MetLife's 'too big to fail' tag is 'arbitrary, capricious': U.S. judge
By Lisa Lambert
WASHINGTON (Reuters) - Federal regulators' decision to designate insurer MetLife Inc (MET.N: Quote) as "too big to fail" was "arbitrary and capricious," the U.S. judge who struck down the determination last month wrote in an opinion that was unsealed on Thursday.
The U.S. government plans to appeal the court decision, a Treasury spokesman said in a statement late on Thursday.
Treasury Secretary Jack Lew said he strongly disagreed with the decision and the government would vigorously defend the work of the Financial Stability Oversight Council (FSOC), made up of several U.S. regulatory agency chiefs, which designated MetLife as a systemically important financial institution in 2014.
The label has been given to four nonbank companies that the government considers would pose a risk to the financial system if they collapsed. MetLife, the largest U.S. life insurer, has said it was considering breaking up its business to shed the designation, which triggers more regulation.
"This decision leaves one of the largest and most highly interconnected financial companies in the world subject to even less oversight than before the financial crisis," Lew said in a statement earlier on Thursday. "I am confident that we will prevail."
MetLife sued the U.S. government last year, saying FSOC used a secretive, flawed process in determining that it could hurt the U.S. financial system if it faces financial distress. On March 30, U.S. District Judge Rosemary Collyer rescinded the designation, but her opinion was put under seal until Thursday.
FSOC said in its designation that the insurer could cause significant damage to the U.S. economy "but never explained how it would result," Collyer wrote.
"That assumption reflected a change in policy, one that was neither acknowledged nor explained in the final determination, and which was therefore arbitrary and capricious," she wrote. Continued...