Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212217 
Year of Publication: 
2012
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 14/2012
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We investigate the role of corporate boards in bank loan contracting. We find that when corporate boards are more independent, both price and nonprice loan terms (e.g., interest rates, collateral, covenants, and performance-pricing provisions) are more favorable, and syndicated loans comprise more lenders. In addition, board size, audit committee structure, and other board characteristics influence bank loan prices. However, they do not consistently affect all nonprice loan terms except for audit committee independence. Our study provides strong evidence that banks tend to recognize the benefits of board monitoring in mitigating information risk ex ante and controlling agency risk ex post, and they reward higher quality boards with more favorable loan contract terms.
JEL: 
G21
G34
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-799-3
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.