Pledge (money) by law to a specific purpose.
- The Inter-State Commission was equivocal about hypothecation, but recognised hypothecated payments as contributions toward the cost of road use.
- Many French taxes and national insurance charges are hypothecated to particular layers of government, or spending funds.
- When a customer hypothecates goods to his bank, he purports to create a security, which constitutes neither a legal mortgage nor a pledge.
- Example sentences
- The reason for this is that hypothecation reduces financial accountability in the absence of competitive market disciplines.
- If hypothecation is extended and the Treasury manages a series of accounts tying revenue to specific spending, they will lose some of this clout.
- Central agencies opposed hypothecation in the absence of financial market disciplines.
Early 17th century: from medieval Latin hypothecat- 'given as a pledge', from the verb hypothecare, based on Greek hupothēkē.
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