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Reverse Repo

A contract (short-term borrowing) which is made between a buyer and seller for the temporary purchase of securities, such as...

Regulatory Capture

A situation that arises when regulatory policies and action often favor the industry being regulated at the expense of the...

Risk-Free Rate

The interest rate that would exist on a riskless investment/ security, given that expected inflation is zero. Such a rate...

Rehypothecation

A practice whereby a broker pledges the same collateral, initially posted by a client, to a bank to collateralize a...

Run Problem

The problem (bank run) that a bank encounters when all or majority of clients rush to claim back their deposits....

Roly-Poly CD

Colloquial for rollover CD; a short-term certificate of deposit (CD), usually with a 6-month maturity, where the issuer reissues or...

Repo Rate

The annualized short-term interest rate at which the central bank lends money to commercial banks. In effect, repo rate represents...

Respondent Bank

A bank (the principal) which has an account with another bank (the agent, or the correspondent bank) that allows it to make payments...

Regulatory Forbearance

A regulatory policy (i.e., a policy implemented by central banks and other regulatory authorities) that permits banks and financial institutions to continue operating even...

Risk Transformation

A type of transformation that is performed by banks and other depositary institutions whereby the risks associated with deposits and loans...