This is the Cato Daily Podcast for Thursday, August 21st, 2014.

I'm Caleb Brown.

MetLife may soon be among institutions tagged as systemically important to the U.S. financial system, but what

does systemically important mean and what value do investors believe that

designation confers. Mark Calabria is director of financial regulation studies at the Cato Institute.

He offers his thoughts.

So it really is one of the interesting tensions in Dodd-Frank that, you know, title

two of Dodd-Frank is supposed to be the set of tools to end too big to fail

but by contrast title one of Dodd-Frank is the set of tools which allows regulators

and in this case the Financial Stability Oversight Council to designate firms is too big to fail.

So it's, you know, this tension of what we're going to say these certain amount of firms are too big to

of course we're going to label them systemically important.

We're not going to call them too big to fail.

And then we're going to say we have another process to end that. And so by statute, Dodd-Frank says that if you're a bank

holding company, which of course would include savings and loans

any sort of depository that if you're over 50 billion assets you're automatically in.

So that process is already in statute so Dodd-Frank passes Citibanks, systematically

automatically. The Financial Stability Oversight Council, which to some

extent is a beefed up what was before the president's working group.

So he used to have a working group of the financial regulators

should come meet and talk about things

in the financial markets.

...