We claim that we currently live in a banking regulatory bubble. We review how: i) banking intermediation theory hinges on dealing with borrower-lender asymmetry of information; ii) instead, the presence of complete information is the keystone of the finance theory. Next, we document how finance...

Financial bubbles cause misallocation of resources and even systemic crises. Experimental finance has long tested both the determinants of the formation of financial bubbles and institutional designs meant at solving such bubbles. We explore whether the dual process theory proposed by Kahneman...