The suit is going to be dismissed. The U.S. Department of Justice and MetLife have both agreed they will seek to dismiss the government’s appeal of a Federal District Court Judge’s decision that MetLife should not be designated as a systemically important financial institutions also known as too-big-to-fail.
Since AIG and GE Capital have been removed by the Financial Stability Oversight Council (FSOC) as too-big-too-fail and will not be subject to enhanced financial regulations. That means the only non-banking company left on the list is Prudential.
Treasury Secretary Steven Mnuchin said this is another move by the Trump administration to ease the Obama-era business regulations. “I am pleased that the Justice Department has settled the MetLife case, consistent with the recommendation by a majority of FSOC voting members. I will be working with the Council to clarify and revise the non-bank designation rule and guidance,” he said.
The FSOC was formed in the Dodd-Frank Act after the Great Recession and was designed to make sure the nation’s largest financial institutions, banks and businesses could not collapse and have significant impact on the U.S. economy like AIG did and like banks did in the recession.
Critics said the FSOC applied its power in an inconsistent way.
By the way, expect Prudential to argue its way out of the too-big-to-fail designation in the next few months.
Source link: Insurance Journal