General Electric Co.'s (NYSE:GE) finance arm GE Capital has enjoyed its eligibility for the Temporary Liquidity Guarantee Program, which allowed the unit to issue nearly $57 billion in debt backed by the U.S. government's Federal Deposit Insurance Corp.
But according to a Washington Post report, GE was initially ineligible to participate in the FDIC program when it was formed in October. The problem, the Post reports, is that GE's finance arm is not classified as a bank. With the help of an influential bank attorney, Sullivan & Cromwell LLP's H. Rodgin Cohen, GE was able to persuade the Treasury and qualify for the program, the Post reports.
But now the Treasury Department is looking to tighten standards for the program, which would basically disqualify GE. Already, GE has saved billions of dollars from raising money for their operations at lower interest rates thanks to the TLGP.
"This was crisis management on steroids. A lot was made up on the fly," a source told the Post. - Gerald Magpily
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Do we understand yet why financial regulation is such a mess in this country?
If not, this should clear that little issue up perfectly. If it does not, we deserve everything we get and then some.