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GE Says Forced Finance Break ‘Increasingly Unlikely’
(Bloomberg) — General Electric Co. said financial- regulation measures being debated in Washington are “increasingly unlikely” to force a separation of the GE Capital unit from the parent company.
GE won’t need to raise outside capital, executives repeated today to investors during a Webcast review of GE Capital, and credit default swaps to protect against a default by the finance unit dropped to a 10-month low. Provisions for potential losses should peak in 2010, setting the stage for improved earnings, executives said.
“We’re consistently hearing from people that we shouldn’t be breaking up successful institutions when they weren’t the cause of the crisis,” General Counsel Brackett Denniston, who said he was in Washington yesterday to get an update, told investors. “This forced breakup idea is increasingly unlikely to be adopted as part of this total” reform package.
Proposals that some analysts have said might prompt the separation of the finance unit are beginning to wind through Congress as a part of President Barack Obama’s financial- regulations package.
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