In response to the financial crisis of 2008, the global banking industry has been undergoing fundamental regulatory changes, imposed by the Basel III Agreement, the 2010 US Dodd-Frank Act and the introduction of a new European supervisory structure. This paper analyses the possible long-term...

A large body of literature finds that managerial overconfidence increases risk-taking by financial institutions. This paper shows that financial regulation can be effective at mitigating this type of risk. Exploiting regulatory changes introduced after the financial crisis as a natural...