‘Damning’ Ruling Against FSOC Could Cripple Council
By John Heltman
A sharply critical ruling by a federal judge against the Financial Stability Oversight Council’s process for designating the insurance firm MetLife as a systemically risky nonbank could have a broader impact that undermines the role of the interagency council. Judge Rosemary Collyer’s decision, which was unsealed Thursday, said the FSOC “ignored or, at least abandoned” key aspects of its own rules and governing statute in designating MetLife. “Although the specifics of the decision apply solely to MetLife, the court’s characterization of FSOC’s process is so damning as to undermine the entire framework’s credibility,” said Karen Shaw Petrou, managing partner with Federal Financial Analytics. “This has considerably broader implications than getting just one grumpy SIFI off a very big hook.” The ruling, which was announced last week but unsealed only after both MetLife and the FSOC moved to have it released, offers a scathing critique of the council’s process for designating MetLife as a systemically important financial institution.
http://www.americanbanker.com/news/law-regulation/damning-ruling-against-fsoc-could-cripple-council-1080320-1.html