NEW YORK (TheStreet) -- General Electric Co. (GE) - Get Report stock is rising by 0.28% to $31.92 in late morning trading on Thursday, after the Fairfield, CT-based industrial company filed a request to the Financial Stability Oversight Council to remove the Systemically Important Financial Institution (SIFI) designation from GE Capital.
The designation is given to institutions that are "subject to stricter oversight from the Federal Reserve, including frequent stress tests and tight capital requirements" because these institutions are "viewed as a potential threat to the financial stability of the U.S.," TheStreet's Jim Cramer, portfolio manager of the charitable trust Action Alerts PLUS, and Jack Mohr, research director, explained in a post.
GE argues that GE Capital's risk profile has been significantly reduced and the unit is less integrated in the financial system. GE Capital has also been shrunk because of GE's plans to focus on its industrial assets.
"For GE, removal of federal oversight would mean more freedom, as higher capital requirements essentially limit a SIFI's financial flexibility, including its capacity to fund growth as well as capital allocation (i.e. buybacks and dividends)," Cramer and Mohr added.
(GE is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings with a free trial.)
Separately, General Electric has a "buy" rating and a letter grade of B at TheStreet Ratings because of the company's increase in net income and solid stock price performance.
You can view the full analysis from the report here: GE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.