The Wall Street Journal noted last week in an editorial, behind a paywall, that the Federal Reserve has bank regulators crawling all over MetLife Inc. (NYSE:MET) looking for evidence of some kind of risk that would justify classifying the company as a systemically important financial institution (SIFI).
The regulators’ idea is that, given the events of 2007 and 2008, maybe there’s some kind of creepy-crawly risk inside MetLife that could pop out in a moment of crisis and reduce other financial services companies to a smelly green ooze.
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MetLife would be eligible for government help in an emergency. In exchange for that help, it would have to pay a capital charge on product lines that regulators view as especially risky. One of those especially risky product lines is said to be long-term care insurance (LTCI).