Financial Market Regulation

1. Front Matter

   Pages i-xviii

   PDF

2. Overview: Recent and Prospective Financial Legislation

   1. Front Matter

      Pages 1-1

      PDF

   2. Financial Legislation: The Promise and Record of the Financial Modernization Act of 1999

      • John A. Tatom

      Pages 3-17

   3. Did the “Repeal” of Glass-Steagall Have Any Role in the Financial Crisis? Not Guilty. Not Even Close

      • Peter J. Wallison

      Pages 19-29

   4. Glass-Steagall in Our Future: How Straight, How Narrow

      • Martin Mayer

      Pages 31-41

3. Some Empirical Evidence on the Effects of the Gramm-Leach-Bliley Act

   1. Front Matter

      Pages 43-43

      PDF

   2. Cross-Border Impact of Financial Services Modernization Act (FSMA): Evidence from Large Foreign Banks

      • M. Kabir Hassan, Abdullah Mamun, Ihsan Isik

      Pages 45-61

   3. Global Impact of the Gramm-Leach-Bliley Act: Evidence from Insurance Industries of Developed Countries

      • M. Kabir Hassan, Abdullah Mamun

      Pages 63-77

4. Continuing Issues in Financial Regulation

   1. Front Matter

      Pages 79-79

      PDF

   2. A Program for Minimizing the Private and Public Costs of Bank Failures

      • George G. Kaufman

      Pages 81-92

   3. The Importance of Monitoring and Mitigating the Safety-Net Consequences of Regulation-Induced Innovation

      • Edward J. Kane

      Pages 93-106

   4. Redefining and Containing Systemic Risk

      • Edward J. Kane

      Pages 107-120

   5. I Am Superman: The Federal Reserve Board and the Neverending Crisis

      • Christopher Whalen

      Pages 121-147

   6. How to Avoid the Next Taxpayer Bailout of the Financial System: The Narrow Banking Proposal

      • Ronnie J. Phillips, Alessandro Roselli

      Pages 149-161

   7. Regulation of Bank Management Compensation

      • David VanHoose

      Pages 163-183

5. Legislation and Implications: The View from the Top

   1. Front Matter

      Pages 185-185

      PDF

   2. The Lure of Leveraging: Wall Street, Congress, and the Invisible Government

      • James A. Leach

      Pages 187-219

6. Back Matter

   Pages 221-240

   PDF

What role should regulation play in financial markets? What have been the ramifications of financial regulation? To answer these and other questions regarding the efficacy of legislation on financial markets, this book examines the impact of the Gramm Leach Bliley Act (GLBA), also called the Financial Modernization Act of 1999, which fundamentally changed the financial landscape in the United States. The GLBA allows the formation of financial holding companies that can offer an integrated set of commercial banking, securities and insurance products. The tenth anniversary of the most sweeping financial legislation reform in the industry’s structure is a natural benchmark for assessing the effects of the law and for questioning whether changes are necessary in the working of this historic legislation. The importance of this review is reinforced by a variety of proposals in the last several years to reform the regulation of financial institutions that have attracted considerable attention among regulators and in the financial firms that they regulate. Most recently, the financial crisis and the failure of some large financial institutions have called into question the legitimacy of America’s current financial structure and its regulation, including to some degree the GLBA. There is no doubt that regulatory reform is front and center on today’s policy agenda. The lessons of the GLBA experience and its effects, both domestic and international, on financial markets and competitiveness, risk-taking and risk management by financial services firms and their regulators will be critical to the direction the country takes and the effort to ensure that future financial crises do not occur or have less costly damage. With contributions from academics, policy experts, and a sponsor of the GLBA, Congressman James Leach, this book is invaluable to anyone interested in financial system reform.

• Financial Modernization Act
• Gramm-Leach-Bliley Act (GBLA)
• financial crisis
• financial institutions
• regulatory systems

• Indiana State University, Scott College of Business, Networks Financial Institute, Indianapolis, USA

  John A. Tatom

Policies and ethics