Scott Olson/Getty Images
Industryweek 10615 Ge 2

Takeover of GE Capital Online Unit by Goldman Approved

March 21, 2016
Critics of the deal had said it would simply enlarge a bank already labeled systemically important, or "too big to fail."

The Federal Reserve approved on March 21 Goldman Sachs's takeover of the online deposit platform of GE Capital, rejecting worries it would reduce competition and make Goldman even more powerful.

Approval of the deal announced last August will bring Goldman Sachs Bank $17 billion in deposits, from GE Capital Bank's total $18.2 billion in deposits.

It will also bring the Wall Street giant the technology to manage the online deposit-taking platform, currently run out of GE Capital Bank's single office in Holladay, Utah.

Critics of the deal had said it would simply enlarge a bank already labeled systemically important, or "too big to fail."

Others said it would reduce competition in the U.S. banking industry.

But the Fed said the addition of the large deposit base will strengthen Goldman Sachs Bank, which currently reports $78.1 billion in deposits against assets of $860 billion.

"As a result, the proposal would immediately improve the stability of GS Bank's funding profile by diversifying sources of funding and increasing stable funding," the Fed said.

"This should enhance financial stability."

In addition, with the two banks not competing directly in any market, the Fed and the Department of Justice, which governs antitrust matters, said the deal "would not likely have a significantly adverse effect on competition in any relevant banking market."

The deal is a result of industrial giant General Electric's effort announced last year to sell off most of its $200 billion GE Capital finance arm.

Copyright Agence France-Presse, 2016

Popular Sponsored Recommendations

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

Discrete and Process Manufacturing 2024 Trends and Outlook for North America

Oct. 29, 2023
Manufacturers are reaping the benefits of automation and cloud-based solutions. Discover what is driving today's industry trends and how they can shape your growth priorities ...

7 Crucial Steps to Improve Your OT Security

Oct. 23, 2023
Enhance OT security in manufacturing and production. Uncover the crucial steps to safeguard your operational technology. Protect against evolving threats and bridge the IT-OT ...

Machine Learning and Predictive Analytics Guidebook for Engineers

Sept. 27, 2023
Leverage Domain Expertise to Drive Optimization – Without Needing a Data Scientist.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!