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AIG, GE Capital face U.S. oversight

AFP-JIJI

The U.S. Treasury on Tuesday designated insurer American International Group and lender General Electric Capital as “systemically important” institutions, requiring tougher oversight because they are large enough to damage the entire financial system if they founder.

The two — both propped up against collapse in the 2008 crisis by the government — are the first nonbank financial firms to be labeled “too-big-to-fail.”

It means they will have to meet higher capital standards and undergo stress tests to see how they hold up in the conditions that battered the economy in the crisis.