From Amity Schlaes in Forbes, Metlife Takes the Lead:
“THANK YOU, MetLife.”
That’s what we all ought to be saying this month, as the insurance company goes before a panel of federal judges to defend its bid to keep the MetLife name off of the federal government’s “Too Big to Fail” list.
The facts of MetLife v. Financial Stability Oversight Council are simple. After the 2008 financial crisis lawmakers passed the Dodd-Frank financial reform act. Dodd-Frank, in turn, created the FSOC, establishing a class of so-called systemically important financial institutions, or SIFIs. The SIFIs would be herded into a corral reinforced with heavy capital requirements and cumbersome regulations. The FSOC promptly herded big banks into its SIFI corral–and then for good measure took out its lasso to rope in insurance companies. The nonbank MetLife’s total balance-sheet assets as of 2013–when the FSOC made its move–stood at $900 billion, which makes MetLife more elephant than steer.
But this elephant has a habit of resisting federal lures, dating back to 2008, when MetLife, unlike fellow insurer AIG, didn’t take a Treasury rescue. MetLife also had the temerity to actually make money during the crisis years. Postcrisis, MetLife noted the obvious: The states, not Washington, regulate insurance companies.