| WASHINGTON, April 24
WASHINGTON, April 24 MetLife Inc is
asking a U.S. court to put on pause a case over how the
government deems certain companies "too big to fail," one of the
most significant reforms to come out of the financial crisis,
while President Donald Trump's administration finishes reviewing
the current regulatory approach.
In March 2016 U.S. District Judge Rosemary Collyer struck
down the government's designation of MetLife as "systemically
important," saying it was "arbitrary and capricious" in
assessing the risks to the financial system of a possible
failure by the largest U.S. life insurer.
The government, under former President Barack Obama, a
Democrat, immediately appealed and the two sides squared off in
court last October, with a decision expected next month.
Some companies are wary of the "too big to fail" designation
because it forces them to hold on to capital and creates extra
oversight they say is burdensome.
Last week, Trump ordered a review of the Financial Stability
Oversight Council made up of the country's top financial
regulators and how it makes the designations.
MetLife said in its filing the review could prompt the Trump
administration to reconsider the case and whether "it is
appropriate for the government to continue pressing this
"At a minimum, the findings of the forthcoming report may
substantially illuminate this court’s consideration of the
issues on appeal," the company wrote.
Two of the three judges on the panel considering the case
were appointed by Obama, who signed the 2010 Dodd-Frank Wall
Street reform law that created designations with the intent of
preventing a repeat of the 2007-2009 financial crisis, when the
government injected billions of dollars into failing banks and
other companies in order to keep the financial system afloat.
The court appeared more sympathetic to FSOC's arguments than
Collyer, who said it should have analyzed costs and benefits to
MetLife, the likelihood MetLife would fail and possible
Whoever loses the appeal had been expected to take the case
to the Supreme Court. However, Trump's review and MetLife's
Monday motion now cast doubt on that possibility.
The U.S. Treasury did not respond to a request for comment.
Its secretary, Steve Mnuchin, is overseeing the review as chair
of the FSOC.
The only nonbanks carrying the "too big to fail" label are
American International Group, which received a $182
billion bailout during the crisis, and Prudential Insurance
. MetLife is not considered designated during the appeal.
(Editing by Matthew Lewis)