Lender individualism and monitoring: Evidence from syndicated loans

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