U.S. Lawyer Asks Court to Reinstate MetLife Too Big to Fail Tag

The government correctly labeled MetLife Inc. “too big to fail,” a U.S. lawyer told a federal appeals court, urging the judges to overturn a ruling that dealt a major blow to efforts to rein in risk in the financial system.

The lawyer, Mark Stern, said the Financial Stability Oversight Council followed proper procedure when it designated MetLife as a systemically important financial institution. A lower-court judge erred in March when she declared the agency’s actions as “fatally flawed,” he told the Washington-based appeals court Monday during arguments in the case.

The “too big to fail” designation would have subjected the biggest U.S. life insurance company to enhanced capital and liquidity requirements and compelled the firm to prepare plans for its orderly dissolution in the event of a crisis.

The government warns that U.S. District Judge Rosemary Collyer’s ruling threatens to undermine the financial regulatory reform implemented following the 2008 recession.

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