The US District Court for the District of Columbia ruling in favour of MetLife’s challenge to its designation as a systemically important financial institution (Sifi) is not expected to last, according to US counsel.
The District Court opinion of March 30 was authored by Judge Rosemary Collyer. It found that the Financial Oversight Stability Counsel (FSOC) “declined to consider MetLife’s vulnerability to material financial distress.” FSOC was created by Title 1 of the Dodd-Frank Act and given the responsibility of identifying and monitoring systemic financial sector risk in the US.
FSOC has had its critics. Some claim the agency has designated too many institutions as Sifis, some claim it’s designated too few. Since Dodd-Frank, FSOC has actually designated four institutions as non-bank Sifis: AIG, GE and Prudential in 2013, and MetLife in 2014.
Four has been enough, however, to create both controversy and resistance....