GE asked the Federal Reserve to strip it of its designation as a ''systemically important financial institution'' that's seen as ''too big to fail.'' Fred Katayama reports.
GE wants the Feds off its back. One day after insurer MetLife won a court battle to rid itself of its designation as a "systemically important financial institution," General Electric asked the Federal Reserve to strip it of that so-called SIFI label. That designation is given to companies that are considered "too big to fail," subjecting them to tight capital requirements and stricter government oversight. GE said GE Capital poses no threat to U.S. financial stability and no longer meets the criteria for designation as a nonbank SIFI. GE argues among other things that it has more than halved its assets in its financing unit and lessened its ties to the financial system by splitting off consumer finance company, Synchrony Financial, and exiting consumer and leveraged lending . It has been shrinking GE Capital so it can focus on its manufacturing and technology businesses. On GE's chances of getting Fed approval, William Blair analyst Nick Heymann said, "100 percent. They've dismantled and extinguished risk." GE says the timing of the filing of its request is unrelated to the ruling on MetLife and is a complete coincidence.