The US government is to launch a legal challenge after a judge found a decision to classify MetLife as “too big to fail” was unlawful.
The Financial Times reports a previously confidential ruling was made public yesterday which found the US government’s decision that the provider was a threat to financial stability was “arbitrary and capricious”.
US District Judge Rosemary Collyer also ruled classing MetLife as a systemically important financial institution did not take into account the impact and costs to the insurer.
Judge Collyer found regulators had “focused exclusively on the presumed benefits of [MetLife’s] designation and ignored the attendant costs, which is itself unreasonable”.
The US Treasury plans to appeal the ruling.
Treasury secretary Jack Lew says: “This decision leaves one of the largest and most highly interconnected financial companies in the world subject to even less oversight than before the financial crisis.
“The government will appeal the district court’s decision.”
MetLife was the only financial group to fight the US government over its classification in the courts.