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Article
Corporate governance and the market impact of the Financial Services Modernization Act of 1999 on bank returns and trading volume
Faculty Publications
  • Carl J. Pacini
  • William A. Hillison
  • David C. Marlett
  • Deanna O. Burgess
SelectedWorks Author Profiles:
Carl J. Pacini
Document Type
Article
Publication Date
2005
Date Issued
January 2005
Date Available
April 2014
Disciplines
Abstract
Recent deregulation of financial services by the Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (GLB), places more reliance on corporate governance to oversee the actions of financial institutions. We examine whether corporate governance variables explain bank shareholder reaction to GLB passage. We find that banks with better board oversight react favorably to the GLB and banks with less effective board monitoring react less favorably to the GLB. Banks with lower leverage, lower insider ownership, less board activity, a smaller board, fewer inside directors, and less visibility respond more positively to the GLB. Results indicate investor approval of the legislative effort to increase the role of corporate governance in the banking industry and affirm the importance of effective corporate oversight among financial institutions.
Comments
Abstract only. Full-text article is available only through licensed access provided by the publisher. Published in Journal of Economics and Finance, 29(1), 46-72. Members of the USF System may access the full-text of the article through the authenticated link provided.
Language
en_US
Publisher
Springer New York LLC
Creative Commons License
Creative Commons Attribution-Noncommercial-No Derivative Works 4.0
Citation Information
Pacini, C., Hillison, W., Marlett, D. & Burgess, D. (2005). Corporate governance and the market impact of the Financial Services Modernization Act of 1999 on bank returns and trading volume. Journal of Economics and Finance, 29(1), 46-72.