GE Sets Up $41 Billion in Credit Lines From Dozens of Banks

The transcript discusses the financial situations of PG&E and General Electric, focusing on their credit lines and market reactions. PG&E's case is highlighted due to its government backstop, while General Electric's credit risk and market impact are analyzed. The potential systemic risks of heavily indebted companies are also explored.

What is a potential consequence for banks if a large corporation like General Electric draws down its entire credit line?

• Banks may face liquidity issues.

• Banks will automatically increase interest rates.

• Banks will gain more profit.

• Banks will reduce their credit offerings.

How does a governmental backstop affect investor confidence in a company like PG&E?

• It decreases investor confidence.

• It has no effect on investor confidence.

• It increases investor confidence.

• It causes investors to sell their shares.

What is a common investor reaction when a company draws down its credit line under duress?

• Investors remain indifferent.

• Investors buy more shares.

• Investors demand higher dividends.

• Investors flee due to perceived desperation.

What financial instrument's perceived risk increased for General Electric, indicating market concern?

• Mutual funds

• Stock options

• Credit default swaps

• Corporate bonds

What systemic risk is highlighted by the financial situation of highly indebted companies like General Electric?

• Increased competition among banks

• Potential default impacting financial institutions

• Higher interest rates for consumers

• Reduced government intervention