Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Robert Cornell – Barclays Capital
Robert Cornell – Barclays Capital
You certainly gave us a good overview and I think a lot of people feel more comfortable with what you’re doing but you’re talking about a sharply smaller company going forward from 2009 relative to 2007, and maybe you could just back up a bit and talk about some of the factors that drove the decision for the smaller focus company, was it just the credit crisis or is it sort of a broader part of the GE vision?
Keith Sherin
Well certainly the credit crisis precipitates us relooking at where we are from a funding capability and a business model and I think if you step back from the environment that we’re in today Mike and Jeff and Kathy and the team basically what we said was look, let’s look at these capital markets and let’s look at what we can do to fund ourselves safely and securely.
And when you start with that, with what you think you can do with long-term debt, what you think you can do with CP, what you think you can do with alternative funding, you say to yourself, how do we remain a competitively advantaged FinCo in a very challenged capital market and plan conservatively based on that funding capability.
I think that’s where we started. I think at the same time you look and say where are we competitively advantaged from a business model and clearly the core that Bill Cary described to you, we feel great about those business positions, origination, our domain knowledge, our underwriting, our risk management, and so we said we’ve got a core here that we really want to competitively continue to fund and grow.
And then we always have to step back and say, what are some of the assets that maybe we are less competitively advantaged in and those are clearly the things that we put in the runoff restructure business.
So has the financial crisis precipitated a harder relook at the whole business model? I’d say yes. But we started with safe and secure from a funding perspective and then competitively advantaged from a business model perspective and that’s how we worked forward.
Mike Neal
I think everything you say I agree with Keith. I would say the other thing that we’ve done here is we’ve shifted the business given the liquidity market and the capital markets that we think going forward we’ve shifted the business more to an ROA focus from an ROE focus.
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