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MetLife wins ‘too big to fail’ US court bid

Posted March 31, 2016

Alex Sebastian

US-based life insurance company MetLife saw its share price rise 5% after a judge ruled that the government’s decision to label it a systemically important financial institution (SIFI) be withdrawn.

Early trading on Wall Street saw the company’s share price jump from $43.08 (£29.96, €37.82) to $45.28 after the US District Court for the District of Columbia overturned the Financial Stability Oversight Council (FSOC) decision that the insurance giant was large enough to pose a threat to the financial stability of the US.

Companies classified as SIFIs are subject to tighter regulatory controls and higher capital requirements.

SIFIs in the US include firms such as AIG, Prudential, and BMO; as well as credit card giants American Express and Capital One.

The FSOC powers were instilled under the 2010 Dodd-Frank law, introduced following the collapse of several financial institutions during the 2008 financial crisis previously considered ‘too big to fail’.

Steven Kandarian, chairman, president and chief executive at MetLife, said: “Today’s ruling validates MetLife’s decision to seek judicial review of our SIFI designation.

“From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States. This decision is a win for MetLife’s customers, employees and shareholders.”

This article was originally published by International Adviser


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