Wall Street's Big, Bad Post-Crisis Regulator Is Cautious

A court ruling that erased MetLife Inc.’s too-big-to fail label has been depicted as a referendum on the future of the Dodd-Frank Act’s super regulator. But the key power that the Financial Stability Oversight Council wields -- designating firms as being so big and interconnected that their failure could threaten the financial system -- was already gathering cobwebs.

While U.S. District Judge Rosemary M. Collyer slammed FSOC for the way it went about labeling MetLife, she made clear that she believes the council was acting within its authority, meaning the ability to designate other companies isn’t really in doubt. Even so, the council has been slow to go after anybody else, and indications that it was looking at companies such as Berkshire Hathaway Inc. and Nomura Holdings Inc. haven’t gone anywhere.