If MetLife Is Tagged As Systemically Risky, Why Isn’t Berkshire Hathaway?
Monday, 10 05 2015, Category: Insurance and Reinsurance, Country: United States
MetLife Inc., the insurer fighting the U.S. government’s decision to label it a potential threat to financial stability, wants to know why Warren Buffett’s Berkshire Hathaway Inc. has gotten a pass.
Documents just released show that question was posed last year by John Hele, MetLife’s chief financial officer, in a meeting with the Financial Stability Oversight Council. MetLife is suing the FSOC, a group of regulators that designated the insurer systemically important. The decision will probably lead to stringent capital and liquidity requirements, and could subject the company to oversight similar to that imposed on big banks.
“It is difficult to understand why, say, Berkshire Hathaway with $64 billion in debt and $277 billion of market capitalization should not be considered a systemic risk,” Hele said at the November meeting at the Treasury Department in Washington.
Source: Insurance Journal