View source for Objectivity and impartiality in credit decision-making

== Objectivity and impartiality in credit decision-making ==
Institutions should<ref>EBA, Guidelines on loan origination and monitoring EBA/GL/2020/06</ref> ensure that decisions taken by credit decision-makers are [[Impartiality | impartial]] and objective and not adversely affected by any [[Conflict of Interest]], in line with the EBA Guidelines on internal governance. 

More specifically, institutions should ensure that any individual involved in credit decision-making, such as members of staff and members of the management body, should not take part in credit decisions if any of the following occurs:
* any individual involved in credit decision-making has a personal or professional relationship (outside the professional relationship when representing the institution) with the borrower;
* any individual involved in credit decision-making has an economic or any other interest, including direct or indirect, actual or potential, financial or non-financial, associated with the borrower;
* any individual involved in credit decision-making has undue political influence on or a political relationship with the borrower.


Notwithstanding the governance structures implemented in institutions to operationalise the credit decision-making framework, institutions should have policies, procedures and organisational controls in place that guarantee and ensure objectivity and impartiality in the credit decision-making process. 

These policies, procedures and organisational controls, including any mitigating measures, should be clearly defined and understood, and should address any potential conflicts of interest. 

Institutions should ensure effective oversight of the decisions taken by credit decision-makers, including credit granting, to ensure their objectivity
and impartiality.

== See Also ==
* [[EBA Guidelines on Loan Origination and Monitoring]]

== References ==
<references/>

[[Category:Internal Governance]]