Abstract
The Gramm-Leach-Bliley Act (GLBA) of 1999 is the most sweeping deregulation of the U.S. financial services industry in the last century. One would expect the impact of such extensive deregulation in the U.S. market would not be restricted only to its financial services industry. Thus, by analyzing the wealth effects of the GLBA on the insurance industries of other developed countries, especially on member countries of the European Union (E.U.), our study addresses three important questions that focus on opportunities created for non-U.S. insurance companies; the GLBA’s impact on these companies; and, finally, the variable wealth effects on non-U.S. companies.
This chapter also appeared as Networks Financial Institute Working Paper 2009-WP-13.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Companies in the United States whose equity is at least 10% owned by non-U.S. persons (before 1990). Thereafter, non-U.S. persons who own equity directly, or indirectly through a holding company system, 10% or more of the company.
- 2.
Broome and Markham (2001).
- 3.
Pfeffer (1976) argues that no country has sufficient private insurance capacity to absorb all the insurable risk in its territory.
- 4.
OECD publications.
- 5.
OECD publications.
- 6.
See Berger et al. (2000) for details discussion of the Home Field Advantage hypothesis.
- 7.
Berger et al. (2000).
References
Akhigbe A, Whyte AM (2001) The market’s assessment of the financial services modernization act of 1999. Financ Rev 36:119–138
Akhigbe A, Frye MB, Whyte AM (2005) Financial modernization in the U.S. banking markets: a local or global event? J Bus Finance Account 37:1561–1585
Berger AN, DeYoung R, Genay H, Udell GF (2000) Globalization of financial institutions: evidence from cross-border banking performance. Brooking-Wharton Papers in Financial Services 3
Binder JJ (1985) Measuring the effects of regulation with stock price data. Rand J Econ 16: 167–183
Blander M (2000) Shrinking in the big apple. The Banker 150
Broome L, Markham J (2000) Banking and insurance: before and after the Gramm-Leach-Bliley act. J Corp Law 25:723–785
Bruner RF, Simms JM (1987) The international debt crisis and bank security returns in 1982. J Money Credit Bank 19:46–55
Carow KA, Heron R (2002) Capital market reactions to the passage of the financial services modernization act of 1999. Q Rev Econ Finance 42:465–485
Cornett MM, Tehranian H (1990) An examination of the impact of the Garn-St. germain depository institutions act of 1982 on commercial banks and savings and loans. J Finance 45:95–111
Goldberg LG, Saunders A (1981) The determinants of foreign banking activity in the United States. J Bank Finance 5:17–32
Grosse R, Goldberg LG (1991) Foreign bank activity in the United States an analysis by the country of origin. J Bank Finance 15:1093–1112
Lee DE, Tompkins JG (2002) Winners and losers as financial service providers converge: evidence from the financial modernization act of 1999. Financ Rev 37:53–72
MacKinnon JG, White H (1985) Some heteroskedasticity consistent covariance matrix estimators with improved finite sample properties. J Econ 29:305–325
Madura J, Whyte AM, McDaniel WR (1991) Reaction to the British bank share prices to Citicorp’s announced $3 billion increase in loan loss reserves. J Bank Finance 15:151–163
Mamun A, Hassan MK, Lai VS (2004) The impact of the Gramm-Leach-Bliley act on the financial services industry. J Econ Finance 28:333–347
Mamun A, Hassan MK, Maroney N, Karels GV (2005) Financial services modernization act of 1999: market assessment of winners and losers in the insurance industry. J Ins Issues 28: 103–128
Moshirian F (1997) Foreign direct investment in insurance services in the United States. J Multinational Financ Manage 7:159–173
Musumeci JJ, Sinkey JF (1990) The international debt crisis, investor contagion, and bank security returns in 1987: the Brazilian experience. J Money Credit Bank 22:209–220
Pfeffer I (1976) Non-tariff barriers to alien insurance in United States. J Risk Insur 43(2):275–289
Schwert GW (1981) Using financial data to measure the effects of regulation. J Law Econ 25: 121–145
Seth R et al (1998) Do banks follow their customers abroad? Financ Mark Instrum Inst 7(4):1–25
Vaughan EJ, Vaughan T (1999) Fundamentals of risk and insurance, 8th edn. Wiley, New York, NY
Wagster, JD (1996) Impact of the 1988 Basel accord on international banks. J Finance 51: 1321–1346
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2011 Networks Financial Institute
About this chapter
Cite this chapter
Hassan, M.K., Mamun, A. (2011). Global Impact of the Gramm-Leach-Bliley Act: Evidence from Insurance Industries of Developed Countries. In: Tatom, J. (eds) Financial Market Regulation. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-6637-7_5
Download citation
DOI: https://doi.org/10.1007/978-1-4419-6637-7_5
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4419-6636-0
Online ISBN: 978-1-4419-6637-7
eBook Packages: Business and EconomicsEconomics and Finance (R0)