As the Obama administration begins to unveil sweeping reform of financial regulation, financial groups will need to adapt to a new playing field. For the banking industry -- already one of the most highly regulated sectors in the economy -- the change is essentially one of degree. For a few non-bank financials, the change amounts to a wholesale change of regime. The most prominent of these is GE Capital -- the lending arm of General Electric (NYSE: GE).

Look out, parent!
GE Capital was part of the "shadow banking system"; it's quite normal that an institution that poses a systemic risk should face increased scrutiny post-crisis. However, new rules could mean regulatory oversight that encompasses the parent economy, with limits on its non-financial activities.

Although GE Capital hasn't been specifically named as a "systemically important institution," at nearly $613 billion in assets, its balance sheet dwarfs that of all but a handful of U.S. banking groups. Despite what looks like a decent equity cushion (see table below), its size poses an obvious risk.

Bank

Tangible Common Equity to Tangible Assets Ratio

GE Capital

6.5%

Goldman Sachs (NYSE: GS)

4.6%

Morgan Stanley (NYSE: MS)

4.3%

U.S. Bancorp (NYSE: USB)

3.7%

Wells Fargo (NYSE: WFC)

3.3% Continued...