MetLife Ruling Vindicates Lonely Decision to Fight
By Alistair Gray and Barney Jopson
US finance chiefs have often grumbled about the tough rules imposed as part of the Dodd-Frank reform package enacted after the 2008 crisis. But most of them have gone along with the various strictures, for fear of reigniting the anti-Wall Street feeling that swept the country after the collapse of Lehman Brothers. Not Steven Kandarian, chief executive of the insurer MetLife. He argued that the Obama administration had gone too far when it identified his company as a potential threat to the financial system that needed extra supervision. While rivals Prudential and AIG acquiesced to their designation as “systemically important” financial institutions, MetLife, the US’s largest insurer by assets, went to court. This week a federal judge sent ripples through Washington and Wall Street by ruling that Mr Kandarian was right. US District Judge Rosemary Collyer rescinded MetLife’s Sifi designation giving it reprieve from the regulatory consequences of being considered “too big to fail”, including the threat of higher capital requirements. “It’s a profound embarrassment to the FSOC,” said Karen Shaw Petrou, managing partner at the Washington-based consultancy Federal Financial Analytics.