Glossary

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R

RATE (INTEREST RATE)

In economics, the interest rate is the percentage of interest charged on a loan and the amount that the lender receives for making the loan, i.e. it is the cost of taking out a loan.

REGISTERS Register of Banks and Banking Groups

The register of banks contains the list of Italian banks and branches of EU and non-EU banks authorized to operate in Italy. Entry in the register also indicates that the bank is subject to supervisory regulation and control. The register of banking groups sets out the list of such groups and the banks that comprise them. As well, inclusion indicates that the individual banks belong to a banking group and therefore that they are subject to the relative supervisory regulations. The register of banks and banking groups can be found on the Bank of Italy’s website

REMITTANCE

Money transfer by a foreign worker to their family in the country of origin.

RENEGOTIATION (LOAN OR MORTAGAGE)

An agreement in which the borrower and the lender agree to amend one or more components of the contract, for example, the duration of the mortgage, the indexation system, the parameters, the spread or the fees.

REPORT (of the Banking and Financial Ombudsman)

The Bank of Italy prepares and publishes the Annual Report on the activity of the Banking and Financial Ombudsman according to the provisions on the functioning of the alternative dispute resolution (ADR) system.

The Banking and Financial Ombudsman Annual Report:

  • covers the work carried out by the Panels and the performance of the whole out-of-court system
  • provides statistical information on the complaints submitted, their outcomes and the intermediaries concerned.

It is available on the Banking and Financial Ombudsman’s website.

REPORTING

The reporting threshold is the minimum limit of the amount to be reported to the Central Credit Register (CR). For loans not classified as bad, intermediaries must report them to the CR when the customer owes a total amount of at least €30,000. The same applies to guarantees. Bad loans must be reported if the amount exceeds €250.

On a monthly basis, intermediaries submit data on loans and guarantees that exceed the reporting threshold to the CR according to a scheme established by the Bank of Italy. The data concerns the reporting category to which the loan or guarantee belongs, its duration and the type of financing (mortgage, lease, current-account credit facility, etc.).

For CR data collection purposes, the reporting categories group together loans and guarantees sharing common characteristics. For example, the 'maturity risk' category includes financing agreements with a contractually established maturity, like mortgage loans or leasing contracts. Instead, the 'revocation risk' category includes current-account credit facilities.

REPORTING THRESHOLD

Minimum limit of the amount to be reported in the Central Credit Register (CR). For loans not classified as bad, intermediaries must report them to the CR when the customer owes a total amount of at least €30,000. The same applies to guarantees. Bad loans must be reported if the amount exceeds €250.

RESERVES

The Bank of Italy manages the official reserves of Italy and a part of those belonging to the European Central Bank. The official reserves help to maintain the credibility of the European System of Central Banks (ESCB) and may be used in transactions on the foreign exchange market; Italy's official reserves are used to meet the country's obligations to international lending organizations.

REVOLVING

Revolving credit cards are a type of consumer loan. Indeed, the cardholder is given an actual loan that he or she may use to make purchases directly with vendors or to withdraw cash up to certain limit ('ceiling'). The loan is repaid in instalments that consist of principal and interest. With the payment of each instalment, the principal that is repaid is returned to the total credit amount available to make new purchases. The interest rate charged may be much higher than the rates applied to other forms of consumer credit.

RISK

The possibility of losing money with an investment. It is typically measured as the variability (volatility) of the past performance of a financial instrument or an asset. There are no risk-free financial instruments, although some are safer than others, such as savings deposits, insured up to €100,000 per person per bank, and government securities (BOTs, BTPs and CCTs with a remaining maturity of less than 12 months).

RISK AVERSION

In finance, it refers to a preference for less risky investments (with relatively stable or low-volatility returns) compared with riskier investments (with highly variable returns, both positive and negative). Someone who is very risk-averse will prefer less risky investments, such as short-term government bonds, over riskier investments with higher expected returns, such as stocks. Risk aversion depends on both subjective factors, such as the investor's personal preferences or expectations about their future, and objective conditions that can change over time, such as personal wealth, the success of previous investment transactions, and economic uncertainty.

RISK SEEKING

In the strict sense, risk seeking refers to the behaviour of a gambler who, when faced with two bets offering the same expected returns, chooses the one with greater variability of outcomes, aiming to achieve returns higher than those expected. In the case of a coin-toss game where the maximum win is 100 and the minimum is 0, a risk-prone gambler always prefers to play to try and win 100 while risking losing everything instead of securing a certain 50 (the expected value of the bet). See also RISK AVERSION.