Ethics in Lending

Abstract

Ethics is the study of right and wrong. It is concerned with the decisions people make and whether or not these constitute ‘good’ or ‘bad’ behaviour. This chapter begins with a brief discussion as to why ethics is relevant to the operation of commercially-oriented financial institutions and briefly introduces ethics as a field of study. The discussion then turns to consider some of the ethical questions that have been raised about the nature of commercial lending. The objective is not to give specific guidance as to what does or does not constitute ethical behaviour, but to discuss some of the issues that should be considered when evaluating the ethical credentials of credit-debt relationships.