FAIRFIELD, Conn. ( TheStreet) -- General Electric ( GE) shares were up more than 8% early Thursday, as House Financial Services Committee Chairman Barney Frank suggested the company may not have to spin off its GE Capital financial services unit. Echoing comments GE executives have made repeatedly, Frank (D., Mass) told Bloomberg that industrial companies having financial units did not cause the crisis. He also said the Federal Reserve was concerned about having to regulate industrial businesses. The Obama administration stated in a June white paper on regulatory reform that it wants to "re-affirm and strengthen" existing policies of separating banking and commerce. Frank's comments are the first by a prominent Democrat that might be interpreted as taking a softer stance on the issue. Following the Bloomberg report, Goldman Sachs analyst Terry Darling upgraded GE, arguing the chances of a breakup of the two units, which he estimates could cost shareholders $40 billion, have dropped to 25% from 50%. GE shares, which reached as high as $13.34, recently were adding 8.1% to $13.25. Deutsche Bank analyst Nigel Coe kept his hold rating on GE. The analyst cited the Bloomberg report, which paraphrased Frank as saying, "There are ways to allow companies like GE, which already exist as hybrids, to stay intact and have their finance arms regulated more closely." Coe noted, "a modest positive on the regulatory front but significant risks persist." While GE has the largest financial services unit of any industrial company, it is far from the only example of such a structure. Other industrial companies with financial units are Ford ( F), Caterpillar ( CAT) and Textron ( TXT). Shares of all three companies were up Thursday with the broader market.
-- Reported by Dan Freed in New York.