Bloomberg – MetLife Inc., the largest U.S. life insurer, said fourth-quarter profit declined 12 percent on losses from hedge funds and real estate ventures. Shares gained in extended trading as the company beat analysts’ estimates.

Net income slipped to $985 million, or $1.20 a share, from $1.12 billion, or $1.44, in the year-earlier period, the New York-based insurer said today in a statement. Excluding some investment results, the company made 19 cents a share, six cents better than the average estimate of 17 analysts surveyed by Bloomberg.

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Bloomberg – Bank of England Deputy Governor John Gieve said investors are still facing “acute” stress as market declines force hedge funds to sell assets.

“The financial system remains under acute strain,” Gieve said in a speech in London today. “The falls in equity markets, corporate bond prices and the prices for leveraged loans is hitting both long-term institutional investors and leveraged investors, including hedge funds.”

The Bank of England said in a semi-annual report that $2.8 trillion in banking losses and the threat of a global recession are increasing risks to financial stability. Meanwhile, Prime Minister Gordon Brown yesterday suggested he may scrap decade- old fiscal rules to prop up the banking system as the nation faces its first recession since 1991.

Investment losses at hedge funds and insurers pose further risks to the system, the central bank’s report said, as insurers may fall short of capital requirements and face credit rating downgrades, while hedge funds may be forced to sell assets.

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