Supervision release 29 October 2020 – 68/2020

New EBA Guidelines on loan origination and monitoring incorporated into FIN-FSA guidelines and regulations

Changes have been made to the Financial Supervisory Authority’s regulations and guidelines 4/2018 “Management of credit risk by supervised entities in the financial sector”. The changes will come into force on 30 June 2021. In the same context, the name of regulations and guidelines 4/2018 has been changed to correspond better with its content: Management of credit risk and assessment of creditworthiness by supervised entities in the financial sector.

Through the changes, the Guidelines on loan origination and monitoring, published by the European Banking Authority (EBA) on 29 May 2020, will be added to FIN-FSA regulations and guidelines 4/2018. The Guidelines will begin to be applied from 30 June 2021, subject to certain transitional arrangements mentioned in the Guidelines.

The EBA Guidelines

  • clarify the internal governance and control framework for the credit-granting and decision-making process;
  • specify the requirements for assessing the creditworthiness of borrowers at the point of credit granting to (1) consumers, (2) micro and small enterprises and (3) medium-sized and large enterprises, and set out the requirements for handling information and data for such assessments;
  • extend the scope of the Guidelines on the assessment of the credit worthiness of consumers to also cover other consumer loans in addition to consumer loans related to residential property;
  • set out supervisory expectations for the risk-based pricing of loans;
  • provide guidance on the approaches to the valuation of immovable and movable property collateral at the point of credit granting, and the monitoring and review of the value of such collateral
  • specify the ongoing monitoring of credit risk and credit exposures, including regular credit reviews of borrowers.

The EBA Guidelines on creditworthiness assessment  (EBA/GL/2015/11) will cease to be valid on 30 June 2021, when the above-mentioned Guidelines begin to be applied. Consequently, FIN-FSA regulations and guidelines 3/2017, by which the EBA Guidelines have been incorporated into the FIN-FSA’s set of regulations and instructions, will be repealed as of the same date.

For further information, please contact

Torsten Groschup, Senior Risk Expert, telephone +358 9 183 5333 or torsten.groschup(at)