Journal Article

Consumer financial privacy and the Gramm-Leach-Bliley Act

Abstract: By requiring financial institutions to put adequate controls in place to secure consumers? confidential data and by clearly spelling out what rights consumers and financial institutions have, the 1999 Gramm-Leach-Bliley Act is a positive step toward ensuring consumer financial privacy. If there are no market imperfections, then competition may be relied on to efficiently sort out the competing interests of consumers and financial institutions. Alternatively, if there are market imperfections in the form of externalities, the Coase theorem suggests that the act, by clearly assigning property rights to the information, should facilitate an economically efficient outcome.

Keywords: Gramm-Leach-Bliley Act; Consumer protection;

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2002

Issue: Mar

Order Number: 2