WASHINGTON (Reuters) - The Federal Reserve on Monday issued a final plan to apply new regulations to General Electric Capital Corp. , agreeing to apply its rules in two phases as the company sells off parts of its sprawling business.
GE's
GE announced in April that it was going to sell most of GE Capital and has said it would apply to have its so called non-bank "SIFI" designation removed.
The Fed on Monday said it was aware of the GE Capital divestiture plan but that because the plan was not complete, the central bank needed to move ahead with its oversight. In recognition of GE Capital's efforts to shrink, the Fed said it would roll out its set of standards in two phases.
The first phase, which goes into effect Jan. 1 of 2016, includes minimum capital and liquidity requirements, which the Fed says the company has already largely implemented.
The second phase, beginning Jan. 1 2018, includes a stricter set of standards such as capital planning and, one year later, stress tests.
"This approach will assure that GECC maintains important loss buffers for its continuing operations while it executes its divestiture strategy," Fed Governor Daniel Tarullo said. "If GECC is de-designated during the next two and a half years, the full set of enhanced prudential standards will never take effect."
The Fed meets at 1300 EDT (1700 GMT) for final approval of the plan.
(Reporting by Michael Flaherty; Editing by Andrea Ricci)
