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Definition Of Full Faith And Credit:


nThe requirement under the United States Constitution, Article IV, that a state respect the laws and court decisions of other states.
Other definition of Full Faith And Credit- What Does Full Faith And Credit Mean?A phrase used to describe the unconditional guarantee or commitment by one entity to back the interest and principal of another entity's debt. This full faith and credit commitment is typically employed by a government to help lower the borrowing costs of a smaller, less stable government or a government-sponsored agency. When this occurs, the smaller government or agency takes on thebacker'scredit quality. The Government National Mortgage Association (Ginnie Mae) is one example of a government agency that is backed by the full faith and credit of the U. government. It is generally accepted that the U. government will never default on its loan obligations. The full faith and credit of the U. government essentially confers risk-free statusto securities such asU. Treasuries. Similarly, securities backed by Ginnie Maemortgages have lower yields than other mortgage-backed securities because they are assumed to carry less risk.

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