ECIN Replication Package for "Bondholder representatives on bank boards: a device for market discipline"

<div>Replication package for "Bondholder representatives on bank boards: a device for market discipline"</div><br>Abstract<b> <br></b>We examine whether board representation of
bondholders can be an effective market discipline mechanism to reduce bank
risk, using a unique dataset combining information on bondholders and boards of
directors of European listed banks. Our results show that the influence of
bondholder representatives on the bank board significantly reduces bank risk
without impacting profitability. The beneficial effect of this market
discipline mechanism is stronger when bondholder representatives have
regulatory experience, current or long relationships with their affiliated
bondholders, and for more complex banks. In contrast, the reducing impact on
bank risk is smaller for banks with lower capitalization levels.