The financing unit of industrial giant GE has sold many of its assets, making it a much smaller lender
The financing unit of General Electric Co. on June 29 won approval from federal regulators to drop its designation as a “systematically important financial institution,” a title that comes with added scrutiny and stricter rules.
The label, which has been handed out by the Financial Stability Oversight Council since the 2008 recession, is given to companies that the U.S. regulator deems so large that their failure could threaten the entire economy. Along with stricter supervision, being designated a “systematically important financial institution” can be costly for a company. Life insurer MetLife has sued the U.S. to remove the title.
GE Capital was given the label three years ago. The company pushed the U.S. to drop it in March, arguing that it sold many of its assets, making it a much smaller lender. Today, GE Capital is focusing on offering loans to companies that want to buy GE’s industrial products, such as airplane engines or medical equipment.
In a statement about its decision, the Financial Stability Oversight Council said GE Capital is now “significantly smaller and safer.”
Shares of Fairfield, Connecticut-based General Electric rose 43 cents, or 1.4 per cent, to $30.37 in morning trading Wednesday.