Government to Review Zions Bid to Shed 'Systemically Important' Tag

By Lalita Clozel

WASHINGTON -- A financial regulatory body appears set to review a bid by Zions Bancorp to escape the "systemically important" label that triggers heightened supervisory standards.

The Financial Stability Oversight Council said Thursday that at a meeting next week, it would discuss the "potential application" of a firm under an exemption from a Dodd-Frank Act provision that keeps large banks from evading the tougher supervision standards by shedding their bank holding companies.

Zions said in November it planned to drop its bank holding company, a move that allowed it to petition the council to release it from the designation.

Three large nonbank firms have in recent years succeeded in shedding their "systemically important" designations. In 2016, the FSOC released General Electric Co. from the label after the company wound down its financial arm. In September, the council released American International Group Inc. from the designation, in a decision backed by four new Trump appointees as well as former Fed Chairwoman Janet Yellen. And in January, the FSOC dropped an appeal against a 2016 ruling that overturned its designation of MetLife Inc. as systemically important.

In the April 12 meeting, the FSOC is also slated to discuss "potential amendments" to how it designates firms as systemically important, following a November report by the Treasury Department outlining a number of recommended changes.

The council will also consider "an update on the annual re-evaluation of the designation of a nonbank financial company." Insurer Prudential Financial Inc. is the only nonbank left bearing the systemically important label.

Write to Lalita Clozel at lalita.clozel.@wsj.com

(END) Dow Jones Newswires

April 05, 2018 20:46 ET (00:46 GMT)

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