Navigating the crisis: FCIC hears GE Capital’s views

Underscoring the safety and soundness of GE’s business model through the worst economic downturn in decades, GE Vice Chairman and GE Capital Chairman and CEO Michael Neal and Deputy Treasurer Mark Barber appeared today before the Financial Crisis Inquiry Commission (FCIC). Their testimony outlined how GE Capital operates, provided details on its funding operations and offered insight into how the company navigated through the financial crisis.

A closer look: The commission, which was formed by Congress, just concluded two days of hearings.

Neal’s testimony before the bi-partisan commission reviewing events surrounding the financial crisis explained how GE Capital supports main street businesses, communities and the U.S. economy by extending straightforward commercial loans and capital to largely middle-market customers and consumers. In 2009 alone, GE provided $74 billion of credit to consumers and $72 billion to commercial borrowers in areas such as manufacturing, healthcare, technology equipment, aviation, transportation and consumer financing. GE Capital underwrites loans to hold on its books, he said, and it does not trade securities or originate exotic securities like collateralized debt obligations and structured investment vehicles that some believe contributed to the financial crisis.

Even in the depths of the crisis, GE Capital extended $183 billion to U.S. consumers and $208 billion to U.S. companies, he said. (Read Neal’s written testimony and see the FCIC video). Neal underscored that GE Capital is supervised by the Office of Thrift Supervision as a savings and loan holding company, by the New York State Banking Department, and by bank regulators all over the world in countries where we do business as he addressed the suggestion that GE Capital operations constitute “shadow banking.”

Barber’s testimony focused on GE Capital’s funding programs. He testified that during the crisis, in September 2008, GE Capital continued to see strong demand for its commercial paper. (Click here to view a chart showing GE Capital’s volume of commercial paper activity in September 2008 during the financial crisis.) Barber also discussed GE Capital’s participation in TLGP and the Commercial Funding Facility.

* Read Barber’s testimony.
* Find other videos, documents and the hearing’s Q&A on the FCIC’s website
* Learn more about GE Capital on GE Reports
* Visit GE Capital’s website