Money management is in the brain

When we make money the brain releases increased DOPA and gives us a high like cocaine and other drugs. It may even be addicting.  As with most functions of the brain it occurs without our control.  When we lose money the opposite occurs. Cortisol and other stress chemicals are released and we fell great fear and anguish. These are all evolutionary developed processes. These are our "animal spirits' that have significant control of our monetary actions. 

When a deal is "too good to be true" but offers great reward, our chemicals push us to get involved, even though our neocortex says "no". This is why "bubbles", subprime mortages etc. happen to so called intelligent,informed people.  The brain is on a "high" and this overrides the logic.  Also, people often don't relate to history more then 10 years ago and that is why we see recurrent financial "bubbles" and  downturns. (Over 50 in last 50 years).

Once the good times begin to slip the brain reacts with overwhelming fear and panic often begins. Again, logic is overruled by this and our actions are at a very primitive level due to the fear in our brain.

These biochemical controls illustrate the need for steady regulations and transparency to control our inability to react in a rational manner to all these temptations. Once a chance to make money is presented the brain will go to any lengths of rationalization to join in the frenzy. Rationalization and other mechanisms will join in the flooding of the brain with DOPA and other feel good chemicals and it is analogous to using cocaine. 

No matter what is said the human animal needs regulations to stay in control.