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 …

We show that banks' risk exposure in one asset category affects how they report regulatory risk weights for another … asset category. Specifically, banks report lower credit risk weights for their loan portfolio when they face higher risk … constraints. Our results suggest the existence of incentive spillovers across different risk categories. We relate this behavior …

This paper provides a novel rationale for the regulation of market size when heterogeneous firms compete. A regulator …

excessive risk-taking in the banking industry. This paper incorporates managerial overconfidence and limited bank liability into … a principal-agent model, where the bank manager unobservably chooses effort and risk. An overconfident manager … overestimates the returns to effort and risk. We find that managerial overconfidence necessitates an intervention into banker pay …

Uncertainty in election outcomes generates politically induced regulatory risk. For monopoly regulation, political … parties' risk attitudes towards such risk depend on a fluctuation effect that hurts both parties and an output …-expansion effect that benefits at least one party. Irrespective of the parties' risk attitudes, political parties have incentives to …

Regulation needs effective supervision; but regulated entities may deviate with unobserved actions. For identification … supply. Exposed (unregulated) nonbanks buy the shed risk. AQR drives the results, not the end-of-year. After AQR compliance …

The EU General Data Protection Regulation (GDPR) of 2018 introduced stringent transparency rules compelling firms to …