I don’t get this. I really don’t. GE needed a regulatory body to strip it of the supposed ‘too big to fail designation’? I had no idea some cubicle living miscreant was encumbered with the duty to decide whether or not a company was too big to fail or not. Apparently, our bureaucracy runs deep.
The Financial Stability Oversight Council granted the idiots from GE a formal release from the ‘too big to fail club’, effectively saying it was no longer important and tantamount to being a floating piece of offal in some body of water…inside a sewer.
“GE Capital has made fundamental strategic changes that have resulted in a company that is significantly smaller and safer, with more stable funding,” Treasury Secretary Jacob Lew, who also heads the oversight council, said in the release. “After a rigorous review and engagement with the company over the last year, the council determined that based on these changes, the designation is no longer warranted.”
‘Congrats’ to GE.
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Haha spot on commentary, and true statement about our bureaucracy. If you peak in, it’s a rabbit hole.
Bloomberg says “GE investors had been calling for the company to reduce its exposure to financial markets since GE Capital jeopardized the parent company in the financial crisis.”
GE is up 1.84% so far this morning. In trying to figure out the practical consequences of removal of the TBTF designation, what I come up with here is that it must be like a Buy rating from a borkerage house. If a regulatory body removes the TBTF rating on the company, this implies that its stock now gets a high rating as a SOMPF stock– a safe old man pension fund stock.