MetLife Inc is challenging its government designation as a company that is “too big to fail” because it would pose such a risk to the economy.
The designation brings with it stricter guidelines from federal overseers and the company says, exorbitant costs.
The life insurance company said on Tuesday that it will file with the US District Court for the District of Columbia to overturn the US Financial Stability Oversight Council’s designation of the New York company as a non-bank, systemically important financial institution.
Companies deemed “systemically important” are obligated to increase the money held in reserve to protect against huge losses, limit their use of borrowed money and submit to inspections by US Federal Reserve examiners.
The New York company is one of only four non-bank corporations on the list and received the designation last month, according to the US Department of the Treasury. The others are American International Group Inc, General Electric Capital Corp — the finance arm of General Electric Co — and Prudential Financial Inc.
The near-collapse of AIG in 2008 helped trigger the financial crisis and it received a US$182 billion federal bailout that it has since repaid.
MetLife Inc, which has a market capitalization of about US$57 billion, said the designation will increase costs for consumers.
“MetLife has always supported robust regulation of the life insurance industry and has operated under a stringent state regulatory system for decades,” chairman and CEO Steven Kandarian said. “However, adding a new federal standard for just the largest life insurers and retaining a different standard for everyone else will drive up the cost of financial protection for consumers without making the financial system any safer.”
Kandarian said that the council — which was created to help prevent another financial meltdown — designated non-bank systemically important financial institutions before the rules governing those companies have been written.
“The council should wait until the rules are in place and it knows the impact on designated firms,” Kandarian said.
Kandarian cited the Dodd-Frank Act, stating that the act makes it “clear that size alone does not make a company systemic.”
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Her white-gloved, waistcoated uniform impeccable, 22-year-old Hazuki Okuno boards a bullet train replica to rehearse the strict protocols behind the smooth operation of a Japanese institution turning 60 Tuesday. High-speed Shinkansen trains began running between Tokyo and Osaka on Oct. 1, 1964, heralding a new era for rail travel as Japan grew into an economic superpower after World War II. The service remains integral to the nation’s economy and way of life — so keeping it dazzlingly clean, punctual and accident-free is a serious job. At a 10-story, state-of-the-art staff training center, Okuno shouted from the window and signaled to imaginary colleagues, keeping
RSS