Regulation

PYMNTS Daily Data Dive: GE Small Enough To Fail Edition

In the wake of the financial crisis, concerns about financial institutions that were “too big to fail” reached a crescendo and led to wide public outcry about regulations. That outcry ended with Dodd-Frank, a financial reform bill that tapped all of the expected players, and some unexpected ones as well.

GE, for example. Finance was always a tenuous partnership, as a drastic restructuring in the wake of the financial crisis meant GE was determined to winnow down that part of the business and get out hyper-regulated territory. As of Wednesday the refashioning had been notable enough so that the U.S. Financial Stability Oversight Council made the decision, via vote, to remove the firm’s label as a “systemically important” financial operation, with stricter oversight of activities. 

What does that mean by the numbers? Well …

$660 billion | GE Capital’s total assets on the balance sheet tied to finance and financial activities at its peak. 

$180 billion | The amount GE has slated for removal from its balance sheet through sale of its assets.

$156 billion | The value of transactions that have already closed through those sales.

$20 billion | The amount GE is now allowed to borrow for stock buybacks.

2% | The amount GE’s shares rose on the announcement.

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Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

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