The Last SIFI: The Unwise and Illegal Deregulation of Prudential Financial, Inc.
71 Stanford Law Review Online, 2018 (Forthcoming)
13 Pages Posted: 13 Nov 2018
Date Written: November 5, 2018
On October 18, federal regulators released Prudential Financial—the last remaining systemically important nonbank financial institution—from enhanced government oversight. This Essay contends that Prudential’s deregulation was both unwise and illegal. In removing Prudential’s “systemically important” label, regulators (1) violated their established procedural rules, (2) relied on misleading quantitative analyses, and (3) failed to consider a mandatory statutory factor. By illegally deregulating Prudential, policymakers have now opened the financial system to the same risks it experienced in the lead-up to the financial crisis. This Essay therefore urges litigation and vigilant Congressional oversight challenging the rescission of Prudential’s “systemically important” status.
Keywords: Systemic Risk, Financial Stability, Financial Stability Oversight Council, Systemically Important Financial Institutions, SIFI, Nonbank Financial Companies, Prudential Financial
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