MetLife Says Lew-Yellen Panel Spreads Risks It’s Supposed to End
By Katherine Chiglinskly, Andrew M Harris, Ian Katz

For MetLife Inc. Chief Executive Officer Steve Kandarian, the scariest risk is being classified as risky. MetLife lawyers go to court Wednesday seeking to overturn a too-big-to-fail designation in a lawsuit that could, if the insurer prevails, reduce the government’s ability to rein in large financial firms. If the company loses, Kandarian may face tougher oversight including harsher capital and leverage requirements, although final rules haven’t been written. The ruling may affect FSOC’s approach in considering companies for the risk tag, said Karen Shaw Petrou, managing partner of Washington-based research firm Federal Financial Analytics. The panel has been “bewilderingly cautious” about designations, she said. If the judge rules broadly in favor of MetLife, FSOC will probably appeal because “their commitment is to continue the systemic-designation process, part of the Dodd-Frank legacy,” Petrou said in an interview.