Goldman Sachs 2012 Annual Report Download - page 65

Management’s Discussion and Analysis
The following is a description of the captions in the
table above.
Excess Liquidity and Cash. We maintain substantial
excess liquidity to meet a broad range of potential cash
outflows and collateral needs in the event of a stressed
environment. See “Liquidity Risk Management” below for
details on the composition and sizing of our excess liquidity
pool or “Global Core Excess” (GCE). In addition to our
excess liquidity, we maintain other operating cash balances,
primarily for use in specific currencies, entities, or
jurisdictions where we do not have immediate access to
parent company liquidity.
Secured Client Financing. We provide collateralized
financing for client positions, including margin loans
secured by client collateral, securities borrowed, and resale
agreements primarily collateralized by government
obligations. As a result of client activities, we are required
to segregate cash and securities to satisfy regulatory
requirements. Our secured client financing arrangements,
which are generally short-term, are accounted for at fair
value or at amounts that approximate fair value, and
include daily margin requirements to mitigate counterparty
credit risk.
Institutional Client Services. In Institutional Client
Services, we maintain inventory positions to facilitate
market-making in fixed income, equity, currency and
commodity products. Additionally, as part of client
market-making activities, we enter into resale or securities
borrowing arrangements to obtain securities which we can
use to cover transactions in which we or our clients have
sold securities that have not yet been purchased. The
receivables in Institutional Client Services primarily relate
to securities transactions.
Investing & Lending. In Investing & Lending, we make
investments and originate loans to provide financing to
clients. These investments and loans are typically
longer-term in nature. We make investments, directly and
indirectly through funds that we manage, in debt securities,
loans, public and private equity securities, real estate and
other investments.
Other Assets. Other assets are generally less liquid,
non-financial assets, including property, leasehold
improvements and equipment, goodwill and identifiable
intangible assets, income tax-related receivables,
equity-method investments, assets classified as held for sale
and miscellaneous receivables.
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