We examine the spillover effects of the Global Analyst Research Settlement (or Global Settlement) on analysts' earnings forecasts in 40 developed and emerging markets. Prior to the Global Settlement, analysts generally made overly optimistic forecasts, this bias tending to be higher in countries...

Recent efforts of regulators have helped neutralize analysts' conflict of interest. Analysts tended to make overly optimistic earnings forecasts prior to Regulation FD and the Global Analyst Research Settlement. Regulation FD made analysts less dependent on insider information and, thereby,...