This paper examines the consequences of a series of reforms that aim at resolving analyst conflicts of interest driven by investment banking businesses. In the pre-reform period, earnings forecasts and stock recommendations issued by analysts at research firms are more optimistic than those issued by investment bank analysts. However, investment-bank analysts' forecasts exhibit a higher frequency of optimism-to-pessimism intertemporal biases. After the reforms, forecast optimism decreases for

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... l firm types. The reduction is unexpectedly greater for research firms than investment banks. There is also a significant reduction in the frequency of optimism-to-pessimism forecasts and in the optimism of stock recommendations made by investment bank analysts. These findings are consistent with the reforms achieving the goal of making investment bank analysts' research less optimistic. However, the accuracy of investment bank forecasts drops and the profitability of stock recommendations remains unchanged, suggesting that the reforms adversely affect the quality of earnings forecasts.