GE seeks removal of ‘too big to fail’ label

NEW YORK, March 31, (AFP): General Electric requested Thursday that US regulators drop its designation as a systemically important financial institution in light of significant divestitures over the last year.

GE had garnered the so-called “too big to fail” designation in 2013 after the government determined that significant duress at GE Capital, its financial firm, could damage the broader economy.

“Our submission details the complete transformation of GE Capital,” said GE Capital chief executive Keith Sherin in a statement.

“We believe GE Capital no longer meets the criteria to be designated as a SIFI and we look forward to working cooperatively and constructively with the Financial Stability Oversight Council through the rescission process.”

Compared with 2013, GE Capital said it has reduced its assets from $549 billion to $265 billion, trimmed loans to consumers by 95 percent and significantly scaled back its short-term and securitization funding.

Following the pending sale of GE Capital’s US deposit business to Goldman Sachs, it will no longer own any banks with deposits insured by the Federal Deposit Insurance Corporation.

GE announced in April 2015 that it planned to sell most of GE Capital and focus on its industrial businesses more fully. The shift was due in part to tougher regulations on large financial institutions after the 2008 financial crisis.

The GE Capital move comes one day after a US judge ruled that regulators at the Financial Stability Oversight Council, an advisory board of regulators led by the Treasury secretary, should not have classified insurer MetLife as systemically important.