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Bail-out

A bail-out happens when a government buys an equity stake in a bank or some other form of financial support to prevent it from failing. Critics of bail-outs argue that it can increase the burden facing taxpayers and also increase the risk of moral hazard. Supporters of bail-outs claim that they are sometimes necessary during a financial crisis to help reduce systemic risk. Bail outs have become prominent once again because of the economic and social consequences of the coronavirus crisis.

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