TY - CHAP AB - Recent research has examined the effect of the Financial Services Modernization Act of 1999, more commonly known as the Gramm–Leach–Bliley Act (GLB), on the market value of U.S. commercial banks, life insurers, property-liability insurers, thrifts, finance companies, and securities firms. This study fills a gap in our understanding of the Act by measuring the price and trading volume effects of the GLB on U.S.-listed foreign banks. A primary contribution of this study is to examine the role, if any, of two corporate governance perspectives, the stakeholder (code law), and shareholder (common law) models, in a cross-sectional analysis of foreign bank market reaction to the GLB.Using a generalized least squares (GLS) portfolio approach, Corrado's rank statistic, and confirmed by the traditional market model approach, we find significant negative share price reactions to certain legislative announcements surrounding the passage of the GLB. Trading volume reactions corroborate the significant share price responses. In general, our results indicate that investors in foreign banks reacted negatively to key legislative action. In a cross-sectional analysis, younger, higher-risk foreign banks with less concentrated ownership and more subordinated debt from countries with higher quality accounting standards appear to have more positive (or less negative) share price reactions. VL - 23 SN - 978-1-84950-441-6, 978-0-7623-1345-7/0196-3821 DO - 10.1016/S0196-3821(06)23005-3 UR - https://doi.org/10.1016/S0196-3821(06)23005-3 AU - Pacini Carl AU - Hillison William AU - Hobbs Bradley K. ED - Andrew H. Chen PY - 2006 Y1 - 2006/01/01 TI - The Share Price and Trading Volume Reactions of U.S.-Listed Foreign Banks to the Financial Services Modernization Act of 1999 T2 - Research in Finance T3 - Research in Finance PB - Emerald Group Publishing Limited SP - 127 EP - 159 Y2 - 2024/03/28 ER -