Federal Reserve Removes Supervisors from MetLife Over Federal Judge’s Ruling

Federal Reserve Removes Supervisors from MetLife Over Federal Judge’s Ruling

A federal judge rescinded federal oversight of MetLife Inc on Wednesday and that led to removal of Federal Reserve supervisors from the insurer.

The ruling said New York based MetLife Inc is not significant enough to justify special regulatory scrutiny or 'too big to fail' labeling. That also benefits several other non-bank financial firms to attempt and set them free from the similar designation.

Wednesday's decision could benefit insurers like Prudential Financial Inc and American International Group Inc, GE Capital and other asset managers like Fidelity Investments, BlackRock Inc and the Vanguard Group Inc.

The Financial Stability Oversight Council had deemed Metlife, AIG, Prudential and GE Capital the only non-banks as systemically important financial institutions (SIFI).

Though BlackRock, Vanguard and Fidelity were not assigned the status of systemic importance, but several regulatory experts and analysts said those financial institutions are adequately big to grant consideration for the same. However it is tricky to assess if any among these financial firms can shun the classification of 'too big to fail' perpetually as the criteria keeps changing and SIFI assessments begin afresh each year. In that case even the victory gained by MetLife could me momentary.

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