answersLogoWhite

0

What is the bailout of banks?

Updated: 9/14/2023
User Avatar

Wiki User

15y ago

Best Answer

If you are asking about the Sept 2008 bank bailout, here is the answer.

Bush administration wants to pay more than the price a pool of mortgages is worth on the open market.

This is in esssence a gift to bankers. Think of a mutual fund or stock you have bought and lost money on the investment. The banks and stock brokers made bad investments on sub-prime mortgages, and now want the taxpayers to give them free money to bail them out. If that happens, why doesn't the government give you a check to bail you out over that stock you bought that went down in price?

User Avatar

Wiki User

15y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What is the bailout of banks?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Finance

Who Gave Bailout Money To Banks?

Obama


How does the Americans pay for Bushs bailout?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for


What is the financial bailout package crisis?

There is no such crisis as the financial bailout package crisis. the bailout was created to overcome the financial crisis.


How do you Apply for a bailout?

Individuals aren't getting bailed out, and the money isn't even going to mortgages. Banks are hoarding the money and what they do with it is a secred. See the link on Congressional oversight below.


Who will receive the bailout money?

Nobody would receive the bailout money directly/Freely. The US Federal Reserve plans at buying illiquid securities from the banks & other financial institutions that are in trouble now. They would be buying assets like MBS (Mortgage Backed Securities), CDO's (Collateralized Debt Obligations) etc The proportion in which each banks assets would be bought by this bailout plan would be decided by the plan coordinators. The proceeds of this asset buying by the reserve (Cash) would be used by these banks and financial institutions to meet their liquidity needs and to infuse further liquidity into the economy. The Fed Reserve would sell these assets at a later point of time once the economy stabilizes and repay the Treasury.

Related questions

Who Gave Bailout Money To Banks?

Obama


Can you get a loan from the bailout?

No, the bailout is meant to allow funds for business and banks to operate on credit. You would have to qualify for a loan.


What industry received a bailout from the federal government in the 1980s?

Savings and loan banks


Why did the us government decide to give banks a bailout during this crisis?

i dont no


What is the 700 billion bailout for?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for


What is the Meaning of a bailout word?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for


How and when will taxpayers be affected on the bailout?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for


Why do you need bailout?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for


How does the Americans pay for Bushs bailout?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for


Terms best describes government involvement in the form of financial assistance to crisis-stricken banks and businesses?

Bailout A+


Who is on the government bailout?

Only the big boys are getting bailed out - Banks with ties to the Federal Reserve and the Treasury, Investment banks, etc. See the related question on Congressional oversight.


What are the main objectives of the 700 billion bailout?

1. Bailout is a mechanism to strengthen banks' balance sheet so that their credit rating will not deteriorate thus not requiring to pledge additional asset to creditors. 2. It is also a mechanism to safeguard banks from panic withdrawal from depositors. Bailout comes at a cost (a very huge cost), in dollar term, it was estimated that the whole bailout plan will cost every man, woman and children in the US $2,300. For more information, visit: http://leonardatavism.blogspot.com/2008/09/some-thoughts-for-us-bailout-plan.html for The main objectives for the Bailout Package are: 1. To Stabilize the economy 2. Improve Liquidity 3. Improve Investor Confidence 4. Reduce the impact of the financial crisis on the US Economy and GDP.