GE Shares Sink as Traders Fear Obama's New Regulations Could Smother GE Capital
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Shares of General Electric (NYSE: GE) are falling this morning following the unveiling of the Obama administration's proposed regulatory overhaul yesterday. As the WSJ highlights, the regulatory changes could have an even more smothering effect on GE Capital than most other firms as, due to its broad reach and hundreds of billions in assets, it would most likely be classified as being "systemically important".
As the proposal currently stands, regulators would require that the parent company, as well as other subsidiaries, of any systemically important firm be governed similarly. As it is very unlikely that GE would accept restrictions on its industrial businesses, for example, GE Capital could possibly be split-off from General Electric.
After opening just slightly below yesterday's close, shares of GE shot straight down, falling as much as 6%. The stock has now rebounded slightly, and most recently traded at $11.85, down 3.3%. Notably, GE shares have fallen more than 12% during this week alone.
As the proposal currently stands, regulators would require that the parent company, as well as other subsidiaries, of any systemically important firm be governed similarly. As it is very unlikely that GE would accept restrictions on its industrial businesses, for example, GE Capital could possibly be split-off from General Electric.
After opening just slightly below yesterday's close, shares of GE shot straight down, falling as much as 6%. The stock has now rebounded slightly, and most recently traded at $11.85, down 3.3%. Notably, GE shares have fallen more than 12% during this week alone.
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