From the Goldman Sachs quarterly earnings statement --
As of June 30, 2013, total capital was $240.08 billion, consisting of $78.04 billion in total shareholders’ equity (common shareholders’ equity of $70.84 billion and preferred stock of $7.20 billion) and $162.04 billion in unsecured long-term borrowings.
It's quite a trick that banks can do, getting to count borrowed money as "capital" -- 2/3 of its total capital, in the case of the Vampire Squid. Presumably the wheeze is that since the money is unsecured and long-term, Goldman Sachs can use it to absorb losses.
But of course, when you're too big to fail and too connected to fail and you've got a hotline to the central bank, borrowing unsecured and long-term so that the regulators can check off the "well capitalized" box is probably pretty easy.
Nice work if you can get it.
As of June 30, 2013, total capital was $240.08 billion, consisting of $78.04 billion in total shareholders’ equity (common shareholders’ equity of $70.84 billion and preferred stock of $7.20 billion) and $162.04 billion in unsecured long-term borrowings.
It's quite a trick that banks can do, getting to count borrowed money as "capital" -- 2/3 of its total capital, in the case of the Vampire Squid. Presumably the wheeze is that since the money is unsecured and long-term, Goldman Sachs can use it to absorb losses.
But of course, when you're too big to fail and too connected to fail and you've got a hotline to the central bank, borrowing unsecured and long-term so that the regulators can check off the "well capitalized" box is probably pretty easy.
Nice work if you can get it.