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MetLife (MET -0.5%) shares lagged the market as Sterne Agee noted the life insurance company may...
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Thursday, June 14, 2012, 5:05 PM ETMetLife (MET -0.5%) shares lagged the market as Sterne Agee noted the life insurance company may be unable to return capital to shareholders due to regulatory hang-ups. The Fed twice has rejected MET's plans to raise its dividend and buy back shares; if MET can't do the buyback, the firm says expected 2013 EPS would be cut by nearly 5%.
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Of course FDIC puts off reviewing their sale of bank assets to GE Capital, basically just to keep MetLife under their thumb as long as possible.
MetLife has made no secret of their disagreement with the Fed's approach, which is totally bank centric and betrays a lack of understanding of the insurance business, not to mention an unwillingness to learn anything about it.
Insurance has been regulated by the states for over 100 years, with excellent results, particularly when compared to how OTS supervised AIG. Remember that one? State regulators would not have permitted AIG to write CDS (credit insurance) without adequate capital and under inappropriate terms of coverage. So AIG opted for the toothless (and now defunct) OTS, a bank regulator, or more accurately, enabler.