Behavioral Economics in Financial Regulation

This advanced course explores the integration of **Behavioral Economics (BE)** into the design and implementation of financial regulation and supervision. Traditional financial models assume rational actors; BE introduces real-world cognitive biases and heuristics to explain consumer and firm behavior, leading to more effective policy interventions. Participants will learn how to diagnose market failures caused by irrationality, design **behaviorally informed regulations** (e.g., smarter disclosures, default rules, cooling-off periods), and utilize **Nudge Theory** to promote better financial decision-making, ensuring regulation is not just legally sound but also practically effective.