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Lender individualism and monitoring: Evidence from syndicated loans

Kalyvas, A.N. (2023) Lender individualism and monitoring: Evidence from syndicated loans. Journal of Financial Stability, 66 (23). Article Number 101123. ISSN 1572-3089. (doi:10.1016/j.jfs.2023.101123) (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:101326)

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This paper addresses the question, “Does lenders’ culture affect their monitoring efforts and style?”, by exploring whether lender individualism affects the loan monitoring of U.S. borrowers for a sample of 27,164 syndicated loan facilities granted between 1998 and 2017. We proxy lender individualism based on the ancestral country of origin of the lead bank's CEO. We show that lender individualism leads to a less stringent monitoring style. We find that individualist lenders resort less to covenant monitoring, impose less strict contract terms, such as performance pricing and rely more on soft information. We also provide evidence that individualist lenders retain a larger loan share and deal with a larger number of lenders. Finally, we find that some governance characteristics (board size and percentage of female directors) and other CEO features (cash compensation, tenure, and non-duality) moderate the negative association between lender individualism and loan monitoring.

Item Type: Article
DOI/Identification number: 10.1016/j.jfs.2023.101123
Uncontrolled keywords: CEOs; Individualism; Syndicate loans; Monitoring; Covenants
Subjects: H Social Sciences > HG Finance
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Funders: University of Kent (
University of Southampton (
Depositing User: Nikolaos Antonios Kalyvas
Date Deposited: 18 May 2023 07:49 UTC
Last Modified: 19 May 2023 07:57 UTC
Resource URI: (The current URI for this page, for reference purposes)

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