BROWSE

Bailout Bond

What is 'Bailout Bond'

A debt security issued by the Resolution Funding Corporation to bail out the savings and loan associations during the financial crisis of the late 1980s and early 1990s. The bailout bonds had zero-coupon Treasury bonds backing the principal amounts, making the instruments a safe investment.

Explaining 'Bailout Bond'

In the mid 1990s, after the savings and loan associations recovered from its crisis, bailout bonds were no longer issued. Because the bonds were backed by Treasury securities, the yields were only marginally better than those of similar T-bonds.


Further Reading


Sovereign bond market reactions to fiscal rules and no-bailout clauses–the Swiss experience
papers.ssrn.com [PDF]
… time, international investors held over $20 trillion in sovereign and private bonds, with net … Furthermore, gov- ernment bailouts of failed banks can result in dramatic reductions in social … in the direction and mag- nitude of international bank lending and bond financing now fre …

European sovereign bailouts, political risk and the economic consequences of Mrs. MerkelEuropean sovereign bailouts, political risk and the economic consequences of Mrs. Merkel
www.worldscientific.com [PDF]
… time, international investors held over $20 trillion in sovereign and private bonds, with net … Furthermore, gov- ernment bailouts of failed banks can result in dramatic reductions in social … in the direction and mag- nitude of international bank lending and bond financing now fre …

A pyrrhic victory? Bank bailouts and sovereign credit riskA pyrrhic victory? Bank bailouts and sovereign credit risk
onlinelibrary.wiley.com [PDF]
… time, international investors held over $20 trillion in sovereign and private bonds, with net … Furthermore, gov- ernment bailouts of failed banks can result in dramatic reductions in social … in the direction and mag- nitude of international bank lending and bond financing now fre …

Sovereign bond market reactions to no-bailout clauses and fiscal rules–The Swiss experienceSovereign bond market reactions to no-bailout clauses and fiscal rules–The Swiss experience
www.sciencedirect.com [PDF]
… time, international investors held over $20 trillion in sovereign and private bonds, with net … Furthermore, gov- ernment bailouts of failed banks can result in dramatic reductions in social … in the direction and mag- nitude of international bank lending and bond financing now fre …

Moral hazard and bail-out in fiscal federations: evidence for the German LänderMoral hazard and bail-out in fiscal federations: evidence for the German Länder
papers.ssrn.com [PDF]
… time, international investors held over $20 trillion in sovereign and private bonds, with net … Furthermore, gov- ernment bailouts of failed banks can result in dramatic reductions in social … in the direction and mag- nitude of international bank lending and bond financing now fre …

Balance sheet effects, bailout guarantees and financial crisesBalance sheet effects, bailout guarantees and financial crises
academic.oup.com [PDF]
… time, international investors held over $20 trillion in sovereign and private bonds, with net … Furthermore, gov- ernment bailouts of failed banks can result in dramatic reductions in social … in the direction and mag- nitude of international bank lending and bond financing now fre …



Q&A About Bailout Bond


When were bailout bonds no longer issued?

Bailout bonds were no longer issued in 199s after the savings and loan associations recovered from its crisis.

What are some characteristics of a bailout bond?

The bonds had zero-coupon Treasury bonds backing its principal amounts, making them safe investments.

What is a bailout bond?

A bailout bond was issued by the Resolution Funding Corporation to bail out the savings and loan associations during the financial crisis of 198s and 199s.