Prudential Finance removed from US ‘too big to fail’ list
US insurance giant Prudential Finance was removed from the list of organisations judged “too big to fail” today by US regulators.
Prudential was the last of the insurance firms on the list of major financial institutions which was drawn up post-financial crisis.
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The Financial Stability Oversight Council said today it had decided financial distress at Prudential would not pose a risk to US financial stability and Prudential should no longer be subject to supervision by the board of governors of the Federal Reserve System and enhanced prudential standards.
Treasury Secretary Steven Mnuchin said: “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.”
Prudential said in a statement: “We are pleased with this decision, which affirms our longstanding belief that Prudential never met the standard for designation. This outcome reflects Prudential’s sustainable business model, capital strength and comprehensive risk management, which have and continue to enable us to fulfil our promises to our customers, deliver consistent performance and meet regulatory obligations.”
The decision will free Prudential from millions of dollars of extra costs needed to comply with the regulations.
Prudential was the last of the non-bank financial institutions subject to the regime after AIG, MetLife and General Electric's financial arm were all removed from the list in recent years.
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