For GE (NYSE: GE), the credit crisis part of the recession may not be over. Moody’s reports it could downgrade the rating of the conglomerate and part of its financial services operations–General Electric Capital Corporation–from Aa2 . The capital markets are not strong enough, Moody’s reasons, to avoid the risk of events that might severely damage the GE financial division balance sheets. Moody’s said in its note about that matter that
The review is based on Moody’s view that the risk profile of market-funded financial institutions, including GECC, is higher than previously reflected in their ratings. With a large and recurring need for wholesale funding to support its operations, GECC is inherently vulnerable to fluctuations in investor confidence relating to the firm’s creditworthiness and to funding conditions in the market generally.
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