what does bailout mean

A bailout in finance refers to the act of providing financial assistance to a struggling or failing business, institution, or government entity. This assistance can come in the form of loans, grants, or other forms of capital injection to help prevent the entity from going bankrupt or defaulting on its obligations. Bailouts are often initiated by government agencies or central banks in order to prevent systemic financial crises, stabilize the economy, or protect the interests of depositors, investors, and other stakeholders. Bailouts can be controversial, as they can lead to moral hazard and create a perception of unfairness by rewarding failure or mismanagement. However, they are sometimes seen as a necessary intervention to prevent wider economic damage and maintain stability in the financial system.