The incentive to enhance bank monitoring is also influenced by a bank loan's size. A bank that lends a significant amount to a borrower has a bigger incentive to monitor how a borrower manages earnings and capacity to pay. Khalil and Parigi (1998) show that loan size is a signal for a bank's incentive to strengthen monitoring, because loan size also affects a borrower's income reporting. Kang, Shivdasani, and Yamada (2000) also find a positive relation between loan size and a bank's incentive for monitoring. Lee and Mullineaux (2001) argue that syndicate members with the largest stakes in a loan have a stronger incentive to conduct monitoring than those with smaller stakes. All in all, the literature suggests that the more banks lend, the more they become vulnerable to risk, and are more motivated to strengthen monitoring (Ahn and Choi 2009). This implies that, as loan tranches increase, banks form more concentrated syndicates to observe the conduct of bank monitoring.