Bailouts & Bankruptcy--

It’s apocalyptic that most of the big financial firms and major Banks all across the globe are running out for their profits .They are trying hard to trim their lending and recover debts and many others are on the verge of collapsing. But many of us get perplexed at the very sight of bailout and bankruptcy. What exactly does it mean? Don't they lead to the same fate?

Bailout is an act of loaning or giving capital to a failing business in order to save it from bankruptcy, insolvency, or total liquidation and ruin. A bailout could be done for mere profit, for social improvement, or the bailout of a company might be seen as a necessity in order to prevent greater, socioeconomic failures.

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed or initiate a restructuring.

Its high time, to find out what has brought the current situation, whether there is excessive lending without considering the credit worthiness of the consumer or a corporate company or any malpractices which have led to this kind of collapse. A pattern has to emerge on the basis of this collapse and this can be taken up for discussion and debated as to what remedy and fail proof policies and laws can be introduced to prevent another BAILOUT.

Lehmann Brother is a fine example of a bankruptcy which has rattled the financial world and some more are coming but its unpredictable as to what extent and what is going to be the aftermath. Introducing parameters for predicting a collapse or a clear analytics on the financial losses made by Banks and financial institutions is the need for the hour and this theory should have been completed by now.