The persistence of financial instability calls into question the adequacy of the current regulatory regime. Acritical review of the three pillars at the core of current financial regulation exposes some structural flaws.[...]

We investigate whether bank performance during the credit crisis of 2008 is related to CEOincentives and share ownership before the crisis and whether CEOs reduced their equity stakes intheir banks in anticipation of the crisis. There is no evidence that banks with CEOs whoseincentives were...