Is GE getting out of commercial credit a sign of triumph for Dodd-Frank?

Rortybomb argued yes, Paul Krugman too, but I don’t see it.  A lot of the interest in the GE loan portfolio is coming from private equity groups such as Blackstone.  Is that asset redistribution a move toward greater safety for the system?  Maybe so, but it also might just be pushing the risk around into different corners, and possibly less transparent corners at that.  After all, the Coase theorem suggests the loans will go where they have the highest private value, and if you favor Dodd-Frank in the first place you ought to worry some of that private value may be an arbitrage against bailout options and ultimately the taxpayer.

In the longer run banks might pick up more of this business, in part because they can raise funds through deposits, at basically zero pecuniary cost.  Is centralizing more lending in the TBTF parts of our banking system an improvement, or not?  Again, you can argue this one either way.

And is this good or bad news?:

…the company [GE] has embarked on a massive recruitment drive to hire risk managers and financial modelling experts to help it prepare for annual stress tests by the Federal Reserve. (same FT link as above)

In a nutshell, not every attempt to raise the cost of non-bank commercial credit is a favorable development.

I do get that GE received guarantees/subsidies during the financial crisis, but so did a lot of other institutions.  I don’t see that anyone making the “GE’s new policy is a triumph for Dodd-Frank” argument is stating the comparative analysis correctly, much less doing that analysis and reaching a defensible conclusion.