Goldman Sachs 2009 Annual Report Download - page 82

Deposits. As of December2009, our bank depository
institution subsidiaries had $39.42billion in customer deposits,
including $9.30billion of certi cates of deposit and other time
deposits with a weighted average maturity of four years, and
$30.12billion of other deposits, substantially all of which were
from cash sweep programs. GSBank USA has access to funding
through the Federal Reserve Bank discount window. While we do
not rely on funding through the Federal Reserve Bank discount
window in our liquidity modeling and stress testing, we maintain
policies and procedures necessary to access this funding.
Government Facilities. As a bank holding company, we have
access to certain programs and facilities established on a
temporary basis by a number of U.S. regulatory agencies.
As of December2009, we had outstanding $20.76billion of
senior unsecured debt (comprised of $1.73billion of short-
term and $19.03billion of long-term) guaranteed by the FDIC
under the Temporary Liquidity Guarantee Program (TLGP),
all of which will mature on or prior to June15, 2012. We have
not issued long-term debt under the TLGP since March2009
and the program expired for new issuances with respect to the
 rm on October 31, 2009.
See “— Certain Risk Factors That May Affect Our
Businesses” above, and “Risk Factors” in PartI, Item 1A of
our Annual Report on Form10-K for a discussion of factors
that could impair our ability to access the capital markets.
Funding Policies. We seek to manage our assets and the maturity
pro le of our secured and unsecured funding base such that
we should be able to liquidate our assets prior to our liabilities
coming due, even in times of prolonged or severe liquidity stress.
In order to avoid reliance on asset sales (other than our Global
Core Excess), our goal is to ensure that we have suf cient
total capital (unsecured long-term borrowings plus total
shareholders’ equity) to fund our balance sheet for at least one
year. However, we recognize that orderly asset sales may be
prudent or necessary in a severe orpersistent liquidity crisis.
The target amount of our total capital is based on an internal
funding model which incorporates, among other things, the
following long-term  nancing requirements:
▪
the portion of trading assets that we believe could not
be funded on a secured basis inperiods of market stress,
assuming stressed loan values;
▪
goodwill and identi able intangible assets, property, leasehold
improvements and equipment, and other illiquid assets;
▪
derivative and other margin and collateral requirements;
▪ anticipated draws on our unfunded loan commitments; and
▪
capital or other forms of  nancing in our regulated subsidiaries
that are in excess of their long-term  nancing requirements.
Certain  nancial instruments may be more dif cult to fund
on a secured basis during times of market stress. Accordingly,
we focus on funding these assets with longer contractual
maturities to reduce re nancing risk inperiods of market
stress and generally hold higher levels of total capital for
these assets than more liquid types of  nancial instruments.
The following table sets forth our aggregate holdings in these
categories of  nancial instruments:
As of
December November
(inmillions) 2009 2008
Mortgage and other asset-backed
loans and securities $14,277 $22,393
Bank loans and bridge loans (1) 19,345 21,839
Emerging market debt securities 2,957 2,827
High-yield and other debt obligations 12,028 9,998
Private equity investments and
real estate fund investments (2) 14,633 18,171
Emerging market equity securities 5,193 2,665
ICBC ordinary shares (3) 8,111 5,496
SMFG convertible preferred stock 933 1,135
Other restricted public equity securities 203 568
Other investments in funds (4) 2,911 2,714
(1) Includes funded commitments and inventory held in connection with our
origination and secondary trading activities.
(2) Includes interests in our merchant banking funds. Such amounts exclude
assets related to consolidated investment funds of $919million and
$1.16billion as of December2009 and November2008, respectively,
for which Goldman Sachs does not bear economic exposure.
(3) Includes interests of $5.13billion and $3.48billion as of December2009
and November2008, respectively, held by investment funds managed by
Goldman Sachs.
(4) Includes interests in other investment funds that we manage.
See Note3 to the consolidated  nancial statements for further
information regarding the  nancial instruments we hold.
Subsidiary Funding Policies. The majority of our unsecured
funding is raised by Group Inc. Group Inc. then lends
the necessary funds to its subsidiaries, some of which are
regulated, to meet their asset  nancing, liquidity and capital
requirements. In addition, Group Inc. provides its regulated
subsidiaries with the necessary capital to meet their regulatory
requirements. The bene ts of this approach to subsidiary
funding include enhanced control and greater  exibility to
meet the funding requirements of our subsidiaries. Funding is
also raised at the subsidiary level through a variety of products,
including secured funding, unsecured borrowings and deposits.
Goldman Sachs 2009 Annual Report
80
Management’s Discussion and Analysis