Author: David Schwartz J.D. CPA
Over the objections many, including asset managers, insurance companies, and even legislators and other regulators, the Financial Stability Oversight Council (FSOC) has pushed ahead with its mandate to identify risks to financial stability that could arise from the material financial distress or failure, or ongoing activities, of nonbank financial companies (Non-bank SIFIs). Thus far, the FSOC has designated four firms as Non-bank SIFIs: On July 8, 2013, the FSOC voted to designate American International Group, Inc. and General Electric Capital Corporation, Inc.; on September 19, 2013, the FSOC voted to designate Prudential Financial, Inc.; and on December 18, 2014, the FSOC voted to designate MetLife, Inc. MetLife is not taking the FSOC's action lying down, however. The firm has taken to the courts to challenge its Non-bank SIFI designation. And more influential industry voices are speaking out against not only the designation process, but the very need for prudential oversight of Non-bank SIFIs.