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MetLife Declared Systemically Important by FSOC

The Financial Stability Oversight Council has issued a final determination that MetLife Inc. is a systemically important financial institution, which will force the insurer to meet heightened prudential standards and subject it to Federal Reserve oversight...
December 23, 2014

The Financial Stability Oversight Council (FSOC) has issued a final determination that MetLife Inc. is a systemically important financial institution, which will force the insurer to meet heightened prudential standards and subject it to Federal Reserve oversight. MetLife is considering legal action and said that it presented substantial and compelling evidence to the FSOC that no future financial problem could disrupt the U.S. economy during a period of stress.

Three other nonbanks—American International Group Inc., Prudential Financial Inc. and the financial unit of General Electric—have also been designated as systemically important by the FSOC. The designation subjects companies to additional federal regulation and could make it more difficult for them to increase dividends or to buy back shares.

For weeks, MetLife's lawyers have been working on a lawsuit that the company might file to challenge the FSOC's decision. Inside sources say MetLife executives are continuing to debate whether to pursue their case in court, and it seems that they are leaning toward filing a lawsuit. The company released a statement noting that under the Dodd-Frank law it has 30 days to seek a judicial review and would carefully review the designation rationale as it considers taking such legal action.

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