A day after a federal judge struck down the designation of MetLife as a “systemically important financial institution” or “SIFI,” GE Capital on Thursday also called upon the government to stop considering it “too big to fail.”
The Fairfield, Conn. firm said that its parent GE had filed a request to the Financial Stability Oversight Council for rescission of GE Capital’s designation as a nonbank SIFI, contending that it has dramatically reduced its size as GE transitions to become a more focused digital industrial company. As such, it “does not pose any conceivable threat to U.S. financial stability.”
“Our plan to change our business model, shrink the company, and reduce our risk profile has been successful,” GE Capital chairman and chief executive Keith Sherin said in a press release. “We have completed over 80% of our projected asset reductions; exited leveraged lending and U.S. consumer lending; exited nearly all middle market lending; reduced real estate debt by more than 75% and real estate equity by 100%; and reduced outstanding commercial paper almost 90%”
The firm now looks forward to working cooperatively with the FSOC on the request to rescind the SIFI designation, Sherin said.
While the announcement came a day after the MetLife court decision, GE Capital said the two events were unrelated and had made its intentions known in October to seek “de-designation,” according to Reuters.
Investor Carl Icahn wants AIG to take another route to lose its “to big to fail” status — split into smaller companies, Reuters said. However, AIG CEO Pete Hancock said on Thursday the MetLife court decision created an opportunity for the company to seek de-designation, but it was “reserving judgment.”