Tomahawk, WI 09/05/2014 (Basicsmedia) – MetLife Inc. (NYSE:MET) has vehemently opposed the move by regulators to designate it as a ‘Systematically Important’ institution and has consequently vowed to fight the ruling in court. Bloomberg’s Julie Hyman reports that the company has 30 days to appeal the ruling.
The ruling by regulators is a major blow for MetLife Inc. (NYSE:MET) CEO, Steven Kandarian, who has worked tirelessly to avoid the designation. The CEO maintains that the company has always acted as a model financial institution especially during times of economic distress.
“MetLife Inc. (NYSE:MET) still has 30 days to appeal this decision to request a hearing, to contest it, so there is still a little bit of time for MetLifeInc. (NYSE:MET), but this is a potential defeat for that CEO, Steve Kandarian,” said Mrs. Hyman.
Once the Financial Stability Oversight Council hears MetLife Inc. (NYSE:MET)’s applications as to why it is not be’ designated the Systematically Important label a final vote will be made to determine what befallsthe company going forward.
Kandarian has cited regulatory uncertainty as the reason MetLife Inc. (NYSE:MET) has failed to meet profit targets from time to time having met with regulators and lawmakers with documents supporting why he is opposed to the label. Being designated as systematically important means that MetLife is so big and interconnected such that if things go wrong it could cause a collapse in the financial sector.
“[…] it does subject MetLife to more regulations from federal regulators and of course MetLife Inc. (NYSE:MET) is not the only insurer that has tried to avoid this designation. We’ve seen it happen on the part of other insurance some of whom have talked about switching their designation to a bank or switching to another type of a financial institution,” said Mrs. Hyman.
The repercussion of the label means that MetLife will have to increase its cushion on its operations in terms of capital to avoid any future losses. MetLifeInc. (NYSE:MET) may also be’ limited on using any borrowed money and would be subject to examiners from time to time.