Overconfidence has been extensively examined in the corporate environment, particularly in the context of financial markets. Despite this, little is known about its impact on the banking sector and how it constrains these biases. The literature on board gender diversity to date does not offer a consensus on how board gender diversity interacts with CEO overconfidence when considering credit risk. This research aims to fill a gap in the literature by examining the impact of CEO overconfidence on a bank's asset quality and the moderating influence of board gender diversity on this association. The analysis depends on a cross-country sample of 66 listed European banks from 2014 Q1 to 2021 Q4. The findings show that CEO overconfidence has a significant negative impact on the bank's asset quality. Furthermore, the results demonstrate that board gender diversity plays an important role in constraining the CEO overconfidence biases and improving the bank's asset quality. The research implies that bank regulators must encourage sound governance practices that reduce excessive risk-taking while closely monitoring the cultural and societal context that can influence the proportion of women directors on bank boards.