Abstract
This article examines the risk effect of the Sarbanes-Oxley Act of 2002 (SOX) for the US financial services (FS) industry. The major provisions of SOX relate to increased transparency of the financial reporting system and improved internal governance of firms. The overall results support that SOX reduced the total risk and idiosyncratic risk of FS firms, particularly of banks, savings and insurance companies. Yet, this article finds an increase in systematic risk of banks, savings and insurance companies. This outcome may be due to increased financial integration, innovation, globalization and deregulation.
Original language | English |
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Pages (from-to) | 1005-1015 |
Number of pages | 11 |
Journal | Applied Financial Economics |
Volume | 24 |
Issue number | 15 |
Early online date | 2 Jun 2014 |
DOIs | |
Publication status | Published - 1 Aug 2014 |
Externally published | Yes |