Bloomberg News

GE Says Finance Arm in Last Stage of Systemic-Risk Review

February 26, 2013

General Electric Co. (GE:US)’s finance arm is in the final stage of a regulatory review to determine whether it needs extra scrutiny because of the risk that its potential failure would pose to the U.S. economy.

GE Capital Corp. “is under consideration for a proposed determination as a nonbank systemically important financial institution,” Fairfield, Connecticut-based GE said today in a filing. “Such a determination would subject GECC to proposed enhanced supervisory standards.”

The document confirms an October report that GE Capital was under consideration to be deemed systemically important. GE included the same language in a third-quarter filing. Other firms in the final stage of review include insurers American International Group Inc. and Prudential Financial Inc.

Companies tagged systemically important could see dividends and buybacks curbed as regulators try to head off a repeat of the 2008 crisis that almost destroyed the banking system. The Financial Stability Oversight Council is evaluating which companies must submit to Federal Reserve supervision.

GE, the maker of jet engines to locomotives, rose 1.1 percent to $23.05 at the New York close. The shares (GE:US) have surged 24 percent in the past year.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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