WASHINGTON – The Financial Stability Oversight Council announced Wednesday it was rescinding the systemic designation of GE Capital, the first time the interagency body has de-designated a firm.

While the move has been expected given GE Capital's decision to sell its financial assets, it is proof that a SIFI designation is not permanent.

"Today's decision clearly demonstrates that the Council's designation of nonbank financial companies is a two-way process," said Treasury Secretary Jacob Lew. "The council will remove a designation when that company no longer poses risks to U.S. financial stability."

With around $500 billion in assets, GE Capital was the nation's seventh-largest bank holding company when it decided last year to start selling most of its financial assets and spin off its consumer finance unit, Synchrony, as a separate business.

"GE Capital has made fundamental strategic changes that have resulted in a company that is significantly smaller and safer, with more stable funding," Lew said. "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."

The FSOC designated GE Capital as a systemically important financial institution in July 2013. As a result, it was subject to Federal Reserve Board supervision and stricter prudential standards, including higher capital and liquidity requirements.

After its decision to divest of its financial assets, GE began meeting with the Treasury periodically and was notified in March that its request to be de-designated was being reviewed.

The eight members of the FSOC, which include the federal financial regulators with the Treasury secretary serving as chair, voted unanimously on Tuesday to rescind the designation.

"The council's rescission of GE Capital's designation is the result of a methodical analysis of risks that is in keeping with the law and the lessons of the financial crisis," Lew said.

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