The operative question for the country’s largest financial firms is increasingly whether the government has made it too expensive to be big.
On Tuesday, insurer MetLife Inc. became the second major firm in the past 10 months to decide that the demands of being “systemically important” in the eyes of regulators may outweigh the benefits of continuing to operate at its current size. General ElectricCo. made the same choice in April for its giant finance arm, GE Capital.
The moves show that while the U.S. government hasn’t heeded populist calls to “break up” the nation’s largest financial firms, those demands are at times being answered through indirect pressure from regulators.
Next up could be MetLife rivals Prudential Financial Inc. andAmerican International Group Inc., analysts say. The latter is facing a challenge from investors, including Carl Icahn, who argue in part that the firm is “too big to succeed” given the regulatory requirements it now must meet that restrain profits.