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US-BANKING-REGULATION-CRISIS
US rescinds Prudential’s ‘too-big-to-fail’ designation
WASHINGTON, Oct 18, 2018 (BSS/AFP) – US regulators on Wednesday removed
insurance giant Prudential Financial from the list of financial institutions
that are deemed “systemically important” and placed under heightened
government supervision.
The Financial Stability Oversight Council, created in the wake of the 2008
global financial crisis, announced it had voted to rescind its finding that
trouble at Prudential could cause problems for the financial stability of the
United States.
“The council’s decision today follows extensive engagement with the
company and a detailed analysis showing that there is not a significant risk
that the company could pose a threat to financial stability,” Treasury
Secretary Steven Mnuchin said in a statement.
The council’s decision was unanimous but one member, Federal Housing
Finance Authority Director Mel Watt, said there had been no independent
evaluation of the impact on the market from Prudential’s size.
Under the 2010 Dodd-Frank Wall Street reform laws, dozens of banks and
others were designated as “systemically important financial institutions”
requiring heightened scrutiny to reduce risks to the broader economy. Many
objected strongly.
The oversight council recently also removed insurance giant American
International Group, MetLife and the lending arm of General Electric from the
list.
In a statement on Wednesday, Prudential said it was “pleased” with the
decision, which it said reflected its strong capitalization and
“comprehensive risk management.”
BSS/AFP/HR/0954