Credit Culture

From Open Risk Manual


Credit Culture denotes the sum of credit values, beliefs, and behaviours of a lending institution. It is what is done and how it is accomplished. The credit culture exerts a strong influence on a bank’s lending and credit risk management. Values and behaviors that are rewarded become the standards and will take precedence over written policies and procedures.[1]

Credit Culture and Risk Appetite

Credit culture varies from bank to bank and is linked to its implicit or explicit Risk Appetite

  • Some banks approach credit very conservatively, lending only to financially strong, well-established borrowers
  • Growth-oriented banks may approach lending more aggressively, lending to borrowers who pose a higher Credit Risk


  1. Loan Portfolio Management Comptroller’s Handbook, April 1998 (Updated June 26, 2017, for Non-accrual Status)

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