U.S. failed to show how MetLife is “too big to fail,” judge says
Source: Washington Post
A key Obama administration measure aimed at preventing a repeat of the financial crisis is under assault.
In a court ruling unsealed Thursday, U.S. District Judge Rosemary M. Collyer criticized the government process used to label the giant insurance company, MetLife, too big to fail. The designation forces MetLife to set aside a bigger financial cushion and put in place other safeguards to protect taxpayers if it falls into financial trouble. But Collyer called the government process fatally flawed.
This Court cannot affirm a finding that MetLifes distress would cause severe impairment on the financial markets, the ruling said.
The case is a huge test of a central mission of the 2010 financial reform package, known as Dodd-Frank identifying financial firms, outside of banks, that could pose a threat to the economy. These firms have traditionally received little government scrutiny. But after the massive insurance company AIG nearly collapsed in 2008 and required a $182 billion taxpayer bailout, lawmakers called for stricter oversight of this portion of the financial industry.
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Read more: https://www.washingtonpost.com/news/business/wp/2016/04/07/u-s-failed-to-justify-how-metlife-is-too-big-to-fail-judge-says/
Spitfire of ATJ
(32,723 posts)LS_Editor
(893 posts)cstanleytech
(26,291 posts)unconstitutional just that in the case of MET Life the government needs to explain in detail why it thinks MET should be considered to big to fail.
If the government does that then MET is SOL as far as this ruling goes.
Jack Rabbit
(45,984 posts)We should never surrender to tyranny!
Yo_Mama
(8,303 posts)Here is the opinion:
https://www.documentcloud.org/documents/2793065-MetLife-Opinion.html
The most significant factor in the decision is that FSOC released a guidance and then failed to follow its own guidance when making the determination.
If the FSOC wants to go back and redo the process, it may. It is this particular decision which has been reversed on the grounds that it violated rules of regulatory law, not the basic authority of the FSOC to regulate.
jomin41
(559 posts)I say Let Them Fail. If, because of their actions, a billion dollars disappears, just print up another billion and inject it back into the economy, AT THE BOTTOM. Let the investors eat sawdust.