Beschreibung:
This study examines whether CEO overconfidence affects banks' mortgage lending decisions in the post-financial crisis period. Despite the improvements in bank regulations and intensified monitoring following the financial crisis of 2007-2009, we find that banks managed by overconfident CEOs are more likely to approve mortgage applications of risky borrowers between 2010-2017. The positive impact of CEO overconfidence is more pronounced in banks with powerful CEOs and poor governance quality. Our results are robust to endogeneity concerns and alternative variables. This paper sheds lights on the impact of CEO overconfidence on bank policies after the 2008 financial crisis