Prudential Financial released from Fed supervision

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Prudential Financial (PRU) will no longer be subject to extensive regulatory review now that the US government has raised the company's "too big to fail" label after the financial crisis. The last non-bank company to be relieved of its title, the announcement of Prudential marks the end of post-crisis efforts for the US Federal Reserve to regulate existing institutions outside the banking system."data-reactid =" 22 ">Prudential Financial (PRU) will no longer be subject to extensive regulatory review now that the US government has raised the company's "too big to fail" label after the financial crisis. The last non-bank company to be relieved of its title, the announcement of Prudential marks the end of post-crisis efforts for the US Federal Reserve to regulate existing institutions outside the banking system.

Regulators said Wednesday that the largest life insurer in the US no longer represented systemic risk to the US economy because it had more liquidity than before, adding that Prudential's products did not pose the risk of losing money. concern about financial stability.

"The decision made by the board today follows a close relationship with the company and a detailed analysis showing that there was no significant risk that the company could pose a threat to the company. financial stability, "said Treasury Secretary Steven Mnuchin.

Prudential said it was "pleased with this decision, which confirms our longstanding belief that Prudential has never met the designation standard." The company will continue to be regulated by the New Jersey Banking and Insurance Department.

The last "financial institution of systemic importance"

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Prudential was the last non-bank corporation to be considered a "systemically important financial institution", a designation designated by a 10-member group of regulators known as the Financial Stability Oversight Council. The CSF is headed by the Treasury Secretary."data-reactid =" 27 ">Prudential was the last non-bank corporation to be considered a "systemically important financial institution", a designation designated by a 10-member group of regulators known as the Financial Stability Oversight Council. The CSF is headed by the Treasury Secretary.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Under the Dodd-Frank legislation adopted by the Congress in 2010 after the crisis, the FSOC is entitled to attribute to any company a label of "systemic importance" if it is deemed to pose a threat to the financial stability of Member States. -United. "data-reactid =" 28 ">Under the Dodd-Frank legislation adopted by the Congress in 2010 after the crisis, the FSOC is entitled to attribute to any company a label of "systemic importance" if it is deemed to pose a threat to the financial stability of Member States. -United.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If it is too systemic, the FSOC levies the designation on the company and requires the Fed to oversee the institution. "data-reactid =" 29 ">If it is too systemic, the FSOC levies the designation on the company and requires the Fed to oversee the institution.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Between 2013 and 2014, four companies obtained the label: Prudential, MetLife (MET), American International Group (AIG) and the financing subsidiary of General Electric (GE)."data-reactid =" 30 ">Between 2013 and 2014, four companies obtained the label: Prudential, MetLife (MET), American International Group (AIG) and the financing subsidiary of General Electric (GE).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For a few years, the Fed developed regulations that subject companies to stress tests and other compliance requirements similar to those faced by banks."data-reactid =" 31 ">For a few years, the Fed developed regulations that subject companies to stress tests and other compliance requirements similar to those faced by banks.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In 2016, the FSOC canceled the designation of GE because it had sold enough financial assets to no longer constitute "a threat to US financial stability", but the other three companies continued to be regulated. Although MetLife has been successful in a lower court to get rid of its label of "systemic importance," the Obama administration has appealed."data-reactid =" 32 ">In 2016, the FSOC canceled the designation of GE because it had sold enough financial assets to no longer constitute "a threat to US financial stability", but the other three companies continued to be regulated. Although MetLife has been successful in a lower court to get rid of its label of "systemic importance," the Obama administration has appealed.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But when the Trump administration took office, the influx of new regulators sought to remove the designations. While advocates for the designation argue that the Fed needs to oversee risks outside the banking system, opponents say it's unfair for a bank regulator to oversee – and impose costs of – compliance – to a company that does not have a bank-type balance sheet. ."data-reactid =" 33 ">But when the Trump administration took office, the influx of new regulators sought to remove the designations. While advocates for the designation argue that the Fed needs to oversee risks outside the banking system, opponents say it's unfair for a bank regulator to oversee – and impose costs of – compliance – to a company that does not have a bank-type balance sheet. .

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A large number of Trump's appointees in bank branches and other offices have been willing to release companies from the SIFI designation. The FSOC is now essentially composed of regulatory bodies appointed by Trump, the committee – led by Mnuchin – deletion of the designation of AIG so what withdrew its lawsuit against MetLife. Janet Yellen, nominated by Obama, voted in favor of removing the designation of AIG, but Obama's regulators of the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp. and the Federal Housing Finance Agency voted against the motion."data-reactid =" 34 ">A large number of Trump's appointees in bank branches and other offices have been willing to release companies from the SIFI designation. The FSOC is now essentially composed of regulatory bodies appointed by Trump, the committee – led by Mnuchin – deletion of the designation of AIG so what withdrew its lawsuit against MetLife. Janet Yellen, nominated by Obama, voted in favor of removing the designation of AIG, but Obama's regulators of the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp. and the Federal Housing Finance Agency voted against the motion.

The vote to deselect Prudential was unanimous.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brian Cheung is a Yahoo Finance journalist."data-reactid =" 36 ">Brian Cheung is a Yahoo Finance journalist.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Read more:"data-reactid =" 37 ">Read more:

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