What will it take to be de-designated as a systemically important financial institution by the Financial Stability Oversight Council? We will need to wait longer for the answer to that burning question as, despite a restructuring that will slice away most of its financing arm, General Electric was not able to shed its SIFI tag during an anual review last week.
At a July 31 FSOC meeting of the Financial Stability Oversight Council, American International Group and General Electric Capital Corporation had their status as nonbank financial companies designated as SIFIs re-confirmed. Singled out for increased regulatory scrutiny because their size and scope make insolvency a threat to the broader financial marketplace, the two firms received the SIFI label in 2013, joining similarly designated banks. SIFIs are required to conduct regular stress tests, prepare credit exposure reports, and draft “...
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