paper shows that financial regulation can be effective at mitigating this type of risk. Exploiting regulatory changes … financial institutions subject to stricter regulation. Following the easing of these regulations, overconfidence-induced risk …A large body of literature finds that managerial overconfidence increases risk-taking by financial institutions. This …

absence of effective regulation. That explains why with deregulation market competition could culminate in excessive risk … opportunistic profit (rent) seeking was more the cause rather than the effect of moral hazard and regulation failure. Deregulation … promised higher profitability partly because of better risk management made possible by advances in information technology and …