WASHINGTON — The government has a “strong case on appeal” against a court decision throwing out the designation of MetLife as a systemically important financial institution (SIFI), Treasury Secretary Jack Lew said Tuesday.
In comments during an interview with a Bloomberg Business News reporter at the Milken Institute Global Conference in Beverly Hills, Lew said the government has a strong case because, if you look at the logic of the judge’s decision, “some things in the decision are just backwards.”
Lew added that, “The idea that you have to prove that there is a likelihood that a company will fail and cause a crisis misses the point.”
He said the real risk is that, “we have to make sure that we see the things that would have that effect. “Nobody saw a situation like AIG coming down the pike; no one predicted that would happen.”
Lew also dismissed the idea that the government is seeking to designate institutions as systemically important wholesale.
Lew said the Financial Stability Oversight Council, which he heads, has only designated four firms, American International Group, MetLife, Prudential Financial and GE Capital, “and we are doing this in a very careful way and it is analytically driven.”
Lew said each decision “is driven on its merits.”