Skip to content
GLOSSARYTERMS AS A CREDIT DESK USES THEM

Conflict of interest

What counts as a conflict of interest for a banker, and what does disclosure do?

ONE OF 80 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A conflict of interest arises when a banker's own interest, or a duty owed to one party, could influence a decision owed to another: a shareholding in a borrower, a referral fee from a broker, a relative on the client's board, a credit officer reviewing a loan they helped write. The conflict is not the wrong; acting on it undisclosed is. Disclosure moves the decision to someone without the interest, and a declaration is only as good as its date — a conflict that arose after the form was signed is undeclared.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WORKED IN

// NEXT TO IT

All 80 terms on one page