NEW YORK: General Electric Co. asked the US to drop the “too big to fail” tag for GE Capital, saying that its financing operations are a shadow of what they were when the Federal Reserve placed it under strict oversight in the aftermath of the global economic crisis almost a decade ago.
The company has been in broad retreat over the past year from its financial ventures, largely because of the cost and risk of complying with boundaries set by the US Federal Reserve.
It’s shed billions in financial assets as it returns to its industrial roots.
GE Capital was listed a “systemically important financial institution,” by the Financial Stability Oversight Council following the financial collapse of 2008, a financial institutions deemed to be so big and entwined with the US financial system that it could threaten the entire economy if it failed.
That, General Electric said Thursday, has changed.
GE Capital has reduced its assets to 52 percent to $265 billion, the company said Thursday. Financing receivables are down 74 percent, from $277 billion to $72 billion. Loans secured by real estate are down 77 percent, GE said.
Loans to consumers are down 95 percent, from $72 billion to $4 billion. Those loans are gone in the US.
On Wednesday, the company announced the $485 million sale of GE Asset Management.
“We have completed over 80 percent of our projected asset reductions; exited leveraged lending and US consumer lending; exited nearly all middle market lending; reduced real estate debt by more than 75 percent and real estate equity by 100 percent; and reduced outstanding commercial paper almost 90 percent,” said GE Capital Chairman and CEO Keith Sherin in a printed statement.
The request comes a day after MetLife, the largest US insurance company, had the same designation tossed out by a federal judge.
It was a major legal victory for MetLife, which took the government to court more than a year ago.
In fighting the oversight agency’s action, MetLife said that tougher requirements on life insurance companies would force the companies to raise the prices of their products, reduce the amount of risk they take on in selling their products, or stop offering some products altogether.
Capital requirements for banks were established to protect depositors, rather than ensuring that life insurers can meet their obligations to policyholders, the company said.
Other than MetLife and GE Capital, the other two nonbank companies under SIFI oversight are American International Group Inc. and Prudential Financial Inc.
Banks labeled “too big to fail” include JP Morgan Chase, Citigroup, Morgan Stanley, Bank of New York Mellon, Bank of America, Wells Fargo, and Goldman Sachs.
GE seeks removal of ‘too big to fail’ label
GE seeks removal of ‘too big to fail’ label
Free trade negotiations between GCC, India mark new phase of partnership, says sec-gen
RIYADH: The Gulf Cooperation Council’s secretary-general affirmed that the negotiations for a free trade agreement between the GCC and India, and the signing of the joint statement, represents a new phase of strategic partnership.
Jasem Mohamed Al-Budaiwi said that this contributes to enhancing close cooperation and strengthening economic and trade ties, according to the Saudi Press Agency.
This came during the signing ceremony of the joint statement on launching the free trade agreement negotiations between the Al-Budaiwi and India’s Minister of Commerce and Industry, Piyush Goyal, which took place in New Delhi, on Tuesday.
During the signing ceremony, Al-Budaiwi said that the Terms of Reference, signed on Feb. 5, provide a comprehensive and clear framework for these negotiations. The two nations agreed to discuss enhancing cooperation in vital strategic areas, including trade in goods, customs procedures, and services.
Additionally, the framework covers Sanitary and Phytosanitary measures, intellectual property rights, cooperation on Micro, Small, and Medium Enterprises, along with other topics of mutual interest. This reflects the comprehensive nature of the agreement and its ability to keep pace with the future economy.
Al-Budaiwi expressed hope that these negotiations would lead to a comprehensive and ambitious free trade agreement that works to remove customs and non-customs barriers, enhance the flow of quality investments in both directions, and achieve further liberalization in trade and investment cooperation between the GCC and India for mutual benefit.
This would provide a stimulating economic environment and an investment climate that opens broad horizons for the business sector, supports supply chains, and accelerates the pace of economic growth in line with the ambitious developmental visions of the GCC states.
The top official affirmed the full readiness of the General Secretariat to host the first round of negotiations at its headquarters in Riyadh during the second half of this year.
The two sides held a meeting during which they reviewed the existing cooperation relations between the GCC and India and discussed ways to develop and elevate them to broader horizons, serving mutual interests and enhancing opportunities for strategic partnership between the two sides, particularly in the economic, investment, and trade fields.
They praised the role undertaken by the negotiating teams from both sides, appreciating the efforts contributing to reaching a comprehensive agreement that enhances economic integration and supports the smooth flow of trade between the two nations.
