The Gramm-Leach-Bliley Act of 1999: Risk Implications for the Financial Services Industry
University of Akron - Department of Finance
Ann Marie Whyte
University of Central Florida
Journal of Financial Research, Forthcoming
We document significant risk changes in the financial services industry following the passage of the Gramm-Leach-Bliley Act of 1999. Banks experience an increase in risk regardless of whether they have taken steps to participate actively in the investment banking business. Insurance companies also experience an increase in risk, whereas securities firms experience a decrease in risk. We attribute the increase in risk for banks and insurance companies to the fact that the securities business is relatively more risky, and the decline in risk for securities firms to the fact that they can now diversify into relative less risky banking and insurance businesses.
JEL Classification: G21, G22Accepted Paper Series
Date posted: February 10, 2004
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