A Note On The Bailout Crisis

1735 Words Mar 22nd, 2015 7 Pages
The concept of a bailout is a loaded topic by itself, and its definition certainly does not give it any help. The words “failing,” “save,” and “collapse” are usually not associated with a light-hearted idea. When a company or a country’s economy is on the verge of collapse, chaos is not far behind. Job loss, bank’s individual trust, the stock market, and even each household’s net. worth is at stake, all of which leads to economic decline. During this time of panic, banks (commercial or central depending on the scale) must make a decision on whether or not they should save/bailout the company or economy. In many instances, especially when a country’s economy is about to collapse, other central banks are usually not seen to shy away from lending to the failing country, such as with the recent occurrence with Greece and its lenders. What these banks at often fail to realize, is that not everything is worth saving. Central banks are constantly seen to be throw money into already sunken ships because of their far of what could come once the failing economy is gone. Even though it hard to see positives in letting an economy completely crash, one must first think about whether or not it is worth the hundreds of billions of dollars to help a country survive a year or two more and hope that it gets back on its feet, while taking the risk of lending the country all that money, and very easily not ever getting to see it again since the country might already be past the point…
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