MetLife is facing big bank-style regulation after it was named a “systemically important” financial institution by regulators Thursday.
That label means that regulators consider the company a potential threat to the financial system if it were to collapse.
The decision was made at a meeting Thursday morning of the Financial Stability Oversight Council, an umbrella organization of federal financial regulators tasked with identifying systemic financial threats.
The Council had first proposed labeling MetLife systemically important in September, and the company had contested the designation, saying that its life insurance business model does not pose a threat to the broader economy.
The company announced Thursday that its appeal was denied.
“We are disappointed in the FSOC decision,” MetLife said in a statement Thursday afternoon. “We continue to believe that MetLife is not systemically important under the Dodd-Frank Act’s criteria,” the company said, referring to the 2010 law that created the Council.
The company left the possibility of legal recourse on the table. It noted that under the law it has 30 days to seek a judicial review of the Council’s decisions, and said that it will “carefully review the designation rationale as it considers its next steps.”
The Council has already designated Prudential Financial systemically important, as well as American International Group, the insurance company whose 2008 collapse threatened Wall Street and ultimately prompted Congress to create the Council. General Electric Capital was also given the designation.
As a result, those companies face higher capital standards as well as supervision from the Federal Reserve.
