Credit limit

Roles that need it

• Credit Risk Analyst
• Corporate Credit Analyst
• Relationship Manager (Corporate & Business Banking)
• Loan Officer (Retail & SME Lending)
• Collateral Management Analyst

Skills it belongs to

• Credit analysis and creditworthiness
• Lending products and loan structuring
• Risk judgment and escalation instinct

Related concepts

• Exposure at default (EAD)Exposure at default is the amount a lender expects to be owed when a borrower defaults. For loans with undrawn limits, such as credit cards and revolving facilities, it adds the expected extra drawing through a credit conversion factor (CCF).
• Credit concentration riskConcentration risk is the risk of large losses from exposures to a single counterparty, group, sector, country or collateral type that move together. Banks manage it with limits and the large exposures regime, and assess residual concentration in their capital planning.
• Risk appetite (risk appetite framework)Risk appetite is the level and types of risk a firm is willing to take to meet its strategy, approved by the board. The risk appetite framework turns it into a statement, limits and indicators that are monitored and escalated when breached.
• Early warning indicators (credit)Early warning indicators are signals that a borrower's credit quality is weakening before default, such as overdraft excesses, missed covenants, rating downgrades, falling turnover or negative news. Triggered cases go to a watchlist for closer review and action.

Sources

• Principles for the management of credit risk, BIS (external site) accessed 31 Oct 2026

Updated 31 Oct 2026.