full faith and credit
Noun: * A guarantee to pay interest and principal on debt; usually issued by the United States Treasury: This is a specific financial and legal term referring to the unconditional pledge and backing of a government, most notably the U.S. government, for its debt obligations. It signifies the highest level of security, implying that the government commits its full taxing and borrowing power to ensure repayment.
The term "full faith and credit" is used almost exclusively in formal financial, legal, and governmental contexts to describe the backing of sovereign debt. * It is a non-count noun and is typically used with the definite article "the" (e.g., backed by the full faith and credit). * It functions as the object of a preposition (e.g., of, by) in a phrase that modifies a noun like "bond," "security," or "obligation."
- U.S. Treasury bonds are considered the safest investment because they are backed by the full faith and credit of the United States government.
- The state issued general obligation bonds, which carry the full faith and credit pledge of the state.
- Investors seek the security that comes with the full faith and credit guarantee.
- In a constitutional context in the United States, the Full Faith and Credit Clause (Article IV, Section 1) requires states to recognize the public acts, records, and judicial proceedings of every other state. This is a related but distinct legal concept concerning inter-state relations, not financial guarantees.
- Example: The Full Faith and Credit Clause ensures a marriage license issued in one state is valid in all others.
- Full-faith-and-credit debt (noun phrase): Debt that carries this specific guarantee.
- General obligation bond (noun phrase): A type of municipal bond backed by the full faith and credit of the issuing municipality, supported by its taxing power.
- Moral obligation bond (noun phrase): A bond that lacks the explicit, legally binding full faith and credit pledge but carries a non-binding promise of support.
- Sovereign guarantee (noun phrase): A guarantee by a national government.
- Unconditional guarantee (noun phrase): A guarantee without any conditions or limitations.
- Unsecured debt (noun phrase): Debt not backed by any specific collateral or guarantee.
- Subordinated debt (noun phrase): Debt that ranks below other debts in claims on assets or earnings.
- Moral obligation (noun phrase): A non-binding pledge, as opposed to a legally binding full faith and credit pledge.
- a guarantee to pay interest and principal on debt; usually issued by the United States Treasury