Article: Pros, Cons of Unplugging GE Capital from Its Parent.(Cards)(General Electric Capital Corp.)

Byline: Harry Terris

Second Of Three Parts

General Electric Co. may not be forced to sever GE Capital, but the prospect of much tougher supervision of the latter could push the conglomerate away from financial services.

Under the Treasury Department's revised plan for regulatory reform, GE's entire $658 billion-asset finance arm would become part of the Federal Reserve Board's watch. That would be a big change from the relatively light touch that comes with oversight of GE Capital's $18 billion-asset thrift and $11 billion-asset industrial bank, both in Utah.

"Heightened prudential standards," like stricter capital and liquidity ...

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