A bail-in provides relief to a financial institution by the institution (i.e. a bank) using the money of its unsecured creditors, including depositors and bondholders, to restructure their capital so it can stay afloat. In effect, the institution is allowed to convert its debt into equity for the purpose of increasing its capital requirements. A bailout, however, involves the rescue of a financial institution by external parties, typically governments, using taxpayers’ money for funding. Bailouts help to prevent creditors from taking on losses while bail-ins mandate creditors to take losses.