Goldman Sachs 2013 Annual Report Download - page 66

Management’s Discussion and Analysis
Deposits. As part of our efforts to diversify our funding
base, deposits have become a more meaningful share of our
funding activities mainly through GS Bank USA and
Goldman Sachs International Bank (GSIB). The table below
presents the type and sources of our deposits.
As of December 2013
Type of Deposit
in millions Savings and Demand 1Time 2
Private bank deposits 3$30,475 $ 212
Certificates of deposit — 19,709
Deposit sweep programs 415,511 —
Institutional 33 4,867
Total 5$46,019 $24,788
1. Represents deposits with no stated maturity.
2. Weighted average maturity of approximately three years.
3. Substantially all were from overnight deposit sweep programs related to
private wealth management clients.
4. Represents long-term contractual agreements with several U.S. broker-
dealers who sweep client cash to FDIC-insured deposits.
5. Deposits insured by the FDIC as of December 2013 were approximately
$41.22 billion.
Unsecured Short-Term Borrowings. A significant
portion of our short-term borrowings was originally long-
term debt that is scheduled to mature within one year of the
reporting date. We use short-term borrowings to finance
liquid assets and for other cash management purposes. We
issue hybrid financial instruments, commercial paper and
promissory notes.
As of December 2013, our unsecured short-term
borrowings, including the current portion of unsecured
long-term borrowings, were $44.69 billion. See Note 15 to
the consolidated financial statements for further
information about our unsecured short-term borrowings.
Equity Capital
Capital adequacy is of critical importance to us. Our
objective is to be conservatively capitalized in terms of the
amount and composition of our equity base, both relative
to our risk exposures and compared to external
requirements and benchmarks. Accordingly, we have in
place a comprehensive capital management policy that
provides a framework and set of guidelines to assist us in
determining the level and composition of capital that we
target and maintain.
We determine the appropriate level and composition of our
equity capital by considering multiple factors including our
current and future consolidated regulatory capital
requirements, the results of our capital planning and stress
testing process and other factors such as rating agency
guidelines, subsidiary capital requirements, the business
environment, conditions in the financial markets, and
assessments of potential future losses due to adverse
changes in our business and market environments. Our
capital planning and stress testing process incorporates our
internally designed stress tests and those required under
CCAR and DFAST, and is also designed to identify and
measure material risks associated with our business
activities, including market risk, credit risk and operational
risk. We project sources and uses of capital given a range of
business environments, including stressed conditions. In
addition, as part of our comprehensive capital management
policy, we maintain a contingency capital plan that
provides a framework for analyzing and responding to an
actual or perceived capital shortfall.
As required by the Federal Reserve Board’s annual CCAR
guidelines, U.S. bank holding companies with total
consolidated assets of $50 billion or greater submit capital
plans for review by the Federal Reserve Board. The purpose
of the Federal Reserve Board’s review is to ensure that these
institutions have a robust, forward-looking capital
planning process that accounts for their unique risks and
that permits continued operations during times of economic
and financial stress.
64 Goldman Sachs 2013 Annual Report