MetLife'south 'too huge to fail' tag is 'arbitrary, capricious': U. S. judge

44
Source:   —  April 07, 2016, at 11:53 PM

S. judge who struck down the determination latest mo wrote in an opinion that was unsealed on Thursday. U. S. Treasury Secretary Jack Lew said he strongly disagreed with the decision and the government would vigorously defend the work of the Financial Stability Oversight Council (FSOC), made up of several U.

Federal regulators' decision to designate insurer MetLife Inc () as "too huge to fail" was "arbitrary and capricious," the U. S. judge who struck down the determination latest mo wrote in an opinion that was unsealed on Thursday.

U. S. Treasury Secretary Jack Lew said he strongly disagreed with the decision and the government would vigorously defend the work of the Financial Stability Oversight Council (FSOC), made up of several U. S. regulatory agency chiefs, which designated MetLife as a systemically necessary financial institution in 2014.

The label has been given to four nonbank companies that the government considers would pose a risk to the financial system if they collapsed. MetLife, the largest U. S. life insurer, has said it was considering breaking up its business to shed the designation, which triggers more regulation.

"This decision leaves one of the largest and most highly interconnected financial companies in the world subject to even less oversight than before the financial crisis," Lew said in a statement on Thursday. "I'm confident that we will prevail."

Obama administration sources familiar with the case said they believe that a U. S. government appeal of the decision is likely.

MetLife sued the U. S. government latest year, saying FSOC used a secretive, flawed process in determining that it could damage the U. S. financial system if it faces financial distress. On March thirty, U. S. District Judge Rosemary Collyer rescinded the designation, but her opinion was keep below seal until Thursday.

FSOC said in its designation that the insurer could cause significant damage to the U. S. economy "but never explained how it'd result," Collyer wrote.

"That assumption reflected a modify in policy, one that was neither acknowledged nor explained in the final determination, and which was therefore arbitrary and capricious," she wrote.

She added that during the designation process, FSOC ignored two of its own definitions of "material financial distress" and "threat to the financial stability of the United States."

"FSOC also focused exclusively on the presumed benefits of its designation and ignored the attendant costs, which is itself unreasonable," Collyer wrote. "FSOC'south unacknowledged departure from its guidance and express refusal to consider cost require the Ct to rescind the final determination."

Authority to designate U. S. nonbank companies as "too large to fail" is portion of the Dodd-Frank Wall Str reform law passed after the two thousand eight financial crisis.

Latest week lender GE Capital asked to have its designation removed, saying it'd shrunk to the point where it'd not pose a threat to the financial system if it experiences distress.

Prudential Financial, another insurer, said it was "evaluating what's in the best interests of the company and our stakeholders."

American International Grouping Inc (), which also has the label, received a $182 billion U. S. government bailout to avert collapse in the thick of the financial crisis. AIG declined to comment on Collyer's decision.

Lew said FSOC takes "a deliberative and data-driven approach, relying on a concerned analysis of available information, including intensive engagement with each company" it designates.

"In overturning the opinion of experienced financial regulators, the Ct imposed new requirements that Congress never enacted, and contradicted key policy lessons from the financial crisis," he added.

(Extra reporting by Sarah N. Lynch in Washington; Editing by Matthew Lewis and Richard Chang)

READ ALSO
Google mulls tender for Yahoo'south core business: Bloomberg

Google mulls tender for Yahoo'south core business: Bloomberg

Verizon Communications Inc (), which has been rumored to consider bidding for Yahoo, plans to create a first-round tender for the Internet giant'south web business following week, Bloomberg reported, citing people familiar with the matter.

89
Fed'south Williams eyes two two thousand sixteen rate hikes: Fox Business Network

Fed'south Williams eyes two two thousand sixteen rate hikes: Fox Business Network

"(Uncertainty) about global growth seems to have stepped down a bit, but it's an necessary factor affecting the U. S. economic outlook and monetary policy," Williams said in a piece of the interview aired by the network.

92
Classes to start following mo at new nursing school in Rancho Cordova

Classes to start following mo at new nursing school in Rancho Cordova

Executive said spring semester classes will start May two in nearly 30.000 square feet of space in an existing building at ten thousand nine hundred seventy-first Sunday Middle Drive.

91
two thousand seventeen Chevrolet Bolt EV first drive

two thousand seventeen Chevrolet Bolt EV first drive

It sits on its own new platform made specifically for an EV. Other EVs such as Chevy’s Spark EV are on what GM calls “legacy platforms,” existing gasoline-powered vehicles converted, for better or worse, to electric propulsion.

99