The effect of the Gramm-Leach-Bliley Act on the insurance industry

Neale, Faith R.; Peterson, Pamela P.

doi:10.1016/j.jeconbus.2004.11.006

Cited by 20 publications

(10 citation statements)

References 24 publications

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“…Analogous results are also reported by Hendershott et al (2002) and by Neale and Peterson (2005). On the other hand, Carow and Kane (2002) conclude that the abolition of barriers may have redistributed rather than created value for the institutions involved.…”

Section: The Bank-insurance Landscapesupporting

confidence: 76%

An event study analysis of international ventures between banks and insurance firms

Staikouras

2009

Journal of International Financial Markets, Institutions and Mo

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Section: The Bank-insurance Landscapesupporting

confidence: 76%

An event study analysis of international ventures between banks and insurance firms

Staikouras

2009

Journal of International Financial Markets, Institutions and Mo

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“…Akhigbe and Whyte (2001), focusing on the late 1999 period, document a decrease in market risk for banks, insurance companies, and securities firms, yet an increase in unsystematic risk for banks and insurance companies. 18 The findings of Mamun et al (2005) and Neale and Peterson (2005) support a reduction in systematic risk accompanying the FSM Act for insurance companies. Specific to idiosyncratic risk, Correa and Suarez (2009) document lower idiosyncratic risk for banking firms following deregulation.…”

Section: The Financial Services Industrymentioning

confidence: 95%

“…25 25 See, for example, Allen, Cunningham, and Wood (1990), Ely and Robinson (1999), Cyree (2000), Carow and Heron (2002), and Neale and Peterson (2005). …”

mentioning

confidence: 99%

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Deregulation and Risk

Semaan

Drake

2011

Financial Management

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The recent market turmoil has brought attention to how deregulation of the financial sector may affect risk. The purpose of our study is to examine the market's perception of risk associated with deregulation. We accomplish this by decomposing security risk around deregulation into systematic and unsystematic risk. We examine deregulation of several industries and find a consistent pattern of risk adjustment to deregulation, whereby the increase in security risk is temporary and largely unsystematic.

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“…Mamun, Hassan, Karels and Maroney (2005), and Neale and Peterson (2005), report that the FSM Act reduces risk for insurance companies. 24 Other studies find risk reductions for banks that diversify, observing that banks have lower risk and become more diversified after merging with life insurers [Lown, Osler, Strahan and Sufi (2000)].…”

Section: B Change In Riskmentioning

confidence: 99%

Diversification in the Financial Services Industry: The Effect of the Financial Modernization Act

Neale

Drake

Clark

2010

The B.E. Journal of Economic Analysis &Amp; Policy

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The intent of the Financial Services Modernization Act of 1999 (FSM) was to strengthen the overall financial services sector by allowing financial firms to diversify across industries within the financial sector. Similar to other studies of the reaction to this Act, we observe that investors consider the FSM to be good news. More interestingly, we also observe that systematic risk increased for some types of firms, but decreased for others as barriers were lowered. This finding is consistent with the idea that the reduction of regulation may increase systematic risk, but that the effects of deregulation on risk may be mitigated by anticipated effects of diversification. Specifically, bank holding companies that chose to diversify into other financial industries experienced increases in systematic risk while those that did not diversify realized decreases in systematic risk. Overall, we find that the systematic risk of financial firms converged and increased in the past few years as firms expanded into non-traditional businesses. In addition, we find that the Act reduced systematic risk for some firms, specifically those that diversified their product lines with insurance products.

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The effect of the Gramm-Leach-Bliley Act on the insurance industry

Cited by 20 publications

References 24 publications

An event study analysis of international ventures between banks and insurance firms

An event study analysis of international ventures between banks and insurance firms

Deregulation and Risk

Diversification in the Financial Services Industry: The Effect of the Financial Modernization Act

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