General Electric Co. objects to elements of President Obama's plan to overhaul the financial system overhaul, and analysts said the plan could force the company to cleave away its GE Capital finance unit.
"It's a proposal," GE's general counsel, Brackett Denniston, said in an interview last week. "We're opposed to it. The financial crisis had nothing to do with the fact that some institutions, many institutions, had banking and nonbanking activities."
However, GE supports the administration's calls for a broad regulator to monitor systemic risk, he said.
The proposal, unveiled last week, would expand federal oversight to "large, interconnected" companies to prevent any failure of such companies from threatening the entire financial system. Though the proposal did not name GE, observers have said the changes would force GE Capital to become a bank holding company and separate itself from its parent company.
"If the proposal was enacted under the current form, we believe GE could be forced to divest its ownership in GE Capital," said Adam Steer, an analyst at CreditSights Inc.