GE to Feds: Get Off Our Back

To prevent another financial meltdown like the one that took place in September 2008, where banking institutions required bailouts from the federal government, a list of “systemically important financial institutions was developed,” or SIFIs. Like other companies on the SIFI list, such as Goldman Sachs and Bank of America, GE has been under Federal Reserve scrutiny since the list, created by the Financial Stability Board, was approved at the Seoul, Korea G20 Summit.

By selling off its lending division last year, GE relinquished half its financial business profits and feels it no longer should have to abide by the requirements of the Board.

The remnants of GE Capital, the company’s finance arm, are “smaller, simpler and less interconnected with the U.S. financial system,” the company said, and the unit “does not pose any conceivable threat to U.S. financial stability.”

If approved, GE’s financial arm would no longer be tagged as “too big to fail.”

Yesterday, MetLife won a similar court ruling, escaping the need to be under tough federal scrutiny.

“A federal judge in Washington struck down the designation on Wednesday in a decision that could shake up the financial regulatory reform implemented following the 2008 recession,” Bloomberg reported. “The ruling might give ammunition to Republican lawmakers who’ve argued that regulators have abused their authority under the Dodd-Frank Act.”

If GE also wins, we can expect an avalanche of new filings by financial and insurance institutions.

SHARE
Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at chiefexecutive.net and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit www.chiefexecutive.net for more information.

PARTNER CENTER