailouts are often formulated and implemented through acts of parliament; the lawmakers discuss the economic situation and therefore determines the appropriate amount of money capable of ensuring that a corporation stays operational despite the financial challenges at the time. The government gives out the money in a form of a loan, which the company pays later after it stabilizes its operations. Additionally, the government gives out the bailouts in the form of grants or through the purchase of shares of a poorly performing corporation. ...
Download paper
Not exactly what you need?

Related papers

Do Modern Finance And Government Intervention Crash The Financial System?
This crisis resulted in severe issues including threat of total failure of large financial institutions, evictions, foreclosures, stock market downturns, housing market meltdowns, job terminations, and prolonged unemployment. Evidently, the 2008 global financial crisis significantly reduced the growth rate of countries worldwide and many western economies including US suffered huge net losses. A…
12 pages (3012 words)
Finance: Fair value accounting during the financial crisis
22 pages (5522 words)
The Financial Crisis
6 pages (1506 words)
Identifies a contemporary issue associated with employment and/or leadership in accounting and finance. The issue must be linked
There were key findings from the real estate boom in UK and USA which showed how the government responded in the worse situations. The key conclusions stated that the government has many intervening roles where the features of privatizations cannot help. These were related with the leadership roles. Recommendations suggested can be that the government has certain fallacies in dealing with matters…
15 pages (3765 words)
UK Government Policies
The reasons for the banking crisis were many including low real interest rates, too much liquidity and a misjudged faith in the financial system. These three factors created an entourage that was extremely optimistic and full of opposite opinions. By not understanding the sensitive situation, some banks have only themselves to blame (Singh, 2007). The tradition within the banking sector in the UK…
6 pages (1506 words)
Principles of Banking and Finance
The attractive mortgage lending was based on a faulty premise that the house prices would continue rising, thus over-lending by the banks, in total disregard of the likelihood of repayment. When the false bubble in the mortgage lending finally burst, the financial crisis began taking its toll, many loans were unrecovered by the banks and the banks become bankrupt. The third force behind the credit…
8 pages (2008 words)
The effect of the U.S. Subprime Crisis to the China commercial banks in 2008-2013
A careful analysis of the sub-prime crisis reveals that it was created from the slump in housing prices that created a ‘bubble’ of expectations among investors. By the end of third quarter of 2007, the prices of underlying assets declined drastically and the value of mortgage based securities was higher than asset. This motivated investors to default on mortgages as they felt that actual worth…
42 pages (10542 words)