This chapter discusses the merits and demerits of government bailouts of firms facing bankruptcy risk during crises. As in the discussion in Chap. 10 , Ueda points out that a significant proportion of the firms that received government financial support in Japan and other countries in the early 2020s may have been zombie firms. Ueda emphasizes that the financial system is vulnerable due to the inherent functions of banks, and thus the financial institutions require public intervention. However, Ueda argues that there is a limited theoretical basis for bailing out non-financial businesses and that public intervention for them should only be justified in the context of institutional reforms, such as the reform of insolvency legislation and procedures, which would lead to a reduction in bankruptcy costs in general. Ueda also presents an analysis of the importance of banks’ corporate screening function and shows that this function has been declining in Japan in recent years, using indicators that simultaneously capture the existence of zombie firms and the financial constraints faced by healthy firms in real need of funds. In this chapter comment, “The Pros and Cons of Corporate Bailouts as a Crisis Response,” Hirofumi Uchida agrees with the importance of the issues raised by Ueda. Uchida then points out the need to distinguish whether Ueda’s arguments are based solely on theoretical models or are supported by both theory and evidence, and points to keep it in mind when understanding the contents of this chapter.