US judge rules MetLife not systemic financial risk

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Washington (AFP)

A US judge Wednesday annulled a federal designation of insurer MetLife as a systemically important financial institution requiring much stricter regulation.

The insurer has since late 2014 fought the classification by federal regulators, which requires so-called "too big to fail" financial institutions to hold more capital.

"Today's ruling validates MetLife's decision to seek judicial review of our SIFI designation," the insurer said.

"From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States. This decision is a win for MetLife's customers, employees and shareholders."

The decision was announced in a two-page order by US District Judge Rosemary Collyer. Collyer's full ruling was kept under seal.

MetLife was designated as systemically important by the Financial Stability Oversight Council (FSOC), an advisory board of regulators led by the Treasury secretary set up under 2010 US legislation following the 2008 financial crisis.

The Treasury Department, in a statement, firmly defended the SIFI designation, saying it is meant to address "potential threats to financial stability."

"We strongly disagree with the court's decision," Treasury said.

"FSOC conducted a rigorous analysis of MetLife, including extensive engagement with the company, and determined that material financial distress at MetLife could pose such a threat to the financial system. We firmly believe that FSOC acted well within its legal authority to protect the entire global economy."'

Treasury said it would "continue to defend" the SIFI designation, but did not directly address whether it would appeal Collyer's decision.

Shares of MetLife rose 4.6 percent to $44.42 in afternoon trade.