Better shop around

24 September 2012 By Agnes T. Crane

To free itself from the Fed’s strong grip, MetLife opted to unload $7 bln of deposits to the U.S. conglomerate. Tired of waiting for the headless FDIC’s OK, the insurer is enlisting the OCC instead. This classic arbitrage illustrates the trouble with the whole oversight regime.

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U.S. insurer MetLife said on Sept. 21 it amended its agreement to sell $7 billion of deposits to General Electric Capital after the primary regulator Federal Deposit Insurance Corp. failed to approve or deny the sale. The changed terms mean the Office of the Comptroller of the Currency rather than the FDIC will be the regulator charged with approving the sale.
MetLife announced the sale in December last year.
MetLife is selling the depository business so it won’t be regulated by the Federal Reserve as a bank holding company. In March, the insurer failed the Fed’s stress test aimed at assessing the health of large financial institutions it regulates.

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