Contemporary bank governance is criticized for manager-dominated (insider) boards of directors, but from the beginning … of the nineteenth century, bank presidents appear also to have operated as chairmen of the boards of directors. However …

firms are more likely to have a multi-tiered capital structure consisting of both secured bank debt with tight covenants and … subordinated non-bank debt with loose covenants. Further, while high credit quality firms enjoy access to a variety of sources of … discretionary flexible sources of finance, low credit quality firms rely on tightly monitored secured bank debt for liquidity. We …