Includes “Bailout is a general term for extending financial support to a company or a country facing a potential bankruptcy threat. … Bailouts also have their disadvantages. Anticipated bailouts encourage a moral hazard by allowing not only promoters but also other stakeholders (customers, lenders, suppliers) to take higher-than-recommended risks in financial transactions. This happens because they start counting on a bailout when things go wrong.”
Read the full article on: The Economic Times (India)