A lawyer defending the government’s decision to designate MetLife Inc. a threat to the American economy if it were to falter was questioned sharply by a federal judge asked by the insurer to remove that label.
The biggest American life insurance company is one of four companies tagged as a systemically important financial institution by the Financial Stability Oversight Council. The designation means it may be subject to tougher capital and leverage requirements.
The council on Wednesday asked U.S. District Judge Rosemary Collyer in Washington to throw out the insurer’s 2015 lawsuit, which contends the FSOC designation was arbitrary and unjustified. The MetLife suit is the biggest challenge yet to the regulatory council led by Treasury Secretary Jacob Lew since its creation as part of the 2010 Dodd-Frank law meant to reduce the chances of future financial crises.
Beckenhauer responded that it’s the nature of financial crises to be unanticipated.
The case is MetLife Inc. v. Financial Stability Oversight Council, 15-cv-00045, U.S. District Court, District of Columbia (Washington).
Source: Bloomberg