The Goldman Sachs Group, Inc.

Annual Report2021

(from left to right)
Denis Coleman
Chief Financial Officer
David Solomon
Chairman andChief Executive Officer
John Waldron
President and Chief
Operating Officer

Fellow Shareholders:
There’s no question 2021 was an extraordinary year. It was challenging foreveryone — our clients, our people, our communities. But even in an incredibly
dynamic market environment, our people came together, we stayed true to ourstrategy, we put our clients first and though we still have a lot of work to do,
I’m proud of the fact that we delivered exceptional results to our shareholders.
Net revenues were $59.34 billion, net earnings were $21.64 billion and diluted earnings per common share was$59.45 — all records. Return on average common shareholders’ equity (ROE) was 23.0 percent, the highest since 2007,
and return on average tangible common shareholders’ equity (ROTE)1 was 24.3 percent.
It’s true the surge in capital markets activity was a big tailwind. The economy continued to recover from the short but
severe recession that marked the pandemic’s early days, and the robust growth that followed put enormous pressure
on supply chains, leading to levels of inflation not seen in decades. By year end, rate hikes were widely expected andmarkets entered a new period of uncertainty.
We don’t expect 2022 to look like 2021, especially as monetary policy tightens and fiscal policy becomes lesssupportive. But our confidence is as strong as it’s ever been that our strategy is working and that we can help ourclients navigate whatever the future holds.
As we move into 2022, I want to thank the people of Goldman Sachs. Their hard work, dedication, creativity andresilience continue to drive our success. Everywhere I go, when I meet with clients, they talk about the caliber andcommitment of our people. As many of our teams have returned to our offices around the world, we have had a chance
to reconnect and rediscover what makes Goldman Sachs such an extraordinary firm — in particular our exceptional
talent and our collaborative culture.

Goldman Sachs 2021 Annual Report1Letter to Shareholders

Progress is by no means a straight line, and we are staying
nimble as we continue to bring our people together as
much as possible. But we believe it’s important that thenext generation of Goldman Sachs colleagues — manyof whom are early in their careers — experience ourapprenticeship culture firsthand as we work together
to serve our clients.

“Unlocking the power of ourfranchise for our clients is not
only driving growth in our corebusinesses, but also allowing
new initiatives to scale…”

Building on the enormous progress we have made, I lookforward to all that we will accomplish together in theyear ahead. It is a great privilege to lead this remarkableorganization, and I couldn’t be more grateful to ourleadership team: our president and chief operating officer,
John Waldron; our former chief financial officer (CFO),
Stephen Scherr; our new CFO, Denis Coleman; and ourentire Management Committee.

David Solomon

Unlocking the power of our franchise for our clients is
not only driving growth in our core businesses, but also
allowing new initiatives to scale and in the years ahead,
we will continue to drive returns for our shareholders.

Financial Performance
In 2021, all four of our business segments saw revenue
growth year over year. Investment Banking generated
record net revenues of $14.88 billion and ranked #1 inworldwide announced and completed M&A, equity andequity-related offerings, common stock offerings and IPOs.2
Global Markets net revenues of $22.08 billion were thehighest in 12 years. Asset Management generated record
net revenues of $14.92 billion; with $2.5 trillion in firmwide
assets under supervision (AUS), we are one of the largest

Our Strategy to Produce Higher,
More Consistent Returns
1. Grow and Strengthen Existing Businesses
2. Diversify Our Products and Services
3. Operate More Efficiently

2Goldman Sachs 2021 Annual Report

active asset managers in the world. And Consumer &Wealth Management generated record net revenues of$7.47 billion, with over $1 trillion in total client assets.3
We believe book-value growth underpins the long-termvalue of any large, diversified financial institution and, inlast year’s somewhat unique operating environment, wewere able to grow our book value per common share by
20.4 percent to $284.39. And though some of our businesses
are more cyclical than others, we believe we can deliver
returns for our shareholders in almost any environment.

Our Strategy
In January 2020, we laid out our three-part strategic plan:
We were going to 1) grow and strengthen our existing
businesses; 2) diversify our products and services; and3) operate our firm more efficiently, all in an effort toproduce higher, more consistent returns. And though themarket environment since then has looked nothing likewhat we expected, we’ve done very well: Today, we’re
tracking more than 30 key performance indicators andwe believe we will meet or exceed 95 percent of them.
Key to our success has been a renewed focus on clients.
Through our One Goldman Sachs initiative, we areunlocking the power of our franchise by providing morecomprehensive and integrated service while also using
our network of clients to support our growth. For instance,over 90 percent of the clients on our Transaction banking
platform already had relationships with the firm. Our
progress confirms one of our core beliefs: that if you
really take care of your clients, if you invest in thoserelationships and if you build trust over a long periodof time, good things will happen.

Confident in our strategy, we recently unveiled an updated
set of financial targets. In the medium term,4 we believe
we can achieve an ROE of 14–16 percent and an ROTE
of 15–17 percent. We also reaffirmed our target efficiency
ratio of approximately 60 percent. In addition, we
announced that our target is to maintain our Common
Equity Tier 1 capital ratio equal to the regulatory
requirements plus a buffer of 50 to 100 basis points.
In addition to our firmwide targets, we unveiled an
updated set of business-level targets tied to our growthstrategy. Our new targets are $350 billion in organic,
traditional, long-term fee-based AUS net inflows overthe period from 2020 to 2024;5 $225 billion in grossalternatives fundraising over that same period; morethan $10 billion in firmwide management and other feesin 2024, including more than $2 billion from alternative
AUS; approximately $750 million in net revenues inTransaction banking in 2024; and over $4 billion in net
revenues in Consumer banking in 2024.

Segment Performance
Our four segments create a very powerful ecosystem,
and in 2021 they continued to grow.

Investment Banking
We’ve been #1 in global completed M&A for 22 of thepast 23 years and, in 2021, we were once again the advisorof choice. Net revenues were 58 percent higher than in
2020, driven by record net revenues in both Financial
advisory and Underwriting. Corporate lending net revenues
were significantly higher as well. In the past two years,
we’ve grown our wallet share by approximately 350 basis

points6 and we still see ample room for growth: Our
backlog was already high, but during 2021, it grew evenmore, putting us in a strong position for 2022.

Global Markets
Although market volatility declined in 2021, our clients
continued to rely on us for risk management, financial
intermediation and, increasingly, financing. Net revenues
grew by 4 percent to $22.08 billion. In Fixed Income,Currency and Commodities (FICC), net revenues declined,
but in Equities they grew by 20 percent. Since 2019, we’ve
grown wallet share by approximately 250 basis points.7
We’re in the top 3 with 72 of the 100 top institutional clients,
up from 51 just two years ago.8 We also ended the year withrecord average balances in our prime services business.

Asset Management
Net revenues grew by 87 percent, fueled by significantly
higher net revenues in Equity investments and Lending
and debt investments. Incentive fees rose, and Management
and other fees were a record, reflecting higher average
AUS. Growing these durable fees is an area of strategic
focus. And in August 2021, we announced that we would
acquire leading European asset manager NN Investment
Partners (NNIP) in early 2022. NNIP’s world-class ESG
capabilities and strong footprint in Europe will help
us further strengthen what is already one of the leading
asset management businesses in the world.

Consumer & Wealth Management
We continue to empower our millions of clients andcustomers around the world to reach their financial goals.
In 2021, net revenues grew by 25 percent to $7.47 billion.
Net revenues in Wealth Management grew by 25 percent

Medium-Term4 Firmwide Targets

Return on Equity

Return on Tangible Equity

Efficiency Ratio

14-16%

15-17%~60%
Goldman Sachs 2021 Annual Report3Letter to Shareholders

to a record $5.98 billion, fueled by higher average AUS,
increased client demand for alternative investments andsignificantly higher net revenues in Private banking andlending. In Consumer banking, net revenues grew by
23 percent to a record $1.49 billion, reflecting higher
credit card and deposit balances.

Growth Initiatives
In 2021, we made good progress on our growth initiatives.
In many instances, we met our medium-term goals aheadof schedule.

Transaction Banking
I hear from clients constantly that our innovative cloudbased Transaction banking platform is a differentiator.
We expanded to the U.K. in June 2021 and, today, we
have approximately 350 corporate clients. To extend theplatform’s reach, we’ve formed partnerships with
American Express, Fiserv, Stripe and Visa; and less than
two years in, we have already surpassed our previous
five-year-plus target of $50 billion in deposits. Now ourtarget for 2024 is to exceed $100 billion in deposits.
Our progress has reinforced our confidence that we canserve this very large addressable market, and we believe
it will be accretive to our ROE at scale.

Alternatives
Today, we are one of the top 5 alternative asset managers
in the world.9 In 2021, we raised $67 billion in third-party
capital across a diverse array of asset classes, including
private equity, private credit, growth equity and realestate. That brings us to a total of $107 billion, over twothirds of our previous five-year goal of $150 billion. As aresult, we have set a new target for 2024 of $225 billion
in gross alternatives fundraising. We’ve also madesignificant progress in harvesting our on-balance equity
investments over the past two years, with roughly$12 billion in net dispositions since year-end 2019.

Wealth Management
We deliver a world-class, tailored wealth management
offering to individuals, families, family offices andnonprofit institutions. In 2021, we had strong long-term
fee-based AUS net inflows and continued to expand
our global footprint. Our Wealth Management businesscomprises our premier Private Wealth Management

4

Goldman Sachs 2021 Annual Reportbusiness and our Personal Financial Management Group,
which includes Ayco and Personal Financial Management(previously United Capital). Through Ayco we provide
a wide variety of workplace solutions for 475 companies
to a broad set of our corporate clients’ employees,
personalized planning and advisory services for senior
executives, as well as full-service, bespoke wealthmanagement solutions for the C-suite.

Digital Consumer Banking
This year, we celebrated the five-year anniversary of ourdigital consumer banking platform, Marcus by Goldman
Sachs, and in that time, we’ve made enormous progress.
Our Consumer business has grown to serve more than
10 million customers and $110 billion in deposits, and it
is putting our customers at the center of everything we do,signified by winning several significant industry awards
and recognitions from J.D. Power, Which? Awards and more.
In September 2021, we announced an agreement toacquire GreenSky, the largest fintech platform for home
improvement consumer loan originations, whose growing
network of over 10,000 merchants will allow us to meet
more customers where they transact. We launched criticalproduct releases and features in 2021, including the
Marcus app on the iOS app store in the U.K. and Apple Card
Family Plan, and we launched the My GM Rewards Card inJanuary 2022. We also look forward to launching our digital
checking product in 2022, which will allow us to become
the primary bank for our customers.

Operating More Efficiently
In 2021, operating expenses were $31.94 billion,
10 percent higher than in 2020, primarily because we
increased our people’s compensation to reward their
exceptional performance. While compensation andbenefits expenses were up by 33 percent, our 2021
compensation ratio net of provision for credit losses
declined by 210 basis points from the prior year. It’s
important to note that when this firm went public in
1999, this ratio was over 50 percent. Since then, it has
decreased by more than 20 percentage points. However,
it is not as relevant a metric as it was before, as we areaiming for a 60 percent efficiency ratio target, and we’remanaging both our compensation and non-compensation
expenses fluidly.

We are a pay-for-performance culture; we reward ourpeople who drive our growth. But we have a shareholderaligned compensation framework that relies heavily onequity awards to incentivize long-term value creation,and that compensation can be adjusted when performance
is not as robust.
Since January 2020, we have achieved approximately$1 billion of our planned $1.3 billion in annual runrate expense efficiencies, and we expect to achieve therest later this year. We have a flexible cost structurethat enables us to make investments and support returns,
including disciplined expense management, a focus
on platforms and digitization, and a priority list ofinvestment spending.

Technology
This year showed how important engineering andtechnology will be to the future of Goldman Sachs.
In 2021, we expanded our fully cloud-based digitalbusinesses and features, including Apple Card Family Plan,
My GM Rewards Card and Transaction banking. We also
created a series of foundational cloud-based Developer
platforms on which our businesses and our clients caneasily build new applications. One of our most exciting
announcements came in November, when we launched
Financial Cloud Data at AWS re:Invent. This platform willoffer GS Data and Analytics tools in the cloud to help
developers build data-driven applications. And to support
all these new offerings, we continue to strengthen theteam by recruiting world-class engineering talent.

Our People and Our Culture
Goldman Sachs has long been known for the qualityof its people, and our exceptional results in 2021 madeclear just how differentiated they are. We have anabundance of talent, no doubt, but beyond that, we also
have a distinctly collaborative culture, which we haveworked hard to preserve over the course of the pandemic.
We have welcomed thousands of new people to our firmin the past few years, and it was important to us thatthey experience firsthand what it’s like to build a career atGoldman Sachs. They are at a moment in their careerswhen learning from their team members and developing
a network are crucial to their professional growth. And

working together in person makes it far easier for us topass on our core values of partnership, excellence, client
service and integrity.
Our people’s health and safety are our top priority,
and while we are adapting our plans to the specific needsof each office location, we continue to make progressin bringing our people back together as much as safely
possible. We will always give our people the flexibility
they need to manage their lives, but throughout 2021,
our experience showed that we are stronger when we’retogether, and protecting and enhancing our culture
will remain a focus for us as we enter 2022.

Sustainability
In 2021, sustainability continued to gain momentum
in the economy at large and, at Goldman Sachs, wemade further progress toward our goal of supporting$750 billion in sustainable financing, investing andadvisory activity by 2030. By year end, we had achieved
approximately $300 billion of our goal, including$167 billion in climate transition, $50 billion in inclusive
growth and the remainder in multiple themes, reflecting

Sustainable Finance Commitment
2030 Target

750B

$

commitment in financing,investing, and advisory activity
across two core pillars ofsustainable finance: climatetransition and inclusive growth$750B

Total Activity
as of 12/31/21~$300B

Goldman Sachs 2021 Annual Report5Letter to Shareholders

2021 Managing Director Class

After all, that’s what this is: a transition. We recognize theneed to build a more sustainable planet, and we’re doing
our part to help the world get there.

The most diverse class everDiversity and Inclusion

Women
Asian
Black
Hispanic/Latinx
LGBTQ+

30%
28%
5%
5%
3%

Global data based on self-identification information

our clients’ need for advice, capital and tools to support
their sustainability goals.
In March 2021, we announced a commitment to align our
financing activities with a net zero by 2050 pathway andunveiled interim business goals for three industries — oiland gas, power, and auto manufacturing — in our second
annual Task Force on Climate-related Financial Disclosures
report, Accelerating Transition. As a financial institution,
we believe the most meaningful role we can play in the
global climate transition is to drive decarbonization in thereal economy in partnership with our clients. This requires
growing our commercial capabilities and investing ininnovation. We also need reliable data, so we are working
with corporate partners to develop a free, open source
platform for climate-related data and to equip ourclients with new impact-measuring tools, like our Carbon
Portfolio Analytics in Marquee.
Still, we will not succeed in our effort unless the public
and private sector work together. Financial institutions
like ours need to direct capital to sustainable solutions
in emerging markets. That’s why we’ve partnered with
Bloomberg Philanthropies to launch a Climate Innovation
Fund that will encourage public and private investment
in clean energy projects across South and Southeast Asia.
We also need thoughtful public policy that strikes abalance between current energy capabilities and support
for new technology, as well as concrete measures thatwill accelerate a just and orderly transition.

6

Goldman Sachs 2021 Annual Report

Advancing diversity and inclusion is a top priority of mine.
In 2021, we continued to make progress promoting changeboth in the world at large and within the firm. In July
2021, we strengthened our board diversity requirement.
We will now underwrite IPOs for companies in Western
Europe and the U.S. only if they have at least two diverse
board members, at least one of whom must be a woman.
We also advanced progress on closing the opportunity gap
through our investment and philanthropic efforts, suchas the One Million Black Women initiative. In addition,
we made headway with our hiring goals at the analyst,
associate and vice president levels, and our 2021 managing
director class was the most diverse to date. That said, we
still have much work to do to build and retain a pipelineof diverse leadership, and we are hiring additional
diversity recruiters, as well as expanding our sponsorshipand development programs for diverse talent at the firm.

One Million Black WomenIn March 2021, we launched our newest initiative, One
Million Black Women, with the goal of investing $10 billion
to improve the lives of at least 1 million Black womenby 2030. Since then we’ve made investments and grants
laying the groundwork to directly impact the lives of over
98,000 women across the country. In direct response to
input received from nearly 20,000 Black women and girls,
we recently announced two new programs, OMBW Blackin Business, focused on Black women sole proprietors,

One Million Black Women•	Goal of investing $10 billion to improve the lives
of at least 1 million Black women by 2030
•	Held more than 50 listening sessions with nearly
20,000 Black women and girls across the U.S.
•	Launched new programs focused on Black
women sole proprietors and nonprofit leadersand OMBW Black Women Impact Grants, focused onaccess to multiyear funding for Black women nonprofit
leaders. In addition, for the first time we will be providing
capital for microloans through a new partnership with
Grameen. Vital to this work has been our exceptional
Advisory Council, which includes prominent Black leaders
like Roz Brewer, CEO of Walgreens Boots Alliance; Dr. Ruth
Simmons, the president of Prairie View A&M University;
Melanie Campbell, the president and CEO of the National
Coalition on Black Civic Participation; and former Secretaryof State Condoleezza Rice.

Goldman Sachs 10,000 Small Businesses
After having served more than 12,300 small businesses
in all 50 states through our education program, oursignature entrepreneurship initiative, Goldman Sachs
10,000 Small Businesses, continues to expand. In
September 2021, we launched 10,000 Small Businesses
Fellows, a pilot workforce program that pairs community
college students in four cities with small business alumsof the 10,000 Small Businesses education program forsemester-long, paid internships fully funded by theGoldman Sachs Foundation. In addition, our new advocacy
initiative, 10,000 Small Business Voices, spoke up for

graduates of our education program and worked with
the Biden administration to expand the COVID Economic
Injury Disaster Loan program and to reform the federal
procurement process.

Looking Forward
As we look forward to 2022, I want to thank our clientsfor putting their trust in us and our people for their
extraordinary commitment to the firm. After a record year,
we enter the next phase of our growth strategy in a strong
position. Our strategic plan is working, our renewed focus
on clients is strengthening our franchise and, as always,
our people are second to none. We are investing in the
future of Goldman Sachs and as a result, the firm willcontinue to evolve. We have a long-term track record of
producing value for shareholders, our leadership team is
focused on continuing that record and we are excitedby the opportunity ahead.

David Solomon
Chairman and Chief Executive Officer

Notes About the Letter to Shareholders
Forward-Looking Statements
This letter contains forward-looking statements, including statements about our financial targets, business initiatives, operating expense savings and sustainability goals.
You should read the cautionary notes on forward-looking statements in our Form 10-K for the period ended December 31, 2021.
Endnotes1	ROTE is calculated by dividing net earnings applicable to common shareholders by
average monthly tangible common shareholders’ equity. Tangible common shareholders’equity is calculated as total shareholders’ equity less preferred stock, goodwill andidentifiable intangible assets. Management believes that ROTE is meaningful because
it measures the performance of businesses consistently, whether they were acquiredor developed internally, and that tangible common shareholders’ equity is meaningful
because it is a measure that the firm and investors use to assess capital adequacy. ROTE
and tangible common shareholders’ equity are non-GAAP measures and may not becomparable to similar non-GAAP measures used by other companies. The table below
presents a reconciliation of average common shareholders’ equity to average tangible
common shareholders’ equity:$ in millions

Total shareholders’ equity
Preferred stock

Average for the Year
Ended December 31, 2021

$ 101,705(9,876)

Common shareholders’ equity

91,829Goodwill
Identifiable intangible assets(4,327)(536)

Tangible common shareholders’ equity

2 Source: Dealogic — January 1, 2021 through December 31, 2021.
3	Total client assets includes AUS, brokerage assets and consumer deposits.
4	“Medium-term” refers to an approximately three-year time horizon.
5 Traditional AUS represents fixed income and equity assets.
6	Data based on reported revenues for Advisory, Equity underwriting and Debt
underwriting. Total wallet includes GS, MS, JPM, BAC, C, DB, UBS, CS, BARC.
7	Data based on reported revenues for FICC and Equities. Total wallet includes GS,
MS, JPM, BAC, C, DB, UBS, CS, BARC.
8	Sources: Top 100 client list and rankings compiled by GS through Client Ranking/
Scorecard/Feedback and/or Coalition Greenwich 1H21 Institutional Client
Analytics ranking.
9 Data as of 4Q21. Peer data compiled from publicly available company filings.

$

86,966

Goldman Sachs 2021 Annual Report7Our Core Values and Business Principles

Our Core Values
We distilled our Business Principles into 4 core values that inform everything we do:Partnership

Client Service

Integrity

Excellence

Goldman Sachs Business Principles

Our clients’ interests always
come first.
Our experience shows that if weserve our clients well, our own successwill follow.
Our assets are our people,
capital and reputation.
If any of these is ever diminished, thelast is the most difficult to restore.
We are dedicated to complying fully
with the letter and spirit of the laws,
rules and ethical principles that govern
us. Our continued success depends upon
unswerving adherence to this standard.
Our goal is to provide superior
returns to our shareholders.
Profitability is critical to achieving
superior returns, building our capital,
and attracting and keeping our best
people. Significant employee stock
ownership aligns the interests of ouremployees and our shareholders.
We take great pride in theprofessional quality of our work.
We have an uncompromising
determination to achieve excellencein everything we undertake. Though
we may be involved in a wide variety
and heavy volume of activity, we
would, if it came to a choice, rather
be best than biggest.
We stress creativity andimagination in everything we do.
While recognizing that the old way
may still be the best way, we constantly
strive to find a better solution to aclient’s problems. We pride ourselves
on having pioneered many of thepractices and techniques that havebecome standard in the industry.

8

Goldman Sachs 2021 Annual Report

We make an unusual effort toidentify and recruit the very best
person for every job.
Although our activities are measured
in billions of dollars, we select ourpeople one by one. In a service business,
we know that without the best people,
we cannot be the best firm.
We offer our people the opportunity
to move ahead more rapidly than ispossible at most other places.
Advancement depends on merit andwe have yet to find the limits to the
responsibility our best people are able
to assume. For us to be successful,our people must reflect the diversityof the communities and cultures inwhich we operate. That means we must
attract, retain and motivate people
from many backgrounds andperspectives. Being diverse is not
optional; it is what we must be.
We stress teamwork
in everything we do.
While individual creativity is always
encouraged, we have found that teameffort often produces the best results.
We have no room for those who put
their personal interests ahead of theinterests of the firm and its clients.
The dedication of our people tothe firm and the intense effort theygive their jobs are greater than one
finds in most other organizations.
We think that this is an importantpart of our success.

We consider our size an asset
that we try hard to preserve.
We want to be big enough to undertakethe largest project that any of ourclients could contemplate, yet smallenough to maintain the loyalty, theintimacy and the esprit de corps that
we all treasure and that contribute
greatly to our success.
We constantly strive to anticipate
the rapidly changing needs of ourclients and to develop new services
to meet those needs.
We know that the world of finance will
not stand still and that complacency
can lead to extinction.
We regularly receive confidential
information as part of our normal
client relationships.
To breach a confidence or to use
confidential information improperlyor carelessly would be unthinkable.
Our business is highly competitive,
and we aggressively seek toexpand our client relationships.
However, we must always be faircompetitors and must never denigrateother firms.
Integrity and honesty are at
the heart of our business.
We expect our people to maintain highethical standards in everything theydo, both in their work for the firm andin their personal lives.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021

Commission File Number: 001-14965

The Goldman Sachs Group, Inc.
(Exact name of registrant as specified in its charter)

Delaware13-4019460(State or other jurisdiction ofincorporation or organization)(I.R.S. Employer
Identification No.)

200 West Street, New York, N.Y.

10282

(Address of principal executive offices)(Zip Code)(212) 902-1000(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
SymbolExchangeon which
registered

Common stock, par value $.01 per share
Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating Rate Non-Cumulative Preferred Stock, Series A
Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating Rate Non-Cumulative Preferred Stock, Series C
Depositary Shares, Each Representing 1/1,000th Interest in a Share of Floating Rate Non-Cumulative Preferred Stock, Series D
Depositary Shares, Each Representing 1/1,000th Interest in a Share of 5.50% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series J
Depositary Shares, Each Representing 1/1,000th Interest in a Share of 6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K
5.793% Fixed-to-Floating Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs Capital II
Floating Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs Capital III
Medium-Term Notes, Series F, Callable Fixed and Floating Rate Notes due 2031 of GS Finance Corp.

GS
GS PrA
GS PrCGS PrD
GS PrJ
GS PrK
GS/43PE
GS/43PF
GS/31B

NYSE
NYSE
NYSE
NYSE
NYSE
NYSE
NYSE
NYSE
NYSE

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ‘ Yes È No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ‘ Yes È No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. È Yes ‘ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). È Yes ‘ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2of the Exchange Act.
Large accelerated filer È
Smaller reporting company ‘

Accelerated filer ‘

Non-accelerated filer ‘
Emerging growth company ‘

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ‘
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. È
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ‘ Yes È No
As of June 30, 2021, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was approximately $127.4 billion.
As of February 11, 2022, there were 337,922,970 shares of the registrant’s common stock outstanding.
Documents incorporated by reference: Portions of The Goldman Sachs Group, Inc.’s Proxy Statement for its 2022 Annual Meeting of Shareholders areincorporated by reference in the Annual Report on Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021

INDEX
Form 10-K Item Number

Page No.

Page No.

1

Item 7

Business

1

Management’s Discussion and Analysis of Financial Condition
and Results of Operations
58

Introduction

1

Introduction

58

Our Business Segments

1

Executive Overview

59

Investment Banking

1Business Environment

60

Global Markets

2

Critical Accounting Policies

60

4

Use of Estimates

63

4

Recent Accounting Developments

63PART I
Item 1

Asset Management
Consumer & Wealth Management
Business Continuity and Information Security

5

Human Capital Management

5

Sustainability

8Competition

9

Regulation

10

Information about our Executive Officers

25

Available Information

26

Forward-Looking Statements

26

Item 1A
Risk Factors

29

Item 1B
Unresolved Staff Comments

56

Item 2
Properties

56

Results of Operations

64

Balance Sheet and Funding Sources

79

Capital Management and Regulatory Capital

82

Regulatory and Other Matters

87

Off-Balance Sheet Arrangements

89

Risk Management

90

Overview and Structure of Risk Management

90

Liquidity Risk Management

96

Market Risk Management

102

Credit Risk Management

106

Operational Risk Management

114

Model Risk Management

116

Item 7A
Quantitative and Qualitative Disclosures About Market Risk 117

Item 3
Legal Proceedings

56

Item 4
Mine Safety Disclosures

56

PART II

57

Item 5Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
57

Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESINDEXPage No.
Item 8Financial Statements and Supplementary Data

117

Page No.
Supplemental Financial Information

223

Common Stock Performance

223

Statistical Disclosures

223

Management’s Report on Internal Control over Financial
Reporting117

Report of Independent Registered Public Accounting Firm

118

Consolidated Financial Statements

121

Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
227

Consolidated Statements of Earnings

121

Item 9A

Consolidated Statements of Comprehensive Income

121

Controls and Procedures

Consolidated Balance Sheets

122

Item 9B

Consolidated Statements of Changes in Shareholders’ Equity 123

Item 9Other Information

227
227

Consolidated Statements of Cash Flows124

Notes to Consolidated Financial Statements

125

Note 1. Description of Business

125

Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections

227

Note 2. Basis of Presentation

125

PART III

227

Note 3. Significant Accounting Policies

126

Item 10Note 4. Fair Value Measurements

131

Directors, Executive Officers and Corporate Governance

Note 5. Trading Assets and Liabilities

136

Item 11

Note 6. Trading Cash Instruments

137

Executive Compensation

Note 7. Derivatives and Hedging Activities

139

Note 8. Investments

149

Note 9. Loans

155

Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters

Note 10. Fair Value Option

164

Item 13

Note 11. Collateralized Agreements and Financings

169

Note 12. Other Assets

173

Certain Relationships and Related Transactions, and Director
Independence
228

Note 13. Deposits

175

Item 14

Note 14. Unsecured Borrowings

176

Principal Accountant Fees and Services

228

Note 15. Other Liabilities

179

PART IV

228

Note 16. Securitization Activities

180

Item 15

Note 17. Variable Interest Entities

182

Exhibit and Financial Statement Schedules

228

Note 18. Commitments, Contingencies and Guarantees

185

SIGNATURES

234

Note 19. Shareholders’ Equity

189

Note 20. Regulation and Capital Adequacy

192

Note 21. Earnings Per Common Share202

Note 22. Transactions with Affiliated Funds

202

Note 23. Interest Income and Interest Expense

203

Note 24. Income Taxes

203

Note 25. Business Segments

206

Note 26. Credit Concentrations

208

Note 27. Legal Proceedings

209

Note 28. Employee Benefit Plans

218

Note 29. Employee Incentive Plans

219

Note 30. Parent Company

221

Goldman Sachs 2021 Form 10-K

Item 9C

227
227

Item 12228

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESPART I
Item 1.

Business

Introduction
Goldman Sachs is a leading global financial institution thatdelivers a broad range of financial services acrossinvestment banking, securities, investment management
and consumer banking to a large and diversified client basethat includes corporations, financial institutions,
governments and individuals. Our purpose is to advancesustainable economic growth and financial opportunity.
Our goal, reflected in our One Goldman Sachs initiative, isto deliver the full range of our services and expertise tosupport our clients in a more accessible, comprehensive andefficient manner, across businesses and product areas.
When we use the terms “Goldman Sachs,” “we,” “us” and“our,” we mean The Goldman Sachs Group, Inc. (Group
Inc. or parent company), a Delaware corporation, and its
consolidated subsidiaries. When we use the term “oursubsidiaries,” we mean the consolidated subsidiaries ofGroup Inc. References to “this Form 10-K” are to our
Annual Report on Form 10-K for the year ended
December 31, 2021. All references to 2021, 2020 and 2019refer to our years ended, or the dates, as the context
requires, December 31, 2021, December 31, 2020 and
December 31, 2019, respectively.
Group Inc. is a bank holding company (BHC) and afinancial holding company (FHC) regulated by the Board ofGovernors of the Federal Reserve System (FRB). Our U.S.
depository institution subsidiary, Goldman Sachs Bank
USA (GS Bank USA), is a New York State-chartered bank.

Our Business Segments
We report our activities in four business segments:
Investment Banking, Global Markets, Asset Management,
and Consumer & Wealth Management. Investment
Banking generates revenues from financial advisory,
underwriting and corporate lending activities. Global
Markets consists of Fixed Income, Currency andCommodities (FICC) and Equities, and generates revenues
from intermediation and financing activities. AssetManagement generates revenues from management andother fees, incentive fees, equity investments, and lending
and debt investments. Consumer & Wealth Management
consists of Wealth management and Consumer banking,and generates revenues from management and other fees,
incentive fees, private banking and lending, and consumeroriented activities.

The chart below presents our four business segments andtheir revenue sources.
GLOBAL MARKETSASSET MANAGEMENTCONSUMER & WEALTH
MANAGEMENT

Financial advisory

FICC- FICC intermediation- FICC financing

Management and other fees

Wealth management- Management and other fees
- Incentive fees
- Private banking and lending

Underwriting- Equity underwriting- Debt underwriting

Equities- Equities intermediation- Equities financing

Incentive fees

Consumer banking

INVESTMENT BANKING

Corporate lending

Equity investments

Lending and debt investments

Investment Banking
Investment Banking serves public and private sector clientsaround the world. We provide financial advisory services,help companies raise capital to strengthen and grow theirbusinesses and provide financing to corporate clients. We
seek to develop and maintain long-term relationships with adiverse global group of institutional clients, including
corporations, governments, states and municipalities. Our
goal is to deliver to our institutional clients all of ourresources in a seamless fashion, with investment banking
serving as the main initial point of contact.
Investment Banking generates revenues from the following:‰ Financial advisory. We have been a leader for many
years in providing financial advisory services, including
strategic advisory assignments with respect to mergers
and acquisitions, divestitures, corporate defense activities,
restructurings and spin-offs. In particular, we help clients
execute large, complex transactions for which we provide
multiple services, including cross-border structuringexpertise. We also assist our clients in managing theirasset and liability exposures and their capital.
‰ Underwriting. We help companies raise capital to fundtheir businesses. As a financial intermediary, our job is tomatch the capital of our investing clients, who aim togrow the savings of millions of people, with the needs ofour public and private sector clients, who need financing
to generate growth, create jobs and deliver products andservices. Our underwriting activities include public
offerings and private placements, including local andcross-border transactions and acquisition financing, of awide range of securities and other financial instruments,
including loans. Underwriting consists of the following:

Goldman Sachs 2021 Form 10-K

1

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Equity underwriting. We underwrite common andpreferred stock and convertible and exchangeable
securities. We regularly receive mandates for large,
complex transactions and have held a leading position inworldwide public common stock offerings andworldwide initial public offerings for many years.
Debt underwriting. We underwrite and originate
various types of debt instruments, including investmentgrade and high-yield debt, bank and bridge loans,including in connection with acquisition financing, andemerging- and growth-market debt, which may be issued
by, among others, corporate, sovereign, municipal andagency issuers. In addition, we underwrite and originate
structured securities, which include mortgage-related
securities and other asset-backed securities.
‰ Corporate lending. We lend to corporate clients,
including through relationship lending, middle-market
lending and acquisition financing. The hedges related tothis lending and financing activity are reported as part ofour corporate lending activity.
We also provide transaction banking services, including
to certain of our corporate and financial institution
clients. Transaction banking revenues include net interest
income attributed to transaction banking deposits.
Global Markets
Global Markets serves our clients who buy and sellfinancial products, raise funding and manage risk. We do
this by acting as a market maker and offering market
expertise on a global basis. Global Markets makes markets
and facilitates client transactions in fixed income, equity,
currency and commodity products. In addition, we makemarkets in, and clear client transactions on, major stock,
options and futures exchanges worldwide.
As a market maker, we provide prices to clients globally
across thousands of products in all major asset classes andmarkets. At times, we take the other side of transactions
ourselves if a buyer or seller is not readily available, and atother times we connect our clients to other parties whowant to transact. Our willingness to make markets, commit
capital and take risk in a broad range of products is crucial
to our client relationships. Market makers provide liquidity
and play a critical role in price discovery, which contributes
to the overall efficiency of the capital markets. In
connection with our market-making activities, we maintain(i) market-making positions, typically for a short period oftime, in response to, or in anticipation of, client demand,and (ii) positions to actively manage our risk exposures thatarise from these market-making activities (collectively,
inventory).

2Goldman Sachs 2021 Form 10-K

Our clients are institutions that are primarily professional
market participants, including investment entities whose
ultimate clients include individual investors investing fortheir retirement, buying insurance or saving surplus cash.
We execute a high volume of transactions for our clients inlarge, highly liquid markets (such as markets for U.S.
Treasury securities, stocks and certain agency mortgage
pass-through securities). We also execute transactions forour clients in less liquid markets (such as mid-cap corporate
bonds, emerging market currencies and certain non-agency
mortgage-backed securities) for spreads and fees that are
generally somewhat larger than those charged in more
liquid markets. Additionally, we structure and executetransactions involving customized or tailor-made productsthat address our clients’ risk exposures, investment
objectives or other complex needs (such as a jet fuel hedge
for an airline), as well as derivative transactions related toclient advisory and underwriting activities.
Through our global sales force, we maintain relationships
with our clients, receiving orders and distributing
investment research, trading ideas, market information andanalysis. Much of this connectivity between us and ourclients is maintained on technology platforms, including
Marquee, and operates globally where markets are open fortrading. Marquee provides institutional investors withmarket intelligence, risk analytics, proprietary datasets andtrade execution across multiple asset classes.
Global Markets and our other businesses are supported by
our Global Investment Research division, which, as ofDecember 2021, provided fundamental research on
approximately 3,000 companies worldwide andapproximately 50 national economies, as well as onindustries, currencies and commodities.
Global Markets activities are organized by asset class andinclude both “cash” and “derivative” instruments. “Cash”
refers to trading the underlying instrument (such as a stock,bond or barrel of oil). “Derivative” refers to instrumentsthat derive their value from underlying asset prices, indices,
reference rates and other inputs, or a combination of thesefactors (such as an option, which is the right or obligation
to buy or sell a certain bond, stock or other asset on a
specified date in the future at a certain price, or an interest
rate swap, which is the agreement to convert a fixed rate ofinterest into a floating rate or vice versa).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Global Markets consists of FICC and Equities.
FICC. FICC generates revenues from intermediation andfinancing activities.
‰ FICC intermediation. Includes client execution activities
related to making markets in both cash and derivative
instruments, as detailed below.
Interest Rate Products. Government bonds (including
inflation-linked securities) across maturities, othergovernment-backed securities, and interest rate swaps,
options and other derivatives.
Credit Products. Investment-grade and high-yieldcorporate securities, credit derivatives, exchange-tradedfunds (ETFs), bank and bridge loans, municipal
securities, emerging market and distressed debt, and tradeclaims.
Mortgages. Commercial mortgage-related securities,
loans and derivatives, residential mortgage-related
securities, loans and derivatives (including U.S.
government agency-issued collateralized mortgage
obligations and other securities and loans), and otherasset-backed securities, loans and derivatives.
Currencies. Currency options, spot/forwards and otherderivatives on G-10 currencies and emerging-market
products.
Commodities. Commodity derivatives and, to a lesser
extent, physical commodities, involving crude oil andpetroleum products, natural gas, agricultural, base,precious and other metals, electricity, including
renewable power, environmental products and othercommodity products.
‰ FICC financing. Includes providing financing to ourclients through warehouse loans backed by mortgages(including residential and commercial mortgage loans),
corporate loans and consumer loans (including auto loans
and private student loans). We also provide financing toclients through structured credit, asset-backed lending,and through securities purchased under agreements toresell (resale agreements).
Equities. Equities generates revenues from intermediationand financing activities.
‰ Equities intermediation. We make markets in equity
securities and equity-related products, including ETFs,
convertible
securities,
options,
futuresandover-the-counter (OTC) derivative instruments. As aprincipal, we facilitate client transactions by providing
liquidity to our clients, including by transacting in large
blocks of stocks or derivatives, requiring the commitmentof our capital.

We also structure and make markets in derivatives on
indices, industry sectors, financial measures andindividual company stocks. We develop strategies andprovide information about portfolio hedging andrestructuring and asset allocation transactions for ourclients. We also work with our clients to create specially
tailored instruments to enable sophisticated investors toestablish or liquidate investment positions or undertake
hedging strategies. We are one of the leading participantsin the trading and development of equity derivative
instruments.
Our exchange-based market-making activities include
making markets in stocks and ETFs, futures and options
on major exchanges worldwide.
We generate commissions and fees from executing andclearing institutional client transactions on major stock,
options and futures exchanges worldwide, as well as
OTC transactions. We provide our clients with access to abroad spectrum of equity execution services, including
electronic “low-touch” access and more complex “hightouch” execution through both traditional and electronic
platforms, including Marquee.
‰ Equities financing. Includes prime brokerage and other
equities financing activities, including securities lending,margin lending and swaps.
We earn fees by providing clearing, settlement andcustody services globally. In addition, we provide ourhedge fund and other clients with a technology platform
and reporting that enables them to monitor their security
portfolios and manage risk exposures.
We provide services that principally involve borrowing
and lending securities to cover institutional clients’ shortsales and borrowing securities to cover our short sales andto make deliveries into the market. In addition, we are an
active participant in broker-to-broker securities lending
and third-party agency lending activities.
We provide financing to our clients for their securities
trading activities through margin loans that arecollateralized by securities, cash or other acceptable
collateral. We earn a spread equal to the difference
between the amount we pay for funds and the amount we
receive from our client.
We execute swap transactions to provide our clients with
exposure to securities and indices.

Goldman Sachs 2021 Form 10-K

3

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Asset Management
Asset Management provides investment services to help
clients preserve and grow their financial assets. We provide
these services to our institutional clients, as well as investors
who primarily access our products through a network of
third-party distributors around the world.
We manage client assets across a broad range of investment
strategies and asset classes, including equity, fixed income
and alternative investments. Alternative investments
primarily includes hedge funds, credit funds, private equity,
real estate, currencies, commodities and asset allocation
strategies. Our investment offerings include those managed
on a fiduciary basis by our portfolio managers, as well as
those managed by third-party managers. We offer ourinvestment solutions in a variety of structures, including
separately managed accounts, mutual funds, private
partnerships and other commingled vehicles.
We also provide customized investment advisory solutions
designed to address our clients’ investment needs. These
solutions begin with identifying clients’ objectives andcontinue through portfolio construction, ongoing asset
allocation and risk management and investment realization.
We draw from a variety of third-party managers, as well as
our proprietary offerings, to implement solutions forclients.
Asset Management generates revenues from the following:‰ Management and other fees. The majority of revenues
in management and other fees consists of asset-based feeson client assets that we manage. The fees that we charge
vary by asset class, distribution channel and the types ofservices provided, and are affected by investment
performance, as well as asset inflows and redemptions.
‰ Incentive fees. In certain circumstances, we also receive
incentive fees based on a percentage of a fund’s or aseparately managed account’s return, or when the return
exceeds a specified benchmark or other performancetargets. Such fees include overrides, which consist of theincreased share of the income and gains derived primarily
from our private equity and credit funds when the returnon a fund’s investments over the life of the fund exceeds
certain threshold returns.
‰ Equity investments. Our alternative investing activities
relate to public and private equity investments incorporate, real estate and infrastructure entities. We also
make investments through consolidated investment
entities, substantially all of which are engaged in realestate investment activities.
‰ Lending and debt investments. We invest in corporate
debt and provide financing for real estate and otherassets. These activities include investments in mezzanine
debt, senior debt and distressed debt securities.
4

Goldman Sachs 2021 Form 10-K

Consumer & Wealth Management
Consumer & Wealth Management helps clients achieve
their individual financial goals by providing a broad range
of wealth advisory and banking services, including financial
planning, investment management, deposit-taking andlending. Services are offered through our global network ofadvisors and via our digital platforms.
Wealth Management. Wealth management provides
tailored wealth advisory services to clients across the wealthspectrum. We operate globally serving individuals, families,
family offices, and foundations and endowments. Our
relationships are established directly or introduced throughcorporations that sponsor financial wellness programs fortheir employees.
We offer personalized financial planning inclusive of
income and liability management, compensation andbenefits analysis, trust and estate structuring, tax
optimization, philanthropic giving, and asset protection.
We also provide customized investment advisory solutions,and offer structuring and execution capabilities in security
and derivative products across all major global markets.
We leverage a broad, open-architecture investment
platform and our global execution capabilities to help
clients achieve their investment goals. In addition, we offer
clients a full range of private banking services, including avariety of deposit alternatives and loans that our clients use
to finance investments in both financial and nonfinancial
assets, bridge cash flow timing gaps or provide liquidity andflexibility for other needs.
Wealth management
following:

generates

revenues

from

the

‰ Management and other fees. Includes fees related to
managing assets, providing investing and wealth advisory
solutions, providing financial planning and counselingservices via Ayco Personal Financial Management, andexecuting brokerage transactions for wealth management
clients.
‰ Incentive fees. In certain circumstances, we also receive
incentive fees from wealth management clients based on apercentage of a fund’s return, or when the return exceeds
a specified benchmark or other performance targets. Suchfees include overrides, which consist of the increased
share of the income and gains derived primarily from ourprivate equity and credit funds when the return on afund’s investments over the life of the fund exceeds
certain threshold returns.
‰ Private banking and lending. Includes net interest
income allocated to deposit-taking and net interest
income earned on lending activities for wealthmanagement clients.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consumer Banking. Our Consumer banking businessissues unsecured loans, through our digital platform,
Marcus by Goldman Sachs (Marcus), and credit cards, tofinance the purchases of goods or services. We also accept
deposits (including savings and time deposits) throughMarcus, in GS Bank USA and Goldman Sachs International
Bank (GSIB). Additionally, we provide investing services
through Marcus Invest to U.S. customers.
Consumer banking revenues consist of net interest income
earned on unsecured loans issued to consumers throughMarcus and credit card lending activities, and net interest
income attributed to consumer deposits.

Business
Security

Continuity

andInformation

Business continuity and information security, including
cyber security, are high priorities for us. Their importancehas been highlighted by (i) the coronavirus (COVID-19)
pandemic and the work-from-home arrangements
implemented by companies worldwide in response,
including us, (ii) numerous highly publicized events inrecent years, including cyber attacks against financial
institutions, governmental agencies, large consumer-based
companies, software and information technology service
providers and other organizations, some of which haveresulted in the unauthorized access to or disclosure of
personal information and other sensitive or confidential
information, the theft and destruction of corporate
information and requests for ransom payments, and(iii) extreme weather events.

Our Business Continuity & Technology Resilience Program
has been developed to provide reasonable assurance ofbusiness continuity in the event of disruptions at our criticalfacilities or of our systems, and to comply with regulatory
requirements, including those of FINRA. Because we are a
BHC, our Business Continuity & Technology Resilience
Program is also subject to review by the FRB. The key
elements of the program are crisis management, business
continuity, technology resilience, business recovery,
assurance and verification, and process improvement. In
the area of information security, we have developed andimplemented a framework of principles, policies andtechnology designed to protect the information provided to
us by our clients and our own information from cyberattacks and other misappropriation, corruption or loss.
Safeguards are designed to maintain the confidentiality,
integrity and availability of information. For further
information about the Business Continuity Planning
strategy we have implemented in response to the
COVID-19 pandemic, see “Management’s Discussion andAnalysis of Financial Condition and Results ofOperations — Regulatory and Other Matters — Impact of
COVID-19 Pandemic” in Part II, Item 7 of this Form 10-K.

Human Capital Management
Our people are our greatest asset. We believe that a major
strength and principal reason for our success is the quality,
dedication, determination and collaboration of our people,
which enables us to serve our clients, generate long-termvalue for our shareholders and contribute to the broader
community. We invest heavily in developing andsupporting our people throughout their careers, and we
strive to maintain a work environment that fosters
professionalism, excellence, high standards of businessethics, diversity, teamwork and cooperation among our
employees worldwide.

Goldman Sachs 2021 Form 10-K

5

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESDiversity and Inclusion
The strength of our culture, our ability to execute ourstrategy, and our relationships with clients all depend on adiverse workforce and an inclusive work environment thatencourages a wide range of perspectives. We believe thatdiversity at all levels of our organization, from entry-level
analysts to senior management, as well as the Board of
Directors of Group Inc. (Board), which as ofDecember 2021, was approximately 62% diverse by race,
gender or sexual orientation, is essential to oursustainability. Our management team works closely with
our Global Inclusion and Diversity Committee to continue
to increase diversity of our global workforce at all levels. In
addition, we have global and regional Inclusion andDiversity Committees which promote an environment thatvalues different perspectives, challenges conventional
thinking and maximizes the potential of all our people.
We believe that increased diversity, including diversity ofexperience, gender identity, race, ethnicity, sexual
orientation, disability and veteran status, in addition to
being a social imperative, is vital to our commercial successthrough the creativity that it fosters. For this reason, we
have established a comprehensive action plan withaspirational diversity hiring goals which are set forth below
and are focused on cultivating an inclusive environment for
all our colleagues.
Diverse leadership is crucial to our long-term success and todriving innovation, and we have implemented andexpanded outreach and career advancement programs forrising diverse executive talent. For example, we are focusedon providing diverse vice presidents the necessary coaching,sponsorship and advocacy to support their career
trajectories and strengthen their leadership platforms,
including through programs, such as our Vice President
Career Investment Initiative focused on high-performingBlack and Hispanic/Latinx VPs in the Americas and EMEA.
Many other career development initiatives are aimed at
fostering diverse talent at the analyst and associate level,
including the Black Analyst and Associate Initiative, theHispanic/Latinx Analyst Initiative and the Women’s Career
Strategies Initiative. We have also established Inclusion
Networks and Interest Forums that are open to all
professionals at Goldman Sachs to promote and advanceconnectivity, understanding, inclusion and diversity.

6

Goldman Sachs 2021 Form 10-K

Progress Toward Aspirational Goals. Reflecting ourefforts to increase diversity, the composition of our mostrecent partnership class was 27% women professionals,
17% Asian professionals, 7% Black professionals and 5%
Hispanic/Latinx professionals. The composition of ourmost recent managing director class was 30% women
professionals, 28% Asian professionals, 5% Black
professionals and 5% Hispanic/Latinx professionals.
We have also set forth the following aspirational goals:‰ We aim for analyst and associate hiring (which accounts
for over 70% of our annual hiring) to achieve
representation of 50% women professionals, 11% Black
professionals and 14% Hispanic/Latinx professionals in
the Americas, and 9% Black professionals in the U.K. In
2021, our analyst and associate hires included 45%
women professionals, 11% Black professionals and 15%
Hispanic/Latinx professionals in the Americas, and 14%
Black professionals in the U.K.
‰ We aim for women professionals to represent 40% of ourvice presidents globally by 2025 and 30% of senior talent(vice presidents and above) in the U.K. by 2023, while
also endeavoring for women employees to comprise 50%of all of our employees globally over time. As of
December 2021, women professionals represented 32%
of our vice president population globally and 31% ofsenior talent (vice presidents and above) in the U.K., andwomen employees represented 41% of all of ouremployees globally.
‰ We aim for Black professionals to represent 7% of ourvice president population in the Americas and in the U.K.,
and for Hispanic/Latinx professionals to represent 9% of
our vice president population in the Americas, both by2025. As of December 2021, Black professionals
represented 4% of our vice president population in theAmericas and 4% in the U.K., and Hispanic/Latinx
professionals represented 6% of our vice president
population in the Americas.
‰ We aim to double the number of campus hires in the U.S.
recruited from Historically Black Colleges andUniversities (HBCUs) by 2025 relative to 2020.
The metrics above are based on self-identification.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Talent Development and Retention
We seek to help our people achieve their full potential byinvesting in them and supporting a culture of continuous
development. Our goals are to maximize individual
capabilities, increase commercial effectiveness andinnovation, reinforce our culture, expand professional
opportunities, and help our people contribute positively totheir communities.
Instilling our culture in all employees is a continuous
process, in which training plays an important part. We offer
our employees the opportunity to participate in ongoingeducational offerings and periodic seminars throughGoldman Sachs University. To accelerate their integration
into the firm and our culture, new hires have theopportunity to receive training before they start working
and orientation programs with an emphasis on culture andnetworking, and nearly all employees participate in at least
one training event each year. For our more senior
employees, we provide guidance and training on how tomanage people and projects effectively, exhibit strong
leadership and exemplify our culture. We are also focusedon developing a high performing, diverse leadershippipeline and career planning for our next generation ofleaders. We maintain a variety of programs aimed at
employees’ professional growth and support throughout
their careers and as they evolve into leaders, including
initiatives, such as our Vice President and Managing
Director Leadership Acceleration Initiatives.
Enhancing our people’s experience of internal mobility is a
key focus, as we believe that this will inspire employees,
help retain top talent and create diverse experiences to build
future leaders.
Another important part of instilling our culture is our
employee performance review process. Employees arereviewed by supervisors, co-workers and employees whomthey supervise in a 360-degree review process that is
integral to our team approach and includes an evaluation ofan employee’s performance with respect to risk
management, protecting our reputation, adherence to ourcode of conduct, compliance, and diversity and inclusion
principles. Our approach to evaluating employee
performance centers on providing robust, timely andactionable feedback that facilitates professional
development. We have directed our managers, as leaders at
the firm, to take an active coaching role with their teams.
We have also implemented “The Three Conversations at
GS” through which managers establish goals with theirteam members at the start of the year, check in mid-year on
progress and then close out the year with a conversation on
performance against goals.

We believe that our people value opportunities to contributeto their communities and that these opportunities enhancetheir job satisfaction. We also believe that being able tovolunteer together with colleagues and participate incommunity organizations working on local service projects
strengthens our people’s bond with us. Community
TeamWorks, our signature volunteering initiative, enables
our people to participate in high-impact, team-based
volunteer opportunities, including projects coordinated withhundreds of nonprofit partner organizations worldwide.
During 2021, our people volunteered approximately
80,000 hours of service globally through Community
TeamWorks, with approximately 15,000 employees
partnering with approximately 370 nonprofit organizations
on approximately 800 community projects. To respond to
the interest of our people in helping with the response to the
COVID-19 pandemic, we have developed a series ofopportunities to support vulnerable populations remotely,
including small business owners, students and the elderly.
Wellness
We recognize that for our people to be successful in theworkplace they need support in their personal, as well as
their professional lives. We have created a strong support
framework for wellness, which is intended to enable
employees to better balance their roles at work and their
responsibilities at home. In addition to providing 20 weeks
of parental leave for all employees, we provide otherbenefits to support the wellness of our employees, including
family care leave, bereavement leave and, for longertenured employees, an unpaid sabbatical leave. We also
continue to advance our resilience programs, offering ourpeople a range of counseling, coaching, medical advisoryand personal wellness services. We have increased theavailability of these resources during the COVID-19
pandemic, and we have continued to evolve and strengthen
virtual offerings with the aim of maintaining the physicaland mental well-being of our employees, enhancing theireffectiveness and cohesiveness and providing them withgreater opportunities to access support.
We also introduced a COVID-19 10-day family leave
policy, available to our people globally to care for family
members due to COVID-19 related illness or meet childcare
needs, including homeschooling. We remain focused on
facilitating the safe return of our employees to our offices,
as circumstances permit, and employees in a number of our
locations around the world have returned to the office tovarying degrees. Given that the situation regarding the
COVID-19 pandemic varies geographically, our approach
to transitioning back to the office is tailored to eachlocation, and it evolves based on the specific conditions andrequirements of each location. We have comprehensive
protocols in place, including regular testing, and we willcontinue to be guided by a people-first approach as
circumstances evolve.
Goldman Sachs 2021 Form 10-K

7

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESIn addition, to support the financial wellness of ouremployees, we offer a variety of resources that help them
manage their personal financial health and decisionmaking, including financial education series, live andon-demand webinars, articles and interactive digital tools.
Global Reach and Strategic Locations
As a firm with a global client base, we take a strategic
approach to attracting, developing and managing a global
workforce. Our clients are located worldwide and we arean active participant in financial markets around the world.
As of December 2021, we had headcount of 43,900, offices
in over 35 countries and 52% of our headcount was basedin the Americas, 18% in EMEA and 30% in Asia. Our
employees come from over 180 countries and speak morethan 110 languages as of December 2021.
In addition to maintaining offices in major financial centersaround the world, we have established key strategic
locations, including in Bengaluru, Salt Lake City, Dallas,
Singapore and Warsaw. We continue to evaluate theexpanded use of strategic locations, including cities inwhich we do not currently have a presence.
As of December 2021, 40% of our employees were
working in one of these key strategic locations. We believe
our investment in these strategic locations enables us tobuild centers of excellence around specific capabilities that
support our business initiatives.

Sustainability
We have a long-standing commitment to sustainability.
Our two priorities in this area are helping clients acrossindustries facilitate and thrive in a low-carbon economy(Climate Transition) and leveraging our capabilities toadvance economic empowerment (Inclusive Growth).
We have established a Sustainable Finance Group, which
serves as the centralized group that drives climate strategy
and sustainability efforts across our firm, includingcommercial efforts alongside our businesses to advance
Climate Transition and Inclusive Growth. In 2020, we
created a new role, Global Head of Sustainability andInclusive Growth, which, like our One Goldman Sachs
initiative, is intended to facilitate the application of our fullcapabilities across both Climate Transition and Inclusive
Growth. Each of our segments has launched a
Sustainability Council. These councils focus on identifying
key Environmental, Social and Governance (ESG) priorities
for the segment, developing sustainability-related
capabilities and delivering sustainability-focused solutions
to clients in a holistic way.

8

Goldman Sachs 2021 Form 10-K

Our activities relating to sustainability present bothfinancial and nonfinancial risks, and we have processes for
managing these risks, similar to the other risks we face. We
have integrated oversight of climate-related risks into ourrisk management governance structure, from senior
management to our Board and its committees, including the
Risk and Public Responsibilities Committees. The Risk
Committee of the Board oversees firmwide financial andnonfinancial risks, which include climate risk, and, as partof its oversight, receives updates on our risk management
approach to climate risk. The Public Responsibilities
Committee of the Board assists the Board in its oversight ofour firmwide sustainability strategy and sustainability risks
affecting us, including with respect to climate change. Aspart of its oversight, the Public Responsibilities Committee
receives periodic updates on our sustainability strategy, andalso periodically reviews our governance and related
policies and processes for sustainability and climate changerelated risks. We have also implemented an Environmental
Policy Framework to guide our overall approach tosustainability issues. We apply this Framework whenevaluating transactions for environmental and social risks
and impacts. Our employees also receive training withrespect to environmental and social risks, including for
sectors and industries that we believe have higher potential
for these risks. See “Management’s Discussion and Analysisof Financial Condition and Results of Operations — Risk
Management — Overview and Structure of Risk
Management — Climate Risk Management” in Part II,
Item 7 of this Form 10-K for further information about our
climate risk management.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESAs a leading financial institution, we acknowledge theimportance of Climate Transition for our business. In
February 2021, we launched our inaugural sustainability
bond of $800 million, which is aligned with our sustainablefinance framework for future issuances and funds a rangeof on-balance sheet sustainable finance activity. In addition,
we are working with various external groups to develop
methods, metrics and frameworks for the financial sector,
with an aim to support greater consistency, comparability
and utility in approaches to measuring the financial sector’s
contribution to Climate Transition initiatives. We believe
we can advance sustainability by partnering with our clients
across our businesses, including by developing newsustainability-linked financing solutions, offering strategic
advice, or coinvesting alongside our clients in clean energy
companies. We have announced a target to deploy$750 billion in sustainable financing, investing andadvisory activity by the beginning of 2030. As of
December 2021, we achieved approximately 40% of that
goal, with the majority dedicated to Climate Transition. In
addition, we have announced our commitment to align our
financing activities with a net-zero-by-2050 pathway. In
that context, we have set an initial set of targets for 2030
focused on three sectors — power, oil and gas, and auto
manufacturing — where we believe we can have the mostsignificant impact and we see an opportunity to proactively
engage our clients, investors, advocacy groups and multistakeholder organizations, deploy capital required fortransition, and invest in new commercial solutions to drive
decarbonization in the real economy. Carbon neutrality isalso a priority for the operation of our firm and our supply
chain. In 2015, we achieved carbon neutrality in ouroperations and business travel, ahead of our 2020 goal
announced in 2009. We have expanded our operational
carbon commitment to include our supply chain, targeting
net-zero carbon emissions by 2030.
In addition to Climate Transition, our approach tosustainability also centers on Inclusive Growth and advancing
economic empowerment and financial opportunity for all. We
have sponsored initiatives, such as One Million Black Women,
Launch With GS, our Urban Investment Group, 10,000
Women and 10,000 Small Businesses. An overarching themeof our sustainability strategy is promoting diversity andinclusion as an imperative for us, as well as our clients andtheir boards. These efforts are further strengthened by strategic
partnerships that we have established in areas where we haveidentified gaps, or believe we are able to drive even greater
impact through collaboration. We also believe our ability toachieve our sustainability objectives is critically dependent on
the strengths and talents of our people, and we recognize thatour people are able to maximize their impact by collaborating
in a diverse and inclusive work environment. See “Business —Human Capital Management” for information about ourhuman capital management goals, programs and policies.

Competition
The financial services industry and all of our businesses areintensely competitive, and we expect them to remain so.
Our competitors are other entities that provide investmentbanking (including transaction banking), market-making,investment management services, commercial and/or
consumer lending, deposit-taking and other banking
products and services, as well as those entities that makeinvestments in securities, commodities, derivatives, realestate, loans and other financial assets. These entities
include brokers and dealers, investment banking firms,
commercial banks, credit card issuers, insurancecompanies, investment advisers, mutual funds, hedge funds,
private equity funds, merchant banks, consumer financecompanies and financial technology and other internetbased companies. We compete with some entities globallyand with others on a regional, product or niche basis. We
compete based on a number of factors, includingtransaction execution, client experience, products andservices, innovation, reputation and price.
We have faced, and expect to continue to face, pressure toretain market share by committing capital to businesses ortransactions on terms that offer returns that may not becommensurate with their risks. In particular, corporateclients seek such commitments (such as agreements toparticipate in their loan facilities) from financial services
firms in connection with investment banking and otherassignments.
Consolidation and convergence have significantly increased
the capital base and geographic reach of some of ourcompetitors, and have also hastened the globalization of the
securities and other financial services markets. As a result,
we have had to commit capital to support our international
operations and to execute large global transactions. To
capitalize on some of our most significant opportunities, wewill have to compete successfully with financial institutions
that are larger and have more capital and that may have astronger local presence and longer operating history outside
the U.S.
We also compete with smaller institutions that offer moretargeted services, such as independent advisory firms. Someclients may perceive these firms to be less susceptible topotential conflicts of interest than we are, and, as described
below, our ability to effectively compete with them could be
affected by regulations and limitations on activities that
apply to us but may not apply to them.

Goldman Sachs 2021 Form 10-K

9

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

A number of our businesses are subject to intense pricecompetition. Efforts by our competitors to gain market
share have resulted in pricing pressure in our investmentbanking, market-making, consumer, wealth management
and asset management businesses. For example, theincreasing volume of trades executed electronically,
through the internet and through alternative trading
systems, has increased the pressure on trading commissions,in that commissions for electronic trading are generally
lower than those for non-electronic trading. It appears that
this trend toward low-commission trading will continue.
Price competition has also led to compression in the
difference between the price at which a market participant
is willing to sell an instrument and the price at whichanother market participant is willing to buy it (i.e., bid/offer
spread), which has affected our market-making businesses.
The increasing prevalence of passive investment strategies
that typically have lower fees than other strategies we offer
has affected the competitive and pricing dynamics for ourasset management products and services. In addition, we
believe that we will continue to experience competitive
pressures in these and other areas in the future as some ofour competitors seek to obtain market share by further
reducing prices, and as we enter into or expand ourpresence in markets that may rely more heavily onelectronic trading and execution. We and other banks also
compete for deposits on the basis of the rates we offer.
Increases in short-term interest rates are expected to resultin more intense competition in deposit pricing.
We also compete on the basis of the types of financial
products and client experiences that we and ourcompetitors offer. In some circumstances, our competitors
may offer financial products that we do not offer and that
our clients may prefer, or our competitors may develop
technology platforms that provide a better client
experience.
The provisions of the U.S. Dodd-Frank Wall Street Reformand Consumer Protection Act (Dodd-Frank Act), therequirements promulgated by the Basel Committee on
Banking Supervision (Basel Committee) and other financial
regulations could affect our competitive position to theextent that limitations on activities, increased fees andcompliance costs or other regulatory requirements do not
apply, or do not apply equally, to all of our competitors or
are not implemented uniformly across different
jurisdictions. For example, the provisions of the DoddFrank Act that prohibit proprietary trading and restrict
investments in certain hedge and private equity funds
differentiate between U.S.-based and non-U.S.-basedbanking organizations and give non-U.S.-based banking
organizations greater flexibility to trade outside of the U.S.
and to form and invest in funds outside the U.S.

10

Goldman Sachs 2021 Form 10-K

Likewise, the obligations with respect to derivativetransactions under Title VII of the Dodd-Frank Act depend,in part, on the location of the counterparties to thetransaction. The impact of regulatory developments on ourcompetitive position has depended and will continue todepend to a large extent on the manner in which therequired rulemaking and regulatory guidance evolve, theextent of international convergence, and the developmentof market practice and structures under the evolving
regulatory regimes, as described further in “Regulation”
below.
We also face intense competition in attracting and retaining
qualified employees. Our ability to continue to compete
effectively has depended and will continue to depend upon
our ability to attract new employees, retain and motivate
our existing employees and to continue to compensate
employees competitively amid intense public and regulatory
scrutiny on the compensation practices of large financial
institutions. Our pay practices and those of certain of ourcompetitors are subject to review by, and the standards of,
the FRB and other regulators inside and outside the U.S.,
including the Prudential Regulation Authority (PRA) andthe Financial Conduct Authority (FCA) in the U.K. We also
compete for employees with institutions whose pay
practices are not subject to regulatory oversight. See“Regulation — Compensation Practices” and “Risk
Factors — Competition — Our businesses may be adversely
affected if we are unable to hire and retain qualified
employees” in Part I, Item 1A of this Form 10-K for further
information about such regulation.

Regulation
As a participant in the global financial services industry, weare subject to extensive regulation and supervisionworldwide. The regulatory regimes applicable to ouroperations worldwide have been, and continue to be,
subject to significant changes. The Basel Committee is theprimary global standard setter for prudential bankregulation; however, its standards do not become effective
in a jurisdiction until the relevant regulators have adopted
rules to implement its standards. The implications of theseregulations for our businesses depend to a large extent on
their implementation by the relevant regulators globally,
and the market practices and structures that develop.
New regulations have been adopted or are being consideredby regulators and policy makers worldwide, as described
below. The effects of any changes to the regulations
affecting our businesses, including as a result of the
proposals described below, are uncertain and will not beknown until such changes are finalized and market
practices and structures develop under the revised
regulations.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESOur principal subsidiaries operating in the U.S. include GS
Bank USA, Goldman Sachs & Co. LLC (GS&Co.),
J. Aron & Company LLC (J. Aron) and Goldman Sachs
Asset Management, L.P. Our principal subsidiaries
operating in Europe include Goldman Sachs International(GSI), GSIB and Goldman Sachs Asset Management
International (GSAMI), which are incorporated andheadquartered in the U.K., and Goldman Sachs Bank
Europe SE (GSBE), which is incorporated andheadquartered in Germany. Our principal subsidiaries
operating in Asia include Goldman Sachs Japan Co., Ltd.
(GSJCL).
As a result of the U.K.’s withdrawal from the E.U. (Brexit),
we have strengthened the capabilities of our E.U. operating
subsidiaries, particularly GSBE, and have moved certain
activities there. For example, we have moved a number ofrelationships with clients of our Investment Banking,Global Markets and Wealth Management businesses from
GSI and GSIB to GSBE, and clients of our AssetManagement business from GSAMI to GSBE; establishedaccess for GSBE to exchanges, clearing houses anddepositories and other market infrastructure in the E.U.;
established branches of GSBE in several E.U. member statesand in the U.K.; and strengthened the capital, personnel andother resources at GSBE.
Banking Supervision and Regulation
Group Inc. is a BHC under the U.S. Bank Holding
Company Act of 1956 (BHC Act) and an FHC underamendments to the BHC Act effected by the U.S. GrammLeach-Bliley Act of 1999 (GLB Act), and is subject tosupervision and examination by the FRB, which is ourprimary regulator.
The FRB’s rating system for large financial institutions isaligned with its supervisory program and is comprised ofcomponent ratings for capital planning and positions,liquidity risk management and positions, and governanceand controls.
Under the system of “functional regulation” establishedunder the BHC Act, the primary regulators of our U.S.
non-bank subsidiaries directly regulate the activities of
those subsidiaries, with the FRB exercising a supervisoryrole. Such “functionally regulated” subsidiaries include
broker-dealers and security-based swap dealers registeredwith the SEC, such as our principal U.S. broker-dealer,
GS&Co., entities registered with or regulated by the CFTCwith respect to futures-related and swaps-related activities
and investment advisers registered with the SEC withrespect to their investment advisory activities.

Our principal U.S. bank subsidiary, GS Bank USA, issupervised and regulated by the FRB, the FDIC, the New
York State Department of Financial Services (NYDFS) andthe Consumer Financial Protection Bureau (CFPB). GS
Bank USA also has a London branch, which is regulated by
the FCA and PRA, and a Tokyo branch, which is regulatedby the Japan Financial Services Agency. We conduct anumber of our activities partially or entirely through GS
Bank USA and its subsidiaries, including: corporate loans(including leveraged lending) and transaction banking;consumer loans (including installment and credit cardloans); small business loans (including installment, lines ofcredit and credit cards); wealth management loans(including mortgages); interest rate, credit, currency andother derivatives; deposit-taking; and agency lending.
Our E.U. subsidiaries are subject to various E.U.
regulations, as well as national laws, including those
implementing European directives. GSBE is directlysupervised by the European Central Bank (ECB) andadditionally by BaFin and Deutsche Bundesbank in thecontext of the E.U. Single Supervisory Mechanism (SSM).
GSBE’s London branch is regulated by the FCA. GSBE
engages in certain activities primarily in the E.U., including
underwriting and market making in debt and equity
securities and derivatives, investment, asset and wealthmanagement services, deposit-taking, lending (including
securities lending), and financial advisory services and is a
primary dealer for government bonds issued by E.U.
sovereigns. On July 1, 2021, GSBE became a subsidiary of
GS Bank USA. As a foreign bank subsidiary of GS Bank
USA, GSBE is subject to limits on the nature and scope of its
activities under the FRB’s Regulation K, including limits on
its underwriting and market making in equity securities
based on GSBE’s and/or GS Bank USA’s capital.
Goldman Sachs Paris Inc. et Cie (GSPIC) is an investment
firm regulated by the French Prudential Supervision and
Resolution Authority and the Financial Markets Authority.
GSPIC’s activities include certain activities that GSBE isprevented from undertaking. GSPIC applied in
October 2021 to become a credit institution.

Goldman Sachs 2021 Form 10-K

11

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESOur principal subsidiaries in the U.K. include GSI, a U.K.
broker-dealer and a designated investment firm, and GSIB,
a U.K. bank. Both GSI and GSIB are regulated by the PRA
and the FCA. As an investment firm, GSI is subject toprudential requirements applicable to banks, including
capital and liquidity requirements. GSI provides brokerdealer services in and from the U.K. and is registered with
the CFTC as a swap dealer and with the SEC as a securitiesbased swap dealer. GSIB engages in lending (including
securities lending) and deposit-taking activities and is a
primary dealer for U.K. government bonds. GSI and GSIB
maintain branches outside of the U.K. and are subject to thelaws and regulations of the jurisdictions where they arelocated.
Capital and Liquidity Requirements. We and GS Bank
USA are subject to regulatory risk-based capital andleverage requirements that are calculated in accordancewith the regulations of the FRB (Capital Framework). The
Capital Framework is largely based on the BaselCommittee’s framework for strengthening the regulation,
supervision and risk management of banks (Basel III) andalso implements certain provisions of the Dodd-Frank Act.
Under the U.S. federal bank regulatory agencies’ tailoring
framework, we and GS Bank USA are subject to “Category
I” standards because we have been designated as a global
systemically important bank (G-SIB). Accordingly, we and
GS Bank USA are “Advanced approach” banking
organizations. Under the Capital Framework, we and GS
Bank USA must meet specific regulatory capitalrequirements that involve quantitative measures of assets,
liabilities and certain off-balance sheet items. The
sufficiency of our capital levels is also subject to qualitative
judgments by regulators. We and GS Bank USA are also
subject to liquidity requirements established by the U.S.
federal bank regulatory agencies.
GSBE is subject to capital and liquidity requirements
prescribed in the E.U. Capital Requirements Regulation, as
amended (CRR), and the E.U. Capital Requirements
Directive, as amended (CRD), which are largely based onBasel III.
The most recent previous amendments to the CRR and
CRD (respectively, CRR II and CRD V) include changes tothe market risk, counterparty credit risk, large exposuresand leverage ratio frameworks. These changes have been
applicable in the E.U. since June 2021.
GSI and GSIB are subject to the U.K. capital and liquidity
frameworks, which are also largely based on Basel III andremain predominantly aligned with the E.U. capital andliquidity frameworks. Amendments similar to CRR II and
CRD V became applicable in the U.K. on January 1, 2022.
Requirements established by E.U. and U.K. authorities are
therefore similar to those applicable to GS Bank USA andus.
12Goldman Sachs 2021 Form 10-K

Risk-Based Capital Ratios. As Advanced approachbanking organizations, we and GS Bank USA calculate riskbased capital ratios in accordance with both theStandardized and Advanced Capital Rules. Both theAdvanced Capital Rules and the Standardized Capital
Rules include minimum risk-based capital requirements
and additional capital conservation buffer requirementsthat must be satisfied solely with Common Equity Tier 1(CET1) capital. Failure to satisfy a buffer requirement infull would result in constraints on capital distributions anddiscretionary executive compensation. The severity of theconstraints would depend on the amount of the shortfall
and the organization’s “eligible retained income,” definedas the greater of (i) net income for the four preceding
quarters, net of distributions and associated tax effects notreflected in net income; and (ii) the average of net income
over the preceding four quarters. For Group Inc., thecapital conservation buffer requirements consist of a 2.5%
buffer (under the Advanced Capital Rules), a stress capital
buffer (SCB) (under the Standardized Capital Rules), andboth a countercyclical buffer and the G-SIB surcharge(under both Capital Rules). For GS Bank USA, the capitalconservation buffer requirements consist of a 2.5% buffer
and the countercyclical capital buffer.
The SCB is based on the results of the Federal Reserve’s
supervisory stress tests and our planned common stock
dividends and is likely to change over time based on the
results of the annual supervisory stress tests. See “Stress
Tests and Capital Planning” below. The countercyclicalcapital buffer is designed to counteract systemic
vulnerabilities and currently applies only to banking
organizations subject to Category I, II or III standards,
including us and GS Bank USA. Several other national
supervisors also require countercyclical capital buffers. The
G-SIB surcharge and countercyclical capital buffer
applicable to us may change in the future including due toadditional guidance from our regulators and/or positionalchanges. As a result, the minimum capital ratios to which
we are subject are likely to change over time.
The U.S. federal bank regulatory agencies have a rule that
implements the Basel Committee’s standardized approachfor measuring counterparty credit risk exposures inconnection with derivative contracts (SA-CCR). Under therule, “Advanced approach” banking organizations are
required to use SA-CCR for calculating their standardizedrisk-weighted assets (RWAs) and, with some adjustments,
for purposes of determining their supplementary leverage
ratios (SLRs) discussed below.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe capital requirements applicable to GSBE, GSI and GSIB
include both minimum requirements and buffers. See“Management’s Discussion and Analysis of Financial
Condition and Results of Operations — CapitalManagement and Regulatory Capital” in Part II, Item 7 ofthis Form 10-K and Note 20 to the consolidated financial
statements in Part II, Item 8 of this Form 10-K for
information about our capital ratios and those of GS Bank
USA, GSBE, GSI and GSIB.
The Basel Committee standards include guidelines forcalculating incremental capital ratio requirements forbanking institutions that are systemically significant from adomestic but not global perspective (D-SIBs). Depending on
how these guidelines are implemented by national
regulators, they may apply, among others, to certain
subsidiaries of G-SIBs. These guidelines are in addition to
the framework for G-SIBs, but are more principles-based.
The CRD and CRR provide that institutions that aresystemically important at the E.U. or member state level,
known as other systemically important institutions(O-SIIs), may be subject to additional capital ratio
requirements, according to their degree of systemic
importance (O-SII buffers). In 2021, BaFin identified GSBE
as an O-SII in Germany and set an O-SII buffer, applicablefrom January 1, 2022.
In the U.K., the PRA has identified Goldman Sachs GroupUK Limited (GSG UK), the parent company of GSI and
GSIB, as an O-SII but has not applied an O-SII buffer.
The Basel Committee has finalized revisions to theframework for calculating capital requirements for market
risk as part of its Fundamental Review of the Trading Book(FRTB). These revisions are expected to increase market
risk capital requirements for most banking organizations
and large broker-dealers subject to bank capitalrequirements. The revised framework, among other things,
revises the standardized and internal model-based
approaches used to calculate market risk requirements andclarifies the scope of positions subject to market risk capitalrequirements. The Basel Committee frameworkcontemplates that national regulators implement therevised framework by January 1, 2023. The U.S. federalbank regulatory agencies have not yet proposed rules
implementing the revised framework. Under the CRR, E.U.
financial institutions commenced reporting their market
risk calculations under the revised framework in the third
quarter of 2021. U.K. authorities have not yet proposed
rules to implement this framework.

The Basel Committee published standards that it describedas the finalization of the Basel III post-crisis regulatory
reforms (Basel III Revisions). These standards set a floor oninternally modeled capital requirements at a percentage ofthe capital requirements under the standardized approach.
They also revise the Basel Committee’s standardized andinternal model-based approaches for credit risk, provide a
new standardized approach for operational risk capital andrevise the frameworks for credit valuation adjustment(CVA) risk. The Basel Committee framework contemplates
that national regulators implement these standards by
January 1, 2023, and that the new floor be phased inthrough January 1, 2028. In July 2020, the BaselCommittee finalized further revisions to the framework for
CVA risk, which are intended to align that framework withthe market risk framework.
The U.S. federal bank regulatory authorities have not yet
proposed rules implementing the Basel III Revisions forpurposes of their risk-based capital ratios. The European
Commission proposed rules to implement the Basel III
Revisions in October 2021. The proposed E.U. rules
contemplate amendments to the CRR and the CRD,
referred to as CRR III and CRD VI, to take effect inJanuary 2025. The U.K. authorities have not yet released a
proposal on the Basel III Revisions.
The Basel Committee has also published an updated
securitization framework and a revised G-SIB assessment
methodology, but the U.S. federal bank regulatory agencies
have not yet proposed rules implementing them. The
updated securitization framework has been implemented in
the E.U. and U.K.
Leverage Ratios. Under the Capital Framework, we and
GS Bank USA are subject to Tier 1 leverage ratios and SLRs
established by the FRB. As a G-SIB, the SLR requirements
applicable to us include both a minimum requirement and abuffer requirement, which operates in the same manner as
the risk-based buffer requirements described above. In
April 2018, the FRB and the OCC issued a proposed rule
which would (i) replace the current 2% SLR buffer for
G-SIBs, including us, with a buffer equal to 50% of their
G-SIB surcharge and (ii) revise the 6% SLR requirement for
Category I banks, such as GS Bank USA, to be “wellcapitalized” with a requirement equal to 3% plus 50% of
their parent’s G-SIB surcharge. This proposal, together withthe adopted rule requiring use of SA-CCR for purposes ofcalculating the SLR, would implement certain of therevisions to the leverage ratio framework published by theBasel Committee in December 2017.

Goldman Sachs 2021 Form 10-K

13

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESGSBE and certain of our U.K. entities, including GSI and
GSIB, are also subject to requirements relating to leverage
ratios, which are generally based on the Basel Committee
leverage ratio standards.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — CapitalManagement and Regulatory Capital” in Part II, Item 7 ofthis Form 10-K and Note 20 to the consolidated financial
statements in Part II, Item 8 of this Form 10-K for
information about our and GS Bank USA’s Tier 1 leverage
ratios and SLRs, and GSI’s leverage ratio.
Liquidity Ratios. The Basel Committee’s framework forliquidity risk measurement, standards and monitoring
requires banking organizations to measure their liquidity
against two specific liquidity tests: the Liquidity Coverage
Ratio (LCR) and the Net Stable Funding Ratio (NSFR).
The LCR rule issued by the U.S. federal bank regulatory
agencies and applicable to both us and GS Bank USA isgenerally consistent with the Basel Committee’s frameworkand is designed to ensure that a banking organization
maintains an adequate level of unencumbered, high-quality
liquid assets equal to or greater than the expected net cash
outflows under an acute short-term liquidity stressscenario. We and GS Bank USA are required to maintain aminimum LCR of 100%. See “Available Information”
below and “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — CapitalManagement and Regulatory Capital” in Part II, Item 7 ofthis Form 10-K for information about our average daily
LCR.
GSBE is subject to the LCR rule issued by the European
Commission, and GSI and GSIB are subject to the U.K.
prudential framework’s LCR rules. These rules are
generally consistent with the Basel Committee’s
framework.
The NSFR is designed to promote medium- and long-term
stable funding of the assets and off-balance sheet activities
of banking organizations over a one-year time horizon. The
Basel Committee’s NSFR framework requires banking
organizations to maintain a minimum NSFR of 100%.

The U.S. federal bank regulatory agencies issued a final
rule, which became effective in July 2021, implementing the
NSFR for large U.S. banking organizations, including us
and GS Bank USA. We will be required to publicly disclose
our quarterly average daily NSFR semiannually beginningin 2023. The CRR implemented the NSFR for certain E.U.
financial institutions, including GSBE, which became
effective in June 2021. The NSFR requirement implemented
in the U.K. became effective in January 2022 and isapplicable to both GSI and GSIB.
The FRB’s enhanced prudential standards require BHCs
with $100 billion or more in total consolidated assets tocomply with enhanced liquidity and overall risk
management standards, which include maintaining a levelof highly liquid assets based on projected funding needs for
30 days, and increased involvement by boards of directors
in liquidity and overall risk management. Although theliquidity requirement under these rules has some similarities
to the LCR, it is a separate requirement. GSBE also has its
own liquidity planning process, which incorporates
internally designed stress tests and those required under
German regulatory requirements and the ECB Guide toInternal Liquidity Adequacy Assessment Process (ILAAP).
GSI and GSIB have their own liquidity planning processes,
which incorporate internally designed stress tests developedin accordance with the guidelines of the PRA’s ILAAP.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Risk
Management — Overview and Structure of Risk
Management” and “— Liquidity Risk Management” inPart II, Item 7 of this Form 10-K for information about the
LCR and NSFR, as well as our risk management practices
and liquidity.
Stress Tests and Capital Planning. The FRB’s
Comprehensive Capital Analysis and Review (CCAR) is
designed to ensure that large BHCs, including us, havesufficient capital to permit continued operations during
times of economic and financial stress. As required by the
FRB, we perform an annual capital stress test andincorporate the results into an annual capital plan, which
we submit to the FRB for review. See “Management’s
Discussion and Analysis of Financial Condition and Resultsof Operations — Risk Management — Overview andStructure of Risk Management — Capital Risk
Management” in Part II, Item 7 of this Form 10-K for
further information about our annual capital plan. As
described in “Available Information” below, summary
results of the annual stress test are published on our
website.
As part of the CCAR process, the FRB evaluates our plan tomake capital distributions across a range ofmacroeconomic and company-specific assumptions, basedon our and the FRB’s own stress tests.

14

Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe FRB’s rule applicable to BHCs with $100 billion ormore in total consolidated assets, including us, replaced thestatic 2.5% component of the capital conservation buffer
required under the Standardized Capital Rules with the
SCB. The SCB reflects stressed losses estimated under thesupervisory severely adverse scenario of the CCAR stresstests, as calculated by the FRB, and includes four quartersof planned common stock dividends. The SCB, which is
subject to a 2.5% floor, is generally effective on October 1of each year and remains in effect until October 1 of thefollowing year, unless it is reset in connection with theresubmission of a capital plan. See “Available Information”
below and “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — CapitalManagement and Regulatory Capital” in Part II, Item 7 ofthis Form 10-K for information about our SCB
requirement.
The final rule implementing the SCB requires a BHC toreceive the FRB’s approval for any dividend, stock
repurchase or other capital distribution, other than acapital distribution on a newly issued capital instrument, if
the BHC is required to resubmit its capital plan.
U.S. depository institutions with total consolidated assets of$250 billion or more that are subsidiaries of U.S. G-SIBs are
required to submit annual company-run stress test results to
the FRB. As a result of recent growth in its balance sheet,
GS Bank USA will be required to submit its annual stresstest results in 2022. GSBE also has its own capital and stresstesting process, which incorporates internally designed
stress tests and those required under German regulatory
requirements and the ECB Guide to Internal Capital
Adequacy Assessment Process (ICAAP). In addition, GSI
and GSIB have their own capital planning and stress testingprocesses, which incorporate internally designed stress tests
developed in accordance with the PRA’s ICAAP guidelines.

U.S. federal and state laws impose limitations on thepayment of dividends by U.S. depository institutions, suchas GS Bank USA. In general, the amount of dividends that
may be paid by GS Bank USA is limited to the lesser of theamounts calculated under a recent earnings test and an
undivided profits test. Under the recent earnings test, a
dividend may not be paid if the total of all dividends
declared by the entity in any calendar year is in excess of thecurrent year’s net income combined with the retained net
income of the two preceding years, unless the entity obtains
regulatory approval. Under the undivided profits test, a
dividend may not be paid in excess of the entity’s undivided
profits (generally, accumulated net profits that have notbeen paid out as dividends or transferred to surplus), unlessthe entity receives regulatory and stockholder approval. As
a result of dividend payments from GS Bank USA to Group
Inc. in connection with the acquisition of GSBE in
July 2021, GS Bank USA cannot currently declare any
dividends without regulatory approval.
The applicable U.S. banking regulators have authority toprohibit or limit the payment of dividends if, in the banking
regulator’s opinion, payment of a dividend would
constitute an unsafe or unsound practice in light of thefinancial condition of the banking organization.
Source of Strength. The Dodd-Frank Act requires BHCs
to act as a source of strength to their U.S. bank subsidiaries
and to commit capital and financial resources to support
those subsidiaries. This support may be required by the
FRB at times when BHCs might otherwise determine not toprovide it. Capital loans by a BHC to a U.S. subsidiarybank are subordinate in right of payment to deposits and tocertain other indebtedness of the subsidiary bank. In
addition, if a BHC commits to a U.S. federal banking
agency that it will maintain the capital of its banksubsidiary, whether in response to the FRB’s invoking its
source-of-strength authority or in response to otherregulatory measures, that commitment will be assumed by
the bankruptcy trustee for the BHC and the bank will beentitled to priority payment in respect of that commitment,
ahead of other creditors of the BHC.

Goldman Sachs 2021 Form 10-K

15

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Transactions Between Affiliates. Transactions between
GS Bank USA or its subsidiaries, including GSBE, andGroup Inc. or its other subsidiaries and affiliates are subject
to restrictions under the Federal Reserve Act andregulations issued by the FRB. These laws and regulations
generally limit the types and amounts of transactions (suchas loans and other credit extensions, including credit
exposure arising from resale agreements, securities
borrowing and derivative transactions, from GS Bank USA
or its subsidiaries to Group Inc. or its other subsidiaries andaffiliates and purchases of assets by GS Bank USA or its
subsidiaries from Group Inc. or its other subsidiaries andaffiliates) that may take place and generally require thosetransactions, to the extent permitted, to be on market terms
or better to GS Bank USA or its subsidiaries. These laws
and regulations generally do not apply to transactions
between GS Bank USA and its subsidiaries. Similarly,
German regulatory requirements provide that certaintransactions between GSBE and GS Bank USA or its otheraffiliates, including Group Inc., must be on market terms
and are subject to special internal approval requirements.
PRA rules provide similar requirements for transactions
between GSI and GSIB and their respective affiliates.
The BHC Act prohibits the FRB from requiring a payment
by a BHC subsidiary to a depository institution if thefunctional regulator of that subsidiary objects to thepayment. In that case, the FRB could instead require thedivestiture of the depository institution and impose
operating restrictions pending the divestiture.
Resolution and Recovery Plans. We are required by the
FRB and the FDIC to submit a periodic plan for our rapid
and orderly resolution in the event of material financial
distress or failure (resolution plan). If these regulators
jointly determine that an institution has failed to remediate
identified shortcomings in its resolution plan or that its
resolution plan, after any permitted resubmission, is notcredible or would not facilitate an orderly resolution under
the U.S. Bankruptcy Code, they may jointly impose more
stringent capital, leverage or liquidity requirements or
restrictions on growth, activities or operations, or may
jointly order the institution to divest assets or operations, inorder to facilitate orderly resolution in the event of failure.
The FRB and FDIC have a rule requiring U.S. G-SIBs to
submit resolution plans on a two-year cycle (alternating
between full and targeted submissions). We submitted our2021 resolution plan, which was a targeted submission, in
June 2021. Our next required submission is a full
submission by July 1, 2023. See “Risk Factors — The
application of Group Inc.’s proposed resolution strategy
could result in greater losses for Group Inc.’s security
holders” in Part I, Item 1A of this Form 10-K and“Available Information” in Part I, Item 1 of this Form 10-K
for further information about our resolution plan.
16

Goldman Sachs 2021 Form 10-K

We are also required by the FRB to submit, on a periodic
basis, a global recovery plan that outlines the steps that we
could take to reduce risk, maintain sufficient liquidity andconserve capital in times of prolonged stress. Certain of our
subsidiaries are also subject to similar recovery planrequirements.
The FDIC has issued a rule requiring each insured
depository institution (IDI) with $50 billion or more in
assets, such as GS Bank USA, to provide a resolution plan.
Our resolution plan for GS Bank USA must, among otherthings, demonstrate that it is adequately protected fromrisks arising from our other entities. GS Bank USA’s mostrecent resolution plan was submitted in June 2018. In
January 2021, the FDIC announced its intention to require
resolution plan submissions for IDIs with $100 billion ormore in assets, including GS Bank USA. In June 2021, theFDIC issued guidance for those resolution plans. This
guidance splits covered IDIs into two groups for purposesof the timing of resolution plan submissions, and GS Bank
USA is in the second group with a later submission date.
The U.S. federal bank regulatory agencies have adopted
rules imposing restrictions on qualified financial contracts(QFCs) entered into by G-SIBs. The rules are intended tofacilitate the orderly resolution of a failed G-SIB by limiting
the ability of the G-SIB to enter into a QFC unless (i) the
counterparty waives certain default rights in such contract
arising upon the entry of the G-SIB or one of its affiliates
into resolution, (ii) the contract does not contain
enumerated prohibitions on the transfer of such contract
and/or any related credit enhancement, and (iii) the
counterparty agrees that the contract will be subject to thespecial resolution regimes set forth in the Dodd-Frank Act
orderly liquidation authority (OLA) and the Federal
Deposit Insurance Act of 1950 (FDIA), described below. GS
Bank USA has achieved compliance by adhering to theInternational Swaps and Derivatives Association Universal
Resolution Stay Protocol (ISDA Universal Protocol) andInternational Swaps and Derivatives Association 2018 U.S.
Resolution Stay Protocol (U.S. ISDA Protocol) described
below.
Certain of our subsidiaries also adhere to these protocols.
The ISDA Universal Protocol imposes a stay on certain
cross-default and early termination rights within standard
ISDA derivative contracts and securities financing
transactions between adhering parties in the event that oneof them is subject to resolution in its home jurisdiction,
including a resolution under OLA or the FDIA in the U.S.
The U.S. ISDA Protocol, which was based on the ISDA
Universal Protocol, was created to allow market
participants to comply with the final QFC rules adopted by
the federal bank regulatory agencies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe E.U. Bank Recovery and Resolution Directive (BRRD),
as amended by the BRRD II, establishes a framework forthe recovery and resolution of financial institutions in the
E.U., such as GSBE. The BRRD provides national
supervisory authorities with tools and powers topre-emptively address potential financial crises in order topromote financial stability and minimize taxpayers’
exposure to losses. The BRRD requires E.U. member statesto grant certain resolution powers to national and, where
relevant, E.U. resolution authorities, including the power toimpose a temporary stay and to recapitalize a failing entity
by writing down its unsecured debt or converting its
unsecured debt into equity. Financial institutions in the
E.U. must provide that contracts governed by non-E.U. law
recognize those temporary stay and bail-in powers unlessdoing so would be impracticable. GSBE is under the direct
authority of the Single Resolution Board for resolution
planning. Regulatory authorities in the E.U. may require
financial institutions in the E.U., including subsidiaries of
non-E.U. groups, to submit recovery plans and to assist therelevant resolution authority in constructing resolutionplans for the E.U. entities. GSBE’s primary regulator withrespect to recovery planning is the ECB, and it is also
regulated by BaFin and Deutsche Bundesbank.
The U.K. Special Resolution Regime confers substantiallythe same powers on the Bank of England, as the U.K.
resolution authority, and substantially the samerequirements on U.K. financial institutions. Further, certain
U.K. financial institutions, including GSI and GSIB, arerequired to meet the Bank of England’s expectations
contained in the U.K. Resolution Assessment Framework,
including with respect to loss absorbency, contractual stays,
operational continuity and funding in resolution. They arealso required by the PRA to submit solvent wind-downplans on how they could be wound down in a stressed
environment. The PRA is also the regulatory authority in
the U.K. that supervises recovery planning, and GSI and
GSIB are each required to submit recovery plans to the
PRA.
Total Loss-Absorbing Capacity (TLAC). The FRB has
issued a rule addressing U.S. implementation of the
Financial Stability Board’s (FSB’s) TLAC principles andterm sheet on minimum TLAC requirements for G-SIBs.
The rule (i) establishes minimum TLAC requirements;(ii) establishes minimum requirements for “eligible longterm debt” (i.e., debt that is unsecured, has a maturity of atleast one year from issuance and satisfies certain additional
criteria); (iii) prohibits certain parent company
transactions; and (iv) caps the amount of parent company
liabilities that are not eligible long-term debt.

The rule also prohibits a BHC that has been designated as a
U.S. G-SIB from (i) guaranteeing subsidiaries’ liabilities thatare subject to early termination provisions if the BHC
enters into an insolvency or receivership proceeding, subject
to an exception for guarantees permitted by rules of the U.S.
federal banking agencies imposing restrictions on QFCs;(ii) incurring liabilities guaranteed by subsidiaries;(iii) issuing short-term debt to third parties; or (iv) entering
into derivatives and certain other financial contracts withexternal counterparties.
Additionally, the rule caps, at 5% of the value of the parent
company’s eligible TLAC, the amount of unsecured
non-contingent third-party liabilities that are not eligible
long-term debt that could rank equally with or junior toeligible long-term debt.
The FRB, the OCC and the FDIC issued a final rule,effective April 1, 2021, requiring “Advanced approach”
banking organizations, such as us, to deduct from their own
regulatory capital certain investments above thresholds in
unsecured debt instruments issued by G-SIBs, including
those issued for purposes of satisfying TLAC requirements.
The CRR and the BRRD are designed to, among otherthings, implement the FSB’s minimum TLAC requirement
for G-SIBs. For example, the CRR requires E.U.
subsidiaries of a non-E.U. G-SIB to meet internal TLAC
requirements if they exceed the threshold of 5% of the
G-SIB’s RWAs, operating income or leverage exposure.
GSBE does not currently exceed these thresholds. Under the
U.K. financial services regime, GSG UK exceeds theapplicable thresholds and therefore, it is subject to internal
TLAC requirements.
The CRD requires a non-E.U. group with more than
€40 billion of assets in the E.U., such as us, to establish an
E.U. intermediate holding company (E.U. IHC) by
December 30, 2023 if it has, as in our case, two or more ofcertain types of E.U. financial institution subsidiaries,
including broker-dealers and banks. A non-E.U. group may
have two E.U. IHCs if a request for a second is approved.
The CRR requires E.U. IHCs to satisfy capital and liquidity
requirements, a minimum requirement for own funds andeligible liabilities (MREL), and certain other prudential
requirements at a consolidated level. The U.K. has not
implemented the requirement for an IHC; however, the
PRA has introduced a requirement to approve or exempt
certain U.K. financial holding companies, including GSG
UK, which became effective in January 2022.

Goldman Sachs 2021 Form 10-K

17

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe BRRD II and the U.K. resolution regime subject
institutions to an MREL, which is generally consistent with
the FSB’s TLAC standard. In June 2018, the Bank ofEngland published a statement of policy on internal MREL,
which requires a material U.K. subsidiary of an overseas
banking group, such as GSI, to meet a minimum internal
MREL requirement to facilitate the transfer of losses to its
resolution entity, which for GSI is Group Inc. The
transitional minimum internal MREL requirement became
fully effective on January 1, 2022. In order to comply with
the MREL statement of policy, we have provided the Bankof England the right to exercise bail-in triggers over certain
intercompany regulatory capital and senior debt
instruments issued by GSI. These triggers enable the Bankof England to write down such instruments or convert such
instruments to equity. The triggers can be exercised by the
Bank of England if it determines that GSI has reached thepoint of non-viability and the FRB and the FDIC have notobjected to the bail-in or if Group Inc. enters bankruptcy orsimilar proceedings.
Insolvency of a BHC or IDI. The Dodd-Frank Act createda resolution regime, OLA, for BHCs and their affiliates thatare systemically important. Under OLA, the FDIC may be
appointed as receiver for the systemically important
institution and its failed non-bank subsidiaries if, upon therecommendation of applicable regulators, the U.S.
Secretary of the Treasury determines, among other things,
that the institution is in default or in danger of default, thatthe institution’s failure would have serious adverse effects
on the U.S. financial system and that resolution under OLA
would avoid or mitigate those effects.
If the FDIC is appointed as receiver under OLA, then the
powers of the receiver, and the rights and obligations ofcreditors and other parties who have dealt with theinstitution, would be determined under OLA, and notunder the bankruptcy or insolvency law that would
otherwise apply. The powers of the receiver under OLA are
generally based on the powers of the FDIC as receiver fordepository institutions under the FDIA, described below.

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Goldman Sachs 2021 Form 10-K

Substantial differences in the rights of creditors exist
between OLA and the U.S. Bankruptcy Code, including theright of the FDIC under OLA to disregard the strict priorityof creditor claims in some circumstances, the use of an
administrative claims procedure to determine creditors’
claims (as opposed to the judicial procedure utilized inbankruptcy proceedings), and the right of the FDIC totransfer claims to a “bridge” entity. In addition, OLA limits
the ability of creditors to enforce certain contractual crossdefaults against affiliates of the institution in receivership.
The FDIC has issued a notice that it would likely resolve a
failed FHC by transferring its assets to a “bridge” holding
company under its “single point of entry” or “SPOE”
strategy pursuant to OLA.
Under the FDIA, if the FDIC is appointed as conservator or
receiver for an IDI such as GS Bank USA, upon its
insolvency or in certain other events, the FDIC has broad
powers, including the power:‰ To transfer any of the IDI’s assets and liabilities to a new
obligor, including a newly formed “bridge” bank,without the approval of the depository institution’s
creditors;‰ To enforce the IDI’s contracts pursuant to their terms
without regard to any provisions triggered by theappointment of the FDIC in that capacity; or‰ To repudiate or disaffirm any contract or lease to which
the IDI is a party, the performance of which is determinedby the FDIC to be burdensome and the repudiation ordisaffirmance of which is determined by the FDIC topromote the orderly administration of the IDI.
In addition, the claims of holders of domestic deposit
liabilities and certain claims for administrative expenses
against an IDI would be afforded a priority over othergeneral unsecured claims, including deposits at non-U.S.
branches and claims of debtholders of the IDI, in the“liquidation or other resolution” of such an institution by
any receiver. As a result, whether or not the FDIC eversought to repudiate any debt obligations of GS Bank USA,the debtholders (other than depositors at U.S. branches)would be treated differently from, and could receive, if
anything, substantially less than, the depositors at U.S.
branches of GS Bank USA.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Deposit Insurance. Deposits at GS Bank USA have thebenefit of FDIC insurance up to the applicable limits. The
FDIC’s Deposit Insurance Fund is funded by assessments on
IDIs. GS Bank USA’s assessment (subject to adjustment by
the FDIC) is currently based on its average total
consolidated assets less its average tangible equity during
the assessment period, its supervisory ratings and specified
forward-looking financial measures used to calculate theassessment rate. The deposits of GSBE are covered by theGerman statutory deposit protection program to the extent
provided by law. In addition, GSBE has elected toparticipate in the German voluntary deposit protection
program which provides insurance for certain eligible
deposits not covered by the German statutory deposit
program. Deposits at GSIB are covered by the U.K.
Financial Services Compensation Scheme up to theapplicable limits.
Prompt Corrective Action. The U.S. Federal Deposit
Insurance Corporation Improvement Act of 1991 (FDICIA)
requires the U.S. federal bank regulatory agencies to take“prompt corrective action” in respect of depository
institutions that do not meet specified capital requirements.
FDICIA establishes five capital categories for FDIC-insured
banks, such as GS Bank USA: well-capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized
and critically undercapitalized.
An institution may be downgraded to, or deemed to be in, acapital category that is lower than is indicated by its capitalratios if it is determined to be in an unsafe or unsoundcondition or if it receives an unsatisfactory examination
rating with respect to certain matters. FDICIA imposes
progressively more restrictive constraints on operations,management and capital distributions, as the capital
category of an institution declines. Failure to meet thecapital requirements could also require a depository
institution to raise capital. Ultimately, criticallyundercapitalized institutions are subject to the appointmentof a receiver or conservator, as described in “Insolvency ofan IDI or a BHC” above.
The prompt corrective action regulations do not apply to
BHCs. However, the FRB is authorized to take appropriate
action at the BHC level, based upon the undercapitalized
status of the BHC’s depository institution subsidiaries. In
certain instances, relating to an undercapitalized depository
institution subsidiary, the BHC would be required toguarantee the performance of the undercapitalized
subsidiary’s capital restoration plan and might be liable forcivil money damages for failure to fulfill its commitmentson that guarantee. Furthermore, in the event of thebankruptcy of the BHC, the guarantee would take priority
over the BHC’s general unsecured creditors, as described in“Source of Strength” above.

Volcker Rule and Other Restrictions on Activities. As a
BHC, we are subject to limitations on the types of businessactivities in which we may engage.
Volcker Rule. The Volcker Rule prohibits “proprietary
trading,” but permits activities such as underwriting,market making and risk-mitigation hedging, requires anextensive compliance program and includes additional
reporting and record-keeping requirements.
In addition, the Volcker Rule limits the sponsorship of, andinvestment in, “covered funds” (as defined in the rule) bybanking entities, including us. It also limits certain types oftransactions between us and our sponsored and advised
funds, similar to the limitations on transactions between
depository institutions and their affiliates. Covered funds
include our private equity funds, certain of our credit andreal estate funds, our hedge funds and certain otherinvestment structures. The limitation on investments incovered funds requires us to limit our investment in eachsuch fund to 3% or less of the fund’s net asset value, and tolimit our aggregate investment in all such funds to 3% orless of our Tier 1 capital.
The FRB has extended the conformance period to July 2022
for our investments in, and relationships with, certain
legacy “illiquid funds” (as defined in the Volcker Rule) thatwere in place prior to December 2013. See Note 8 to theconsolidated financial statements in Part II, Item 8 of thisForm 10-K for further information about our investments
in such funds.
Other Restrictions. FHCs generally can engage in a
broader range of financial and related activities than areotherwise permissible for BHCs as long as they continue tomeet the eligibility requirements for FHCs. The broader
range of permissible activities for FHCs includes
underwriting, dealing and making markets in securities andmaking investments in non-FHCs (merchant banking
activities). In addition, certain FHCs, including us, arepermitted to engage in certain commodities activities in the
U.S. that may otherwise be impermissible for BHCs, so longas the assets held pursuant to these activities do not equal
5% or more of their consolidated assets.
The FRB, however, has the authority to limit an FHC’s
ability to conduct activities that would otherwise bepermissible, and will likely do so if the FHC does notsatisfactorily meet certain requirements of the FRB. For
example, if an FHC or any of its U.S. depository institution
subsidiaries ceases to maintain its status as well-capitalized
or well-managed, the FRB may impose corrective capital
and/or managerial requirements, as well as additional
limitations or conditions. If the deficiencies persist, the FHC
may be required to divest its U.S. depository institution
subsidiaries or to cease engaging in activities other than thebusiness of banking and certain closely related activities.
Goldman Sachs 2021 Form 10-K

19

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

If any IDI subsidiary of an FHC fails to maintain at least a“satisfactory” rating under the Community Reinvestment
Act, the FHC would be subject to restrictions on certain
new activities and acquisitions.
In addition, we are required to obtain prior FRB approval
before certain acquisitions and before engaging in certain
banking and other financial activities both within andoutside the U.S.
The FRB issued a proposed rule in September 2016 which,if adopted, would impose new requirements on the physicalcommodity activities and certain merchant banking
activities of FHCs, including, among other things,
additional capital requirements, stringent quantitative
limits on permissible physical trading activity, and new
public reporting requirements. At that time, the FRB
recommended that Congress repeal authorities for FHCs toengage in merchant banking activities and for certain FHCs
to engage in certain otherwise impermissible commodities
activities.
U.S. G-SIBs, like us, are also required to comply with a rule
regarding single counterparty credit limits, which imposes
more stringent requirements for credit exposures amongmajor financial institutions. The Dodd-Frank Act also
requires the FRB to implement early remediation
requirements, which were proposed in 2011 but not
finalized.
The New York State banking law imposes lending limits(which take into account credit exposure from derivativetransactions) and other requirements that could impact themanner and scope of GS Bank USA’s activities.
The U.S. federal bank regulatory agencies have issued
guidance that focuses on transaction structures and risk
management frameworks and that outlines high-level
principles for safe-and-sound leveraged lending, including
underwriting standards, valuation and stress testing. This
guidance has, among other things, limited the percentage
amount of debt that can be included in certain transactions.
As a German credit institution, GSBE will become subject
to Volcker Rule-type prohibitions under German banking
law and regulations once its financial assets exceed certain
thresholds. Prohibited activities will then include
proprietary trading, certain types of high-frequency trading
and certain types of lending and guarantee businesses withdefined prohibited counterparties, such as hedge funds andother highly leveraged funds, unless an exclusion or an
exemption applies. See “Volcker Rule” above for further
information.

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Goldman Sachs 2021 Form 10-K

U.K. banks that have over £25 billion of core retail deposits
are required to separate their retail banking services fromtheir investment and international banking activities,
commonly known as “ring-fencing.” GSIB is not currently
subject to the ring-fencing requirement, and if it were to
become subject to it, GSIB would need to make significant
operational and structural changes.
Broker-Dealer and Securities Regulation
Our broker-dealer subsidiaries are subject to regulations
that cover all aspects of the securities business, including
sales methods, trade practices, the use and safekeeping ofclients’ funds and securities, capital structure, recordkeeping, the financing of clients’ purchases, and the
conduct of directors, officers and employees. In the U.S., theSEC is the federal agency responsible for the administrationof the federal securities laws. GS&Co. is registered as a
broker-dealer, a securities-based swap dealer, a municipal
advisor and an investment adviser with the SEC and as a
broker-dealer in all 50 states and the District of Columbia.
U.S. self-regulatory organizations, such as FINRA and the
NYSE, adopt rules that apply to, and examine, brokerdealers such as GS&Co.
U.S. state securities and other U.S. regulators also haveregulatory or oversight authority over GS&Co. For a
description of net capital requirements applicable to
GS&Co., see “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — CapitalManagement and Regulatory Capital — U.S. Regulated
Broker-Dealer Subsidiaries” in Part II, Item 7 of thisForm 10-K.
The SEC issued a proposed rule in November 2021 which,if adopted, would require lenders of securities to provide
the material terms of securities lending transactions to aregistered national securities association, such as FINRA.
In Europe, we provide broker-dealer services, including
through GSBE (which is a credit institution), GSPIC and
GSI, that are subject to oversight by European and national
regulators. These services are regulated in accordance with
E.U., U.K. and national laws and regulations. These laws
require, among other things, compliance with certain
capital adequacy and liquidity standards, customer
protection requirements and market conduct and tradereporting rules. Certain of our European subsidiaries arealso regulated by the securities, derivatives andcommodities exchanges of which they are members.
GSJCL, our regulated Japanese broker-dealer, is subject tocapital requirements imposed by Japan’s Financial Services
Agency. GSJCL is also regulated by the Tokyo Stock
Exchange, the Bank of Japan and the Ministry of Finance,
among others.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe Securities and Futures Commission in Hong Kong, theChina Securities Regulatory Commission, the Reserve Bankof India, the Securities and Exchange Board of India, theAustralian Securities and Investments Commission, theAustralian Securities Exchange, the Monetary Authority ofSingapore, the Korean Financial Supervisory Service andthe Central Bank of Brazil, among others, regulate variousof our subsidiaries and also have capital standards andother requirements comparable to the rules of the U.S.
regulators.
Our exchange-based market-making activities are subject
to extensive regulation by a number of securities exchanges.
As a market maker on exchanges, we are required tomaintain orderly markets in the securities to which we areassigned.
In the E.U. and the U.K., the European Markets in Financial
Instruments Directive (MiFID II) includes extensive market
structure reforms, such as the establishment of new trading
venue categories for the purposes of discharging theobligation to trade OTC derivatives on a trading platformand enhanced pre- and post-trade transparency covering awider range of financial instruments. In equities, MiFID II
introduced volume caps on non-transparent liquidity
trading for trading venues, limited the use of broker-dealer
crossing networks and created a new regime for systematicinternalizers, which are investment firms that execute clienttransactions outside a trading venue. Additional control
requirements were introduced for algorithmic trading, highfrequency trading and direct electronic access.
Commodities trading firms are required to calculate theirpositions and adhere to specific position limits. Other
reforms include enhanced transaction reporting, thepublication of best execution data by investment firms andtrading venues, transparency on costs and charges of service
to investors, changes to the way investment managers canpay for the receipt of investment research, rules limiting thepayment and receipt of soft commissions and other forms
of inducements, and mandatory unbundling for brokerdealers between execution and other major services.

The SEC, FINRA and regulators in various non-U.S.
jurisdictions have imposed both conduct-based anddisclosure-based requirements with respect to research
reports and research analysts and may impose additional
regulations.
GS&Co., GS Bank USA and other U.S. subsidiaries are also
subject to rules adopted by U.S. federal agencies pursuant
to the Dodd-Frank Act that require any person who
organizes or initiates certain asset-backed securities
transactions to retain a portion (generally, at least five
percent) of any credit risk that the person conveys to a third
party. For certain securitization transactions, retention by
third-party purchasers may satisfy this requirement.
Certain of our non-U.S. subsidiaries, including GSI, aresubject to risk retention requirements in connection withsecuritization activities.
Swaps, Derivatives and Commodities Regulation
The commodity futures, commodity options and swaps
industry in the U.S. is subject to regulation under the U.S.
Commodity Exchange Act (CEA). The CFTC is the U.S.
federal agency charged with the administration of the CEA.
In addition, the SEC is the U.S. federal agency charged withthe regulation of security-based swaps. The rules andregulations of various self-regulatory organizations, such as
the Chicago Mercantile Exchange, other futures exchanges
and the National Futures Association, also govern
commodity futures, commodity options and swaps
activities.
The terms “swaps” and “security-based swaps” include awide variety of derivative instruments in addition to thoseconventionally referred to as swaps (including certain
forward contracts and options), and relate to a wide varietyof underlying assets or obligations, including currencies,
commodities, interest or other monetary rates, yields,
indices, securities, credit events, loans and other financial
obligations.

The SEC requires broker-dealers to act in the best interest of
their customers. Additionally, SEC rules require brokerdealers to provide a standardized, short-form disclosure
highlighting services offered, applicable standards ofconduct, fees and costs, the differences between brokerage
and advisory services, and any conflicts of interest. Several
states have adopted or proposed adopting uniform
fiduciary duty standards applicable to broker-dealers.

Goldman Sachs 2021 Form 10-K

21

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESCFTC rules require registration of swap dealers, mandatory
clearing and execution of interest rate and credit default
swaps and real-time public reporting and adherence tobusiness conduct standards for all in-scope swaps. A
number of these requirements, particularly those regarding
recordkeeping and reporting, also apply to transactions
that do not involve a registered swap dealer. GS&Co. andother subsidiaries, including GS Bank USA, GSBE, GSI and
J. Aron, are registered with the CFTC as swap dealers.
CFTC rules establishing capital requirements for swap
dealers that are not subject to the capital rules of aprudential regulator, such as the FRB, became effective in
October 2021. The CFTC has also adopted financial
reporting requirements for covered swap entities andamended existing capital rules for CFTC-registered futurescommission merchants to provide explicit capitalrequirements for proprietary positions in swaps andsecurity-based swaps that are not cleared by a clearingorganization. Certain of our registered swap dealers,
including J. Aron, are subject to the CFTC’s capitalrequirements.
Our affiliates registered as swap dealers are subject to themargin rules issued by the CFTC (in the case of ournon-bank swap dealers) and the FRB (in the case of GS
Bank USA and GSBE). The rules for variation margin havebecome effective, and those for initial margin are in theprocess of being phased in through September 2022,
depending on certain activity levels of the swap dealer andthe relevant counterparty. Inter-affiliate transactions under
the CFTC and FRB margin rules are generally exempt frominitial margin requirements.
SEC rules govern the registration and regulation of securitybased swap dealers. Security-based swaps are defined as
swaps on single securities, single loans or narrow-based
baskets or indices of securities. The SEC has adopted anumber of rules for security-based swap dealers, including(i) capital, margin and segregation requirements; (ii) recordkeeping, financial reporting and notification requirements;(iii) business conduct standards; (iv) regulatory and publictrade reporting; and (v) the application of risk mitigation
techniques to uncleared portfolios of security-based swaps.
The compliance date for these SEC rules, as well as SEC
rules addressing registration requirements and businessconduct standards, was generally October 2021. In the
fourth quarter of 2021, certain of our subsidiaries,
including GS&Co., registered with the SEC as securitybased swap dealers and became subject to the SEC’s
regulations regarding security-based swaps. The SEC has
recently proposed additional regulations regarding securitybased swaps that would, among other things, require public
reporting of large positions in security-based swaps.

22

Goldman Sachs 2021 Form 10-K

The CFTC and the SEC have adopted rules relating tocross-border regulation of swaps, securities-based swaps,
business conduct and registration requirements. The CFTCand the SEC have entered into agreements with certain
non-U.S. regulators regarding the cross-border regulationof derivatives and the mutual recognition of cross-border
execution facilities and clearing houses, and have approved
substituted compliance with certain non-U.S. regulations
related to certain business conduct requirements andmargin rules. The U.S. prudential regulators have not yet
made a determination with respect to substitutedcompliance for transactions subject to non-U.S. margin
rules.
Similar types of regulation have been proposed or adopted
in jurisdictions outside the U.S., including in the E.U. andJapan. Under the European Market Infrastructure
Regulation (EMIR), for example, the E.U. and the U.K.
have established regulatory requirements relating toportfolio reconciliation and reporting, clearing certain
OTC derivatives and margining for uncleared derivatives
activities. In addition, under the European Markets in
Financial Instruments Directive and Regulation,transactions in certain types of derivatives are required to
be executed on regulated platforms or exchanges.
The CFTC has adopted rules that limit the size of positions
in physical commodity derivatives that can be held by any
entity, or any group of affiliates or other parties trading
under common ownership or control. Swap dealers may
currently claim an exemption from the position limits forthe bona fide hedging of swap-related risks, but thisexemption will be eliminated in 2023. The CFTC position
limits apply to futures on physical commodities and options
on such futures, and these limits apply to both physicallyand cash settled positions. In addition, in 2023, the position
limit rules will become applicable to swaps that areeconomically equivalent to such futures and options. The
position limit rules initially impose limits in the spot month
only (i.e., during the delivery period for the physicalcommodities, which is typically a period of several days).
CFTC spot and non- spot month limits will continue toapply to futures on certain legacy agricultural commodities,
and it is possible that non-spot month limits will at somepoint be adopted for other categories of commodities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

J. Aron is authorized by the U.S. Federal Energy Regulatory
Commission (FERC) to sell wholesale physical power atmarket-based rates. As a FERC-authorized power
marketer, J. Aron is subject to regulation under the U.S.
Federal Power Act and FERC regulations and to theoversight of FERC. As a result of our investing activities,
Group Inc. is also an “exempt holding company” under the
U.S. Public Utility Holding Company Act of 2005 andapplicable FERC rules.
In addition, as a result of our power-related andcommodities activities, we are subject to energy,
environmental and other governmental laws andregulations, as described in “Risk Factors — Our
commodities activities, particularly our physicalcommodities activities, subject us to extensive regulationand involve certain potential risks, including
environmental, reputational and other risks, that may
expose us to significant liabilities and costs” in Part I,
Item 1A of this Form 10-K.
GS&Co. is registered with the CFTC as a futurescommission merchant, and several of our subsidiaries,
including GS&Co., are registered with the CFTC and act ascommodity pool operators and commodity trading
advisors. Goldman Sachs Financial Markets, L.P. isregistered with the SEC as an OTC derivatives dealer.
Asset Management and Wealth Management
Regulation
Our asset management and wealth management businesses
are subject to extensive oversight by regulators around theworld relating to, among other things, the fair treatment ofclients, safeguarding of client assets, offerings of funds,
marketing activities, transactions among affiliates and ourmanagement of client funds.
Interpretations issued by the SEC clarify the SEC’s views of
the existing fiduciary duty owed by investment advisers totheir clients. Additionally, SEC rules require investment
advisers to provide a standardized, short-form disclosure
highlighting services offered, applicable standards ofconduct, fees and costs, the differences between brokerage
and advisory services, and any conflicts of interest. Several
states have adopted or proposed adopting uniform
fiduciary duty standards applicable to advisers.
Certain of our European subsidiaries, including GSBE in
the E.U. and GSAMI in the U.K., are subject to MiFID II
and/or related regulations (including the U.K. legislation
making such regulations part of U.K. law), which govern
the approval, organizational, marketing and reporting
requirements of U.K. or E.U.-based investment managers
and the ability of investment fund managers located outside
the E.U. or the U.K. to access those markets. Our asset
management business in the U.K. and the E.U. significantly
depends on our ability to delegate parts of our activities toother affiliates.

On January 1, 2022, GSAMI became subject to a newprudential regime for U.K. investment firms, the Investment
Firms Prudential Regime (IFPR), which governs theprudential requirements for U.K. investment firms
prudentially regulated by the FCA.
Consumer Regulation
Our U.S. consumer-oriented activities are subject tosupervision and regulation by the CFPB with respect tofederal consumer protection laws, including laws relating tofair lending and the prohibition of unfair, deceptive or
abusive acts or practices in connection with the offer, saleor provision of consumer financial products and services.
Our consumer-oriented activities are also subject to various
state and local consumer protection laws, rules andregulations, which, among other things, impose obligations
relating to marketing, origination, servicing and collections
activities in our consumer businesses. Many of these laws,
rules and regulations also apply to our small business
lending activities, which are also subject to supervision andregulation by federal and state regulators. In addition, our
U.K. consumer deposit-taking activities are subject toconsumer protection regulations.
Compensation Practices
Our compensation practices are subject to oversight by the
FRB and, with respect to some of our subsidiaries andemployees, by other regulatory bodies worldwide.
The FSB has released standards for implementation by local
regulators that are designed to encourage soundcompensation practices at banks and other financial
companies. The U.S. federal bank regulatory agencies havealso provided guidance designed to ensure that incentive
compensation arrangements at banking organizations take
into account risk and are consistent with safe and soundpractices. The guidance sets forth the following three key
principles with respect to incentive compensation
arrangements: (i) the arrangements should provide
employees with incentives that appropriately balance risk
and financial results in a manner that does not encourage
employees to expose their organizations to imprudent risk;(ii) the arrangements should be compatible with effective
controls and risk management; and (iii) the arrangements
should be supported by strong corporate governance. The
guidance provides that supervisory findings with respect toincentive compensation will be incorporated, as
appropriate, into the organization’s supervisory ratings,
which can affect its ability to make acquisitions or perform
other actions. The guidance also notes that enforcement
actions may be taken against a banking organization if its
incentive compensation arrangements or related risk
management, control or governance processes pose a risk to
the organization’s safety and soundness.

Goldman Sachs 2021 Form 10-K

23

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe Dodd-Frank Act requires U.S. financial regulators,
including the FRB and SEC, to adopt rules on incentivebased payment arrangements at specified regulated entities
having at least $1 billion in total assets. The U.S. financial
regulators proposed revised rules in 2016, which have notbeen finalized.
The NYDFS’ guidance emphasizes that any incentive
compensation arrangements tied to employee performanceindicators at banking institutions regulated by the NYDFS,
including GS Bank USA, must be subject to effective risk
management, oversight and control.
In the E.U., certain provisions in the CRR and CRD aredesigned to meet the FSB’s compensation standards. These
provisions limit the ratio of variable to fixed compensationof all employees at GSBE and of certain employees at ourother operating subsidiaries in the E.U., including those
employees identified as having a material impact on the risk
profile of regulated entities. CRR II and CRD V amended
certain aspects of these rules, including, by increasing
minimum variable compensation deferral periods.
Substantially similar requirements apply in the U.K. in
relation to GSI and GSIB.
The E.U. has also introduced rules regulating compensation
for certain persons providing services to certain investment
funds.
Anti-Money Laundering and Anti-Bribery Rules andRegulations
The U.S. Bank Secrecy Act, as amended (BSA), including by
the USA PATRIOT Act of 2001, contains anti-money
laundering and financial transparency laws and authorizes
or mandates the promulgation of various regulations
applicable to financial institutions, including standards forverifying client identification at account opening, andobligations to monitor client transactions and reportsuspicious activities. Through these and other provisions,
the BSA seeks, among other things, to promote theidentification of parties that may be involved in terrorism,
money laundering or other suspicious activities.

24

Goldman Sachs 2021 Form 10-K

The Anti-Money Laundering Act of 2020 (AMLA), whichamends the BSA, was enacted in January 2021. The AMLA
is intended to comprehensively reform and modernize U.S.
anti-money laundering laws. Among other things, theAMLA codifies a risk-based approach to anti-money
laundering compliance for financial institutions; requires
the U.S. Department of the Treasury to promulgate
priorities for anti-money laundering and countering thefinancing of terrorism policy; requires the development ofstandards by the U.S. Department of the Treasury fortesting technology and internal processes for BSA
compliance; expands enforcement- and investigationrelated authority, including a significant expansion in theavailable sanctions for certain BSA violations; and expands
BSA whistleblower incentives and protections. Many of thestatutory provisions in the AMLA will require additionalrulemakings, reports and other measures, and the impact of
the AMLA will depend on, among other things, rulemaking
and implementation guidance. In June 2021, the Financial
Crimes Enforcement Network (FinCEN), a bureau of the
U.S. Department of Treasury, issued the priorities for antimoney laundering and countering the financing ofterrorism policy, as required under the AMLA. The
priorities include: corruption, cybercrime, terrorist
financing, fraud, transnational crime, drug trafficking,human trafficking and proliferation financing.
We are subject to other laws and regulations worldwide
relating to anti-money laundering and financialtransparency, including the E.U. Anti-Money Laundering
Directives. In addition, we are subject to the U.S. Foreign
Corrupt Practices Act (FCPA), the U.K. Bribery Act andother laws and regulations worldwide regarding corrupt
and illegal payments, or providing anything of value, forthe benefit of government officials and others. The scope ofthe types of payments or other benefits covered by theselaws is very broad. These laws and regulations include
requirements relating to the identification of clients,
monitoring for and reporting suspicious transactions,monitoring direct and indirect payments to politically
exposed persons, providing information to regulatory
authorities and law enforcement agencies, and sharing
information with other financial institutions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Privacy and Cyber Security Regulation
Our businesses are subject to numerous laws andregulations relating to the privacy of information regarding
clients, employees and others. These include the GLB Act,
the E.U.’s General Data Protection Regulation (GDPR), theU.K.’s Data Protection Act 2018, the Japanese Personal
Information Protection Act, the Personal Information
Protection Law of the People’s Republic of China (PIPL),
the Hong Kong Personal Data (Privacy) Ordinance, and theCalifornia Consumer Privacy Act of 2018 (CCPA). The
GDPR has heightened our privacy compliance obligations,
impacted certain of our businesses’ collection, processing
and retention of personal data and imposed strict standards
for reporting data breaches. The GDPR also provides for
significant penalties for non-compliance. In addition, the
CCPA imposes compliance obligations with regard to thecollection, use and disclosure of personal information. The
CCPA was amended in 2020 by the California Privacy
Rights Act (CPRA), which, among other things, will
expand the scope of data subject to the CCPA when the
CPRA becomes effective on January 1, 2023. In addition,
several other states and non-U.S. jurisdictions have enacted,
or are proposing, privacy and data protection laws similar
to the GDPR and the CCPA. The PIPL, which went into
effect on November 1, 2021, limits the legal bases forprocessing personal information, contains heightened
notice and consent requirements for the handling of certain
types of personal information and imposes special crossborder data transfer rules under certain circumstances.
The NYDFS also requires financial institutions regulated by
the NYDFS, including GS Bank USA, to, among otherthings, (i) establish and maintain a cyber security program
designed to ensure the confidentiality, integrity andavailability of their information systems; (ii) implement andmaintain a written cyber security policy setting forthpolicies and procedures for the protection of theirinformation systems and nonpublic information; and(iii) designate a Chief Information Security Officer.
In November 2021, the U.S. federal bank regulatory
agencies adopted a rule regarding notification requirements
for banking organizations related to significant computersecurity incidents. Under the final rule, a BHC or state
member bank, such as Group Inc. or GS Bank USA, isrequired to notify its primary regulator within 36 hours ofincidents that have materially disrupted or degraded, or arereasonably likely to materially disrupt or degrade, thebanking organization’s ability to deliver services to amaterial portion of its customer base, jeopardize theviability of key operations of the banking organization, orpose a threat to the financial stability of the United States.
The rule is effective April 1, 2022, with compliancerequired by May 1, 2022.

Information about our Executive Officers
Set forth below are the name, age, present title, principal
occupation and certain biographical information for the
executive officers who have been appointed by, and serve at
the pleasure of, Group Inc.’s Board.
Philip R. Berlinski, 45
Mr. Berlinski has been Global Treasurer since
October 2021; he also serves as Chief Executive Officer ofGoldman Sachs Bank USA. He had previously served as
Chief Operating Officer of Global Equities from May 2019.
Prior to that, he was Co-Head of Global Equities Tradingand Execution Services from September 2016 to May 2019.
Denis P. Coleman III, 48
Mr. Coleman has been Chief Financial Officer since
January 2022. He had previously served as Deputy Chief
Financial Officer from September 2021 and, prior to that,
Co-Head of the Global Financing Group from June 2018 toSeptember 2021. From 2016 to June 2018, he was Head of
the EMEA Financing Group, and from 2009 to 2016 he
was Head of EMEA Credit Finance in London.
Sheara J. Fredman, 46
Ms. Fredman has been Controller and Chief Accounting
Officer since November 2019. She had previously served as
Head of Regulatory Controllers from September 2017 and,prior to that, she had served as Global Product Controller.
Brian J. Lee, 55
Mr. Lee has been Chief Risk Officer since November 2019.
He had previously served as Controller and Chief
Accounting Officer from March 2017 and, prior to that, he
had served as Deputy Controller from 2014.
Ericka T. Leslie, 51
Ms. Leslie has been Chief Administrative Officer since
February 18, 2022. She had previously served as Global
Head of Operations and Platform Engineering for the
Global Markets Division from March 2020, as Global
Head of Operations for the Securities Division fromJanuary 2019 and as Head of Global Operations for the
Commodities business from September 2008.
John F.W. Rogers, 65
Mr. Rogers has been an Executive Vice President sinceApril 2011 and Chief of Staff and Secretary to the Board
since December 2001.

Goldman Sachs 2021 Form 10-K

25

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Kathryn H. Ruemmler, 50
Ms. Ruemmler has been the Chief Legal Officer, GeneralCounsel and Secretary since March 2021, and waspreviously Global Head of Regulatory Affairs from
April 2020. From June 2014 to April 2020, Ms. Ruemmler
was a Litigation Partner at Latham & Watkins LLP, aglobal law firm, where she was Global Chair of the White
Collar Defense and Investigations practice.
David Solomon, 60
Mr. Solomon has been Chairman of the Board since
January 2019 and Chief Executive Officer and a director
since October 2018. He had previously served as President
and Chief or Co-Chief Operating Officer fromJanuary 2017 and Co-Head of the Investment Banking
Division from July 2006 to December 2016.
John E. Waldron, 52
Mr. Waldron has been President and Chief Operating
Officer since October 2018. He had previously served as
Co-Head of the Investment Banking Division from
December 2014. Prior to that he was Global Head ofInvestment Banking Services/Client Coverage for theInvestment Banking Division and had oversight of theInvestment Banking Services Leadership Group, and from2007 to 2009 was Global Co-Head of the Financial
Sponsors Group.

Available Information
Our internet address is www.goldmansachs.com and theinvestor relations section of our website is located atwww.goldmansachs.com/investor-relations, where we
make available, free of charge, our annual reports on
Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act, as well as proxy statements, as soon asreasonably practicable after we electronically file suchmaterial with, or furnish it to, the SEC. Also posted on our
website, and available in print upon request of any
shareholder to our Investor Relations Department (Investor
Relations), are our certificate of incorporation and by-laws,
charters for our Audit, Risk, Compensation, Corporate
Governance and Nominating, and Public Responsibilities
Committees, our Policy Regarding Director Independence
Determinations, our Policy on Reporting of Concerns
Regarding Accounting and Other Matters, our Corporate
Governance Guidelines and our Code of Business Conduct
and Ethics governing our directors, officers and employees.
Within the time period required by the SEC, we will post on
our website any amendment to the Code of BusinessConduct and Ethics and any waiver applicable to any
executive officer, director or senior financial officer.
26

Goldman Sachs 2021 Form 10-K

Our website also includes information about (i) purchases
and sales of our equity securities by our executive officers
and directors; (ii) disclosure relating to certain non-GAAP
financial measures (as defined in the SEC’s Regulation G)
that we may make public orally, telephonically, by webcast,by broadcast or by other means; (iii) DFAST results; (iv) the
public portion of our resolution plan submission; (v) our
Pillar 3 disclosure; (vi) our average daily LCR; (vii) our
People Strategy Report; (viii) our Sustainability Report; and(ix) our Task Force on Climate-Related Financial
Disclosures (TCFD) Report.
Investor Relations can be contacted at The Goldman Sachs
Group, Inc., 200 West Street, 29th Floor, New York, NewYork 10282, Attn: Investor Relations, telephone:212-902-0300, e-mail: gs-investor-relations@gs.com. We
use the following, as well as other social media channels, todisclose public information to investors, the media andothers:‰ Our website (www.goldmansachs.com);‰ Our Twitter account (twitter.com/GoldmanSachs); and‰ Our Instagram account (instagram.com/GoldmanSachs).
Our officers may use similar social media channels to disclose
public information. It is possible that certain information weor our officers post on our website and on social media could
be deemed material, and we encourage investors, the media
and others interested in Goldman Sachs to review the businessand financial information we or our officers post on our
website and on the social media channels identified above. The
information on our website and those social media channels is
not incorporated by reference into this Form 10-K.

Forward-Looking Statements
We have included in this Form 10-K, and our management
may make, statements that may constitute “forward-looking
statements” within the meaning of the safe harbor provisionsof the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements are not historical facts orstatements of current conditions, but instead represent only
our beliefs regarding future events, many of which, by theirnature, are inherently uncertain and outside our control.
By identifying these statements for you in this manner, we
are alerting you to the possibility that our actual results,financial condition, liquidity and capital actions may differ,possibly materially, from the anticipated results, financial
condition, liquidity and capital actions in these forwardlooking statements. Important factors that could cause ourresults, financial condition, liquidity and capital actions todiffer from those in these statements include, among others,
those described below and in “Risk Factors” in Part I,
Item 1A of this Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

These statements may relate to, among other things, (i) our
future plans and results, including our target ROE, ROTE,
efficiency ratio, CET1 capital ratio and firmwide assets under
supervision (AUS) inflows, and how they can be achieved,(ii) trends in or growth opportunities for our businesses,
including the timing, costs, profitability, benefits and otheraspects of business and strategic initiatives and their impact on
our efficiency ratio, (iii) our level of future compensation
expense, including as a percentage of both operating expenses
and revenues net of provision for credit losses, (iv) ourinvestment banking transaction backlog and future results,(v) our expected interest income and interest expense, (vi) our
expense savings and strategic locations initiatives,(vii) expenses we may incur, including future litigation expenseand expenses from investing in our consumer and transaction
banking businesses, (viii) the projected growth of our deposits
and other funding, asset liability management and funding
strategies and related interest expense savings, (ix) our
business initiatives, including transaction banking and new
consumer financial products, (x) our planned 2022
benchmark debt issuances, (xi) the amount, composition andlocation of global core liquid assets (GCLA) we expect to hold,(xii) our credit exposures, (xiii) our expected provisions for
credit losses, (xiv) the adequacy of our allowance for credit
losses, (xv) the projected growth of our consumer lending andcredit card businesses, (xvi) the objectives and effectiveness ofour business continuity plan (BCP), information security
program, risk management and liquidity policies, (xvii) ourresolution plan and strategy and their implications forstakeholders, (xviii) the design and effectiveness of ourresolution capital and liquidity models and triggers and alerts
framework, (xix) the results of stress tests, the effect of changes
to regulations, and our future status, activities or reporting
under banking and financial regulation, (xx) our expected tax
rate, (xxi) the future state of our liquidity and regulatory
capital ratios, and our prospective capital distributions(including dividends and repurchases), (xxii) our expected SCB
and G-SIB surcharge, (xxiii) legal proceedings, governmental
investigations or other contingencies, (xxiv) the asset recovery
guarantee and our remediation activities related to our
1Malaysia Development Berhad (1MDB) settlements,(xxv) the replacement of IBORs and our transition toalternative risk-free reference rates, (xxvi) the impact of the
COVID-19 pandemic on our business, results, financial
position and liquidity, (xxvii) the effectiveness of ourmanagement of our human capital, including our diversity
goals, (xxviii) our sustainability and carbon neutrality targets
and goals, (xxix) our plans for our people to return to ouroffices, (xxx) future inflation and (xxxi) our completed,announced and prospective acquisitions, including ourcompleted acquisition of the General Motors co-brandedcredit card portfolio and our announced acquisitions of NN
Investment Partners and GreenSky.

Statements about our target return on average commonshareholders’ equity (ROE), return on average tangible
common shareholders’ equity (ROTE), efficiency ratio andexpense savings, and how they can be achieved, are basedon our current expectations regarding our businessprospects and are subject to the risk that we may be unable
to achieve our targets due to, among other things, changes
in our business mix, lower profitability of new businessinitiatives, increases in technology and other costs to launchand bring new business initiatives to scale, and increases inliquidity requirements.
Statements about our target ROE, ROTE and CET1 capitalratio, and how they can be achieved, are based on ourcurrent expectations regarding the capital requirements
applicable to us and are subject to the risk that our actual
capital requirements may be higher than currently
anticipated because of, among other factors, changes in theregulatory capital requirements applicable to us resulting
from changes in regulations or the interpretation orapplication of existing regulations or changes in the natureand composition of our activities. Statements about our
firmwide AUS inflows targets are based on our current
expectations regarding our fundraising prospects and are
subject to the risk that actual inflows may be lower than
expected due to, among other factors, competition fromother asset managers, changes in investment preferences
and changes in economic or market conditions.
Statements about the timing, costs, profitability, benefits
and other aspects of business and expense savings
initiatives, the level and composition of more durable
revenues and increases in market share are based on ourcurrent expectations regarding our ability to implement
these initiatives and actual results may differ, possibly
materially, from current expectations due to, among otherthings, a delay in the timing of these initiatives, increased
competition and an inability to reduce expenses and growbusinesses with durable revenues.
Statements about the level of future compensation expense,
including as a percentage of both operating expenses andrevenues net of provision for credit losses, and our
efficiency ratio as our platform business initiatives reachscale are subject to the risks that the compensation andother costs to operate our businesses, including platform
initiatives, may be greater than currently expected.

Goldman Sachs 2021 Form 10-K

27

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESStatements about our investment banking transaction
backlog and future results are subject to the risk that suchtransactions may be modified or may not be completed at
all and related net revenues may not be realized or may bematerially less than expected. Important factors that could
have such a result include, for underwriting transactions, adecline or weakness in general economic conditions, anoutbreak of hostilities, volatility in the securities markets oran adverse development with respect to the issuer of the
securities and, for financial advisory transactions, a decline
in the securities markets, an inability to obtain adequate
financing, an adverse development with respect to a party
to the transaction or a failure to obtain a required
regulatory approval. For information about otherimportant factors that could adversely affect ourinvestment banking transactions, see “Risk Factors” inPart I, Item 1A of this Form 10-K.
Statements about the projected growth of our deposits andother funding, asset liability management and funding
strategies and related interest expense savings, and ourconsumer lending and credit card businesses, are subject tothe risk that actual growth and savings may differ, possibly
materially, from that currently anticipated due to, among
other things, changes in interest rates and competition fromother similar products.
Statements about planned 2022 benchmark debt issuances
and the amount, composition and location of GCLA we
expect to hold are subject to the risk that actual issuancesand GCLA levels may differ, possibly materially, from thatcurrently expected due to changes in market conditions,business opportunities or our funding and projectedliquidity needs.
Statements about our expected provisions for credit losses
are subject to the risk that actual credit losses may differ
and our expectations may change, possibly materially, fromthat currently anticipated due to, among other things,
changes to the composition of our loan portfolio andchanges in the economic environment in future periods andour forecasts of future economic conditions, as well aschanges in our models, policies and other management
judgments.
Statements about our future effective income tax rate aresubject to the risk that it may differ from the anticipatedrate indicated in such statements, possibly materially, due
to, among other things, changes in the tax rates applicable
to us, changes in our earnings mix, our profitability andentities in which we generate profits, the assumptions wehave made in forecasting our expected tax rate, theinterpretation or application of existing tax statutes andregulations, as well as any corporate tax legislation that
may be enacted or any guidance that may be issued by the
U.S. Internal Revenue Service.
28

Goldman Sachs 2021 Form 10-K

Statements about the future state of our liquidity andregulatory capital ratios (including our SCB and G-SIB
surcharge), and our prospective capital distributions(including dividends and repurchases), are subject to therisk that our actual liquidity, regulatory capital ratios andcapital distributions may differ, possibly materially, fromwhat is currently expected due to, among other things, theneed to use capital to support clients, increased regulatory
requirements resulting from changes in regulations or theinterpretation or application of existing regulations, resultsof applicable supervisory stress tests and changes to thecomposition of our balance sheet.
Statements about the risk exposure related to the asset
recovery guarantee provided to the Government of
Malaysia are subject to the risk that the actual value of, or
credit received for, assets and proceeds from assets seized
and returned to the Government of Malaysia may be lessthan currently anticipated. Statements about the progressor the status of remediation activities relating to 1MDB are
based on our expectations regarding our current
remediation plans. Accordingly, our ability to complete theremediation activities may change, possibly materially,
from what is currently expected.
Statements about our objectives in management of our humancapital, including our diversity goals, are based on our current
expectations and are subject to the risk that we may notachieve these objectives and goals due to, among other things,
competition in recruiting and attracting diverse candidates andunsuccessful efforts in retaining diverse employees.
Statements about our sustainability and carbon neutrality
targets and goals are based on our current expectations andare subject to the risk that we may not achieve these targets
and goals due to, among other things, global sociodemographic and economic trends, energy prices, lack oftechnological innovations, climate-related conditions andweather events, legislative and regulatory changes, andother unforeseen events or conditions.
Statements about our plans for our people to return to ouroffices are based on our current expectations and that return
may be delayed due to, among other factors, future events thatare unpredictable, including the course of the COVID-19
pandemic, responses of governmental authorities, theemergence of new variants of COVID-19 and the effectivenessof vaccines over the long term and against new variants.
Statements about future inflation are subject to the risk that
actual inflation may differ, possibly materially, due to,among other things, changes in economic growth,
unemployment or consumer demand.
Statements about our announced acquisitions of NN
Investment Partners and GreenSky are subject to the riskthat the transaction may not close on the timeline
contemplated or at all, including due to a failure to obtainrequisite regulatory approval.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Item 1A.

Risk Factors

We face a variety of risks that are substantial and inherent
in our businesses.
The following is a summary of some of the more importantfactors that could affect our businesses:
Market‰ Our businesses have been and may in the future be
adversely affected by conditions in the global financial
markets and broader economic conditions.
‰ Our businesses have been and may in the future be
adversely affected by declining asset values, particularly
where we have net “long” positions, receive fees based on
the value of assets managed, or receive or post collateral.
‰ Our market-making activities have been and may in the
future be affected by changes in the levels of market
volatility.
‰ Our investment banking, client intermediation, asset
management and wealth management businesses havebeen adversely affected and may in the future be adversely
affected by market uncertainty or lack of confidence
among investors and CEOs due to declines in economic
activity and other unfavorable economic, geopolitical ormarket conditions.
‰ Our asset management and wealth managementbusinesses have been and may in the future be adversely
affected by the poor investment performance of ourinvestment products or a client preference for products
other than those which we offer or for products thatgenerate lower fees.
Liquidity‰ Our liquidity, profitability and businesses may be
adversely affected by an inability to access the debt capital
markets or to sell assets.
‰ Our businesses have been and may in the future be
adversely affected by disruptions or lack of liquidity in thecredit markets, including reduced access to credit andhigher costs of obtaining credit.
‰ Reductions in our credit ratings or an increase in ourcredit spreads may adversely affect our liquidity and costof funding.
‰ Group Inc. is a holding company and its liquidity depends
on payments from its subsidiaries, many of which are
subject to legal, regulatory and other restrictions onproviding funds or assets to Group Inc.

Credit‰ Our businesses, profitability and liquidity may be
adversely affected by deterioration in the credit quality ofor defaults by third parties.
‰ Concentration of risk increases the potential forsignificant losses in our market-making, underwriting,investing and financing activities.
‰ Derivative transactions and delayed documentation orsettlements may expose us to credit risk, unexpected risks
and potential losses.
Operational‰ A failure in our operational systems or infrastructure, or
those of third parties, as well as human error, malfeasanceor other misconduct, could impair our liquidity, disrupt
our businesses, result in the disclosure of confidential
information, damage our reputation and cause losses.
‰ A failure to protect our computer systems, networks andinformation, and our clients’ information, against cyberattacks and similar threats could impair our ability to
conduct our businesses, result in the disclosure, theft or
destruction of confidential information, damage our
reputation and cause losses.
‰ We may incur losses as a result of ineffective risk
management processes and strategies.
‰ We may incur losses as a result of unforeseen or
catastrophic events, including pandemics, terrorist
attacks, extreme weather events or other natural
disasters.
‰ Climate change could disrupt our businesses andadversely affect client activity levels and thecreditworthiness of our clients and counterparties, andour efforts to address concerns relating to climate change
could result in damage to our reputation.
Legal and Regulatory‰ Our businesses and those of our clients are subject toextensive and pervasive regulation around the world.
‰ A failure to appropriately identify and address potential
conflicts of interest could adversely affect our businesses.
‰ We may be adversely affected by increased governmental
and regulatory scrutiny or negative publicity.
‰ Substantial civil or criminal liability or significant
regulatory action against us could have material adverse
financial effects or cause us significant reputational harm,
which in turn could seriously harm our businessprospects.

Goldman Sachs 2021 Form 10-K

29

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES‰ In conducting our businesses around the world, we aresubject to political, legal, regulatory and other risks thatare inherent in operating in many countries.
‰ The application of regulatory strategies and requirementsin the U.S. and non-U.S. jurisdictions to facilitate theorderly resolution of large financial institutions could
create greater risk of loss for Group Inc.’s security
holders.
‰ The application of Group Inc.’s proposed resolution
strategy could result in greater losses for Group Inc.’s
security holders.
‰ Our commodities activities, particularly our physicalcommodities activities, subject us to extensive regulationand involve certain potential risks, including
environmental, reputational and other risks that may
expose us to significant liabilities and costs.
Competition‰ Our results have been and may in the future be adversely
affected by the composition of our client base.
‰ The financial services industry is highly competitive.
‰ The growth of electronic trading and the introduction of
new products and technologies, including trading
technologies and cryptocurrencies, has increased
competition.
‰ Our businesses would be adversely affected if we areunable to hire and retain qualified employees.
Market Developments and General Business
Environment‰ Our businesses, financial condition, liquidity and resultsof operations have been and may in the future be
adversely affected by the COVID-19 pandemic.
‰ Certain of our businesses, our funding instruments andfinancial products may be adversely affected by changes
in or the discontinuance of Interbank Offered Rates(IBORs), in particular LIBOR.
‰ Certain of our businesses and our funding instruments
may be adversely affected by changes in other reference
rates, currencies, indexes, baskets or ETFs to which
products we offer or funding that we raise are linked.
‰ We face enhanced risks as new business initiatives andacquisitions lead us to engage in new activities, operate in
new locations, transact with a broader array of clientsand counterparties and expose us to new asset classes andnew markets.
‰ We may not be able to fully realize the expected benefits
or synergies from acquisitions in the time frames we
expect, or at all.

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Goldman Sachs 2021 Form 10-K

The following are detailed descriptions of our Risk Factors
summarized above:

MarketOur businesses have been and may in the future be
adversely affected by conditions in the global
financial markets and broader economic conditions.
Many of our businesses, by their nature, do not produce
predictable earnings, and all of our businesses arematerially affected by conditions in the global financial
markets and economic conditions generally, both directly
and through their impact on client activity levels andcreditworthiness. These conditions can change suddenly
and negatively.
Our financial performance is highly dependent on theenvironment in which our businesses operate. A favorable
business environment is generally characterized by, among
other factors, high global gross domestic product growth,
regulatory and market conditions that result in transparent,
liquid and efficient capital markets, low inflation, business,consumer and investor confidence, stable geopoliticalconditions and strong business earnings.
Unfavorable or uncertain economic and market conditions
can be caused by: low levels of or declines in economic
growth, business activity or investor, business or consumer
confidence; changes in consumer spending or borrowing
patterns; pandemics; limitations on the availability or
increases in the cost of credit and capital; illiquid markets;
increases in inflation, interest rates, exchange rate or basic
commodity price volatility or default rates; concerns aboutsovereign defaults; uncertainty concerning fiscal ormonetary policy, government shutdowns, debt ceilings or
funding; the extent of and uncertainty about potential
increases in tax rates and other regulatory changes;
limitations on international trade and travel; laws andregulations that limit trading in, or the issuance of,
securities of issuers outside their domestic markets;outbreaks of domestic or international tensions or
hostilities, terrorism, nuclear proliferation, cyber security
threats or attacks and other forms of disruption to or
curtailment of global communication, energy transmission
or transportation networks or other geopolitical instability
or uncertainty; corporate, political or other scandals that
reduce investor confidence in capital markets; extreme
weather events or other natural disasters; or a combinationof these or other factors.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe financial services industry and the securities and otherfinancial markets have been materially and adversely
affected in the past by significant declines in the values ofnearly all asset classes, by a serious lack of liquidity and byhigh levels of borrower defaults. In addition, concerns
about the COVID-19 pandemic, European sovereign debt
risk and its impact on the European banking system,
limitations on international trade, and potential or actualchanges in interest rates, inflation and other market
conditions, have, at times, negatively impacted the levels ofclient activity.
General uncertainty about economic, political and market
activities, and the scope, timing and impact of regulatory
reform, as well as weak consumer, investor and CEO
confidence resulting in large part from such uncertainty,
has in the past negatively impacted client activity, which
can adversely affect many of our businesses. Periods of low
volatility and periods of high volatility combined with alack of liquidity, have at times had an unfavorable impact
on our market-making businesses.
Financial institution returns may be negatively impacted byincreased funding costs due in part to the lack of perceived
government support of such institutions in the event of
future financial crises relative to financial institutions incountries in which governmental support is maintained. In
addition, liquidity in the financial markets has also been
negatively impacted as market participants and market
practices and structures continue to adjust to evolving
regulatory frameworks.

Our businesses have been and may in the future be
adversely affected by declining asset values,
particularly where we have net “long” positions,
receive fees based on the value of assets managed, or
receive or post collateral.
Many of our businesses have net “long” positions in debt
securities, loans, derivatives, mortgages, equities (including
private equity and real estate) and most other asset classes.
These include positions we take when we act as a principal
to facilitate our clients’ activities, including our exchangebased market-making activities, or commit large amountsof capital to maintain positions in interest rate and credit
products, as well as through our currencies, commodities,
equities and mortgage-related activities. In addition, weinvest in similar asset classes. Substantially all of ourinvesting and market-making positions and a portion of ourloans are marked-to-market on a daily or other periodic
basis and declines in asset values directly and promptly
impact our earnings, unless we have effectively “hedged”
our exposures to those declines.
In certain circumstances (particularly in the case of credit
products, including leveraged loans, and private equities orother securities that are not freely tradable or lackestablished and liquid trading markets), it may not be
possible or economic to hedge our exposures and to theextent that we do so the hedge may be ineffective or may
greatly reduce our ability to profit from increases in thevalues of the assets. Sudden declines and significant
volatility in the prices of assets have in the past and may inthe future substantially curtail or eliminate the trading
markets for certain assets, which may make it difficult tosell, hedge or value such assets. The inability to sell or
effectively hedge assets reduces our ability to limit losses insuch positions and the difficulty in valuing assets may
negatively affect our capital, liquidity or leverage ratios,increase our funding costs and generally require us tomaintain additional capital.
In our exchange-based market-making activities, we are
obligated by stock exchange rules to maintain an orderly
market, including by purchasing securities in a declining
market. In markets where asset values are declining and involatile markets, this results in losses and an increased needfor liquidity.
We receive asset-based management fees based on the valueof our clients’ portfolios or investment in funds managed by
us and, in some cases, we also receive incentive fees basedon increases in the value of such investments. Declines in
asset values would ordinarily reduce the value of ourclients’ portfolios or fund assets, which in turn would
typically reduce the fees we earn for managing such assets.

Goldman Sachs 2021 Form 10-K

31

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESWe post collateral to support our obligations and receive
collateral that supports the obligations of our clients andcounterparties. When the value of the assets posted ascollateral or the credit ratings of the party posting collateraldecline, the party posting the collateral may need to provide
additional collateral or, if possible, reduce its trading
position. An example of such a situation is a “margin call” inconnection with a brokerage account. Therefore, declines inthe value of asset classes used as collateral mean that either
the cost of funding positions is increased or the size of
positions is decreased. If we are the party providing
collateral, this can increase our costs and reduce our
profitability and if we are the party receiving collateral, thiscan also reduce our profitability by reducing the level ofbusiness done with our clients and counterparties.
In addition, volatile or less liquid markets increase thedifficulty of valuing assets, which can lead to costly and timeconsuming disputes over asset values and the level ofrequired collateral, as well as increased credit risk to therecipient of the collateral due to delays in receiving adequate
collateral. In cases where we foreclose on collateral, sudden
declines in the value or liquidity of the collateral has in thepast and may in the future, despite credit monitoring, overcollateralization, the ability to call for additional collateral or
the ability to force repayment of the underlying obligation,
result in significant losses to us, especially where there is asingle type of collateral supporting the obligation. In
addition, we have been and may in the future be subject toclaims that the foreclosure was not permitted under the legal
documents, was conducted in an improper manner or caused
a client or counterparty to go out of business.
Our market-making activities have been and may inthe future be affected by changes in the levels ofmarket volatility.
Certain of our market-making activities depend on market
volatility to provide trading and arbitrage opportunities toour clients, and decreases in volatility have reduced andmay in the future reduce these opportunities and the level ofclient activity associated with them and adversely affect theresults of these activities. Increased volatility, while it canincrease trading volumes and spreads, also increases risk asmeasured by Value-at-Risk (VaR) and may expose us toincreased risks in connection with our market-making
activities or cause us to reduce our inventory in order toavoid increasing our VaR. Limiting the size of our marketmaking positions can adversely affect our profitability. In
periods when volatility is increasing, but asset values are
declining significantly, it may not be possible to sell assets at
all or it may only be possible to do so at steep discounts. In
those circumstances we may be forced to either take on
additional risk or to realize losses in order to decrease our
VaR. In addition, increases in volatility increase the level of
our RWAs, which increases our capital requirements.
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Goldman Sachs 2021 Form 10-K

Our investment banking, client intermediation, asset
management and wealth management businesses
have been adversely affected and may in the future be
adversely affected by market uncertainty or lack ofconfidence among investors and CEOs due todeclines in economic activity and other unfavorable
economic, geopolitical or market conditions.
Our investment banking business has been and may in the
future be adversely affected by market conditions. Poor
economic conditions and other uncertain geopoliticalconditions may adversely affect and have in the past
adversely affected investor and CEO confidence, resulting
in significant industry-wide declines in the size and numberof underwritings and of financial advisory transactions,which would likely have an adverse effect on our revenues
and our profit margins. In particular, because a significant
portion of our investment banking revenues is derived fromour participation in large transactions, a decline in thenumber of large transactions has in the past and would in
the future adversely affect our investment banking business.
Similarly, in recent years, cross-border initial public
offerings and other securities offerings have accounted for asignificant proportion of new issuance activity. Legislative,
regulatory or other changes that limit trading in, or theissuance of, securities outside the issuers’ domestic markets
have in the past and would in the future adversely affect our
underwriting business.
In certain circumstances, market uncertainty or generaldeclines in market or economic activity may adversely
affect our client intermediation businesses by decreasinglevels of overall activity or by decreasing volatility, but atother times market uncertainty and even declining
economic activity may result in higher trading volumes orhigher spreads or both.
Market uncertainty, volatility and adverse economic
conditions, as well as declines in asset values, may cause ourclients to transfer their assets out of our funds or otherproducts or their brokerage accounts and result in reduced
net revenues, principally in our asset management andwealth management businesses. Even if clients do notwithdraw their funds, they may invest them in productsthat generate less fee income.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESOur asset management and wealth managementbusinesses have been and may in the future be
adversely affected by the poor investment
performance of our investment products or a client
preference for products other than those which weoffer or for products that generate lower fees.
Poor investment returns in our asset management andwealth management businesses, due to either generalmarket conditions or underperformance (relative to ourcompetitors or to benchmarks) by funds or accounts that
we manage or investment products that we design or sell,affects our ability to retain existing assets and to attract newclients or additional assets from existing clients. This could
affect the management and incentive fees that we earn on
AUS or the commissions and net spreads that we earn for
selling other investment products, such as structured notesor derivatives. To the extent that our clients choose toinvest in products that we do not currently offer, we will
suffer outflows and a loss of management fees. Further, if,
due to changes in investor sentiment or the relative
performance of certain asset classes or otherwise, clients
continue to invest in products that generate lower fees (e.g.,
passively managed or fixed income products), our average
effective management fee would continue to decline andour asset management and wealth management businesses
could be adversely affected.

Liquidity
Our liquidity, profitability and businesses may be
adversely affected by an inability to access the debt
capital markets or to sell assets.
Liquidity is essential to our businesses. It is of criticalimportance to us, as most of the failures of financial
institutions have occurred in large part due to insufficientliquidity. Our liquidity may be impaired by an inability toaccess secured and/or unsecured debt markets, an inability
to raise or retain deposits, an inability to access funds fromour subsidiaries or otherwise allocate liquidity optimally,an inability to sell assets or redeem our investments, lack oftimely settlement of transactions, unusual deposit outflows,or other unforeseen outflows of cash or collateral, such as
in March 2020, when corporate clients drew on revolving
credit facilities in response to the COVID-19 pandemic.
This situation may arise due to circumstances that we may
be unable to control, such as a general market or economic
disruption or an operational problem that affects third
parties or us, or even by the perception among market
participants that we, or other market participants, areexperiencing greater liquidity risk.

We employ structured products to benefit our clients andhedge our own risks. The financial instruments that wehold and the contracts to which we are a party are often
complex, and these complex structured products often do
not have readily available markets to access in times ofliquidity stress. Our investing and financing activities maylead to situations where the holdings from these activities
represent a significant portion of specific markets, which
could restrict liquidity for our positions.
Further, our ability to sell assets may be impaired if there is
not generally a liquid market for such assets, as well as incircumstances where other market participants are seeking
to sell similar otherwise generally liquid assets at the sametime, as is likely to occur in a liquidity or other market crisis
or in response to changes to rules or regulations. For
example, recently an investment management firm withlarge positions with several financial institutions defaulted,
resulting in rapidly declining prices in the securities
underlying those positions. In addition, clearinghouses,
exchanges and other financial institutions with which weinteract may exercise set-off rights or the right to require
additional collateral, including in difficult market
conditions, which could further impair our liquidity.
Regulatory changes relating to liquidity may also negatively
impact our results of operations and competitive position.
Numerous regulations have been adopted to introduce
more stringent liquidity requirements for large financial
institutions. These regulations address, among othermatters, liquidity stress testing, minimum liquidity
requirements, wholesale funding, limitations on theissuance of short-term debt and structured notes,
deductions for holdings of TLAC and prohibitions onparent guarantees that are subject to certain cross-defaults.
New and prospective liquidity-related regulations may
overlap with, and be impacted by, other regulatorychanges, including rules relating to minimum long-term
debt requirements and TLAC, guidance on the treatment ofbrokered deposits and the capital, leverage and resolution
and recovery frameworks applicable to large financial
institutions. Given the overlap and complex interactions
among these new and prospective regulations, they may
have unintended cumulative effects, and their full impact
will remain uncertain, while regulatory reforms are being
adopted and market practices develop. In addition, ourneed to manage our operations in light of certain regulatory
requirements when applicable thresholds are met has in thepast limited and may in the future limit our ability to raise
deposits in GSIB or other funding, which could adversely
affect our liquidity or ability to respond efficiently toliquidity stress.

Goldman Sachs 2021 Form 10-K

33

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESOur businesses have been and may in the future be
adversely affected by disruptions or lack of liquidity inthe credit markets, including reduced access to credit
and higher costs of obtaining credit.
Widening credit spreads, as well as significant declines in
the availability of credit, have in the past adversely affected
our ability to borrow on a secured and unsecured basis andmay do so in the future. We fund ourselves on an unsecured
basis by issuing long-term debt and commercial paper, by
raising deposits at our bank subsidiaries, by issuing hybrid
financial instruments and by obtaining loans or lines ofcredit from commercial or other banking entities. We seek
to finance many of our assets on a secured basis. Any
disruptions in the credit markets may make it harder andmore expensive to obtain funding for our businesses. If ouravailable funding is limited or we are forced to fund ouroperations at a higher cost, these conditions may require us
to curtail our business activities and increase our cost offunding, both of which could reduce our profitability,
particularly in our businesses that involve investing, lending
and market making.
Our clients engaging in mergers, acquisitions and othertypes of strategic transactions often rely on access to thesecured and unsecured credit markets to finance theirtransactions. A lack of available credit or an increased costof credit can adversely affect the size, volume and timing of
our clients’ merger and acquisition transactions,particularly large transactions, and adversely affect our
financial advisory and underwriting businesses.
Our credit businesses have been and may in the future be
negatively affected by a lack of liquidity in credit markets. A
lack of liquidity reduces price transparency, increases pricevolatility and decreases transaction volumes and size, all ofwhich can increase transaction risk or decrease theprofitability of these businesses.

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Goldman Sachs 2021 Form 10-K

Reductions in our credit ratings or an increase in ourcredit spreads may adversely affect our liquidity andcost of funding.
Our credit ratings are important to our liquidity. A
reduction in our credit ratings could adversely affect our
liquidity and competitive position, increase our borrowing
costs, limit our access to the capital markets or trigger our
obligations under certain provisions in some of our trading
and collateralized financing contracts. Under theseprovisions, counterparties could be permitted to terminate
contracts with us or require us to post additional collateral.
Termination of our trading and collateralized financing
contracts could cause us to sustain losses and impair our
liquidity by requiring us to find other sources of financing
or to make significant cash payments or securities
movements.
As of December 2021, our counterparties could have called
for additional collateral or termination payments related to
our net derivative liabilities under bilateral agreements in an
aggregate amount of $345 million in the event of aone-notch downgrade of our credit ratings and$1.54 billion in the event of a two-notch downgrade of ourcredit ratings. A downgrade by any one rating agency,
depending on the agency’s relative ratings of us at the timeof the downgrade, may have an impact which iscomparable to the impact of a downgrade by all rating
agencies. For further information about our credit ratings,
see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Risk
Management — Liquidity Risk Management — Credit
Ratings” in Part II, Item 7 of this Form 10-K.
Our cost of obtaining long-term unsecured funding isdirectly related to our credit spreads (the amount in excessof the interest rate of benchmark securities that we need topay). Increases in our credit spreads can significantly
increase our cost of this funding. Changes in credit spreads
are continuous, market-driven, and subject at times tounpredictable and highly volatile movements. Our credit
spreads are also influenced by market perceptions of ourcreditworthiness and movements in the costs to purchasersof credit default swaps referenced to our long-term debt.
The market for credit default swaps has proven to be
extremely volatile and at times has lacked a high degree oftransparency or liquidity.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESGroup Inc. is a holding company and its liquidity
depends on payments and loans from its subsidiaries,
many of which are subject to legal, regulatory andother restrictions on providing funds or assets toGroup Inc.
Group Inc. is a holding company and, therefore, depends
on dividends, distributions, loans and other payments fromits subsidiaries to fund share repurchases and dividend
payments and to fund payments on its obligations,
including debt obligations. Many of our subsidiaries,
including our broker-dealer and bank subsidiaries, aresubject to laws that restrict dividend payments or authorize
regulatory bodies to block or reduce the flow of funds fromthose subsidiaries to Group Inc.
In addition, our broker-dealer and bank subsidiaries are
subject to restrictions on their ability to lend or transact
with affiliates and to minimum regulatory capital and otherrequirements, as well as restrictions on their ability to use
funds deposited with them in brokerage or bank accounts
to fund their businesses. Additional restrictions on relatedparty transactions, increased capital and liquidity
requirements and additional limitations on the use of funds
on deposit in bank or brokerage accounts, as well as lower
earnings, can reduce the amount of funds available to meetthe obligations of Group Inc., including under the FRB’s
source of strength requirement, and even require Group
Inc. to provide additional funding to such subsidiaries.
Restrictions or regulatory action of that kind could impede
access to funds that Group Inc. needs to make payments on
its obligations, including debt obligations, or dividend
payments. In addition, Group Inc.’s right to participate in a
distribution of assets upon a subsidiary’s liquidation or
reorganization is subject to the prior claims of thesubsidiary’s creditors.

Furthermore, Group Inc. has guaranteed the payment
obligations of certain of its subsidiaries, including GS&Co.
and GS Bank USA, subject to certain exceptions. In
addition, Group Inc. guarantees many of the obligations of
its
other
consolidated
subsidiaries
onatransaction-by-transaction basis, as negotiated withcounterparties. These guarantees may require Group Inc. toprovide substantial funds or assets to its subsidiaries ortheir creditors or counterparties at a time when Group Inc.
is in need of liquidity to fund its own obligations.
The requirements for us and certain of our subsidiaries todevelop and submit recovery and resolution plans toregulators, and the incorporation of feedback received from
regulators, may require us to increase capital or liquidity
levels or issue additional long-term debt at Group Inc. or
particular subsidiaries or otherwise incur additional or
duplicative operational or other costs at multiple entities,
and may reduce our ability to provide Group Inc.
guarantees of the obligations of our subsidiaries or raise
debt at Group Inc. Resolution planning may also impair
our ability to structure our intercompany and external
activities in a manner that we may otherwise deem mostoperationally efficient. Furthermore, arrangements tofacilitate our resolution planning may cause us to be subject
to additional taxes. Any such limitations or requirements
would be in addition to the legal and regulatory restrictions
described above on our ability to engage in capital actions
or make intercompany dividends or payments.
See “Business — Regulation” in Part I, Item 1 of thisForm 10-K for further information about regulatory
restrictions.

There has been a trend towards increased regulation andsupervision of our subsidiaries by the governments andregulators in the countries in which those subsidiaries arelocated or do business. Concerns about protecting clientsand creditors of financial institutions that are controlled bypersons or entities located outside of the country in whichsuch entities are located or do business have caused or may
cause a number of governments and regulators to takeadditional steps to “ring fence” or require internal total
loss-absorbing capacity (which may also be subject to“bail-in” powers, as described below) at those entities inorder to protect clients and creditors of those entities in theevent of financial difficulties involving those entities. The
result has been and may continue to be additional
limitations on our ability to efficiently move capital andliquidity among our affiliated entities, or to Group Inc.,
including in times of liquidity stress, thereby increasing theoverall level of capital and liquidity required by us on aconsolidated basis.
Goldman Sachs 2021 Form 10-K

35

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

CreditOur businesses, profitability and liquidity may be
adversely affected by deterioration in the credit
quality of or defaults by third parties.

Concentration of risk increases the potential forsignificant
lossesinourmarket-making,underwriting, investing and financing activities.

We are exposed to the risk that third parties that owe us
money, securities or other assets will not perform their
obligations. These parties may default on their obligations
to us due to bankruptcy, lack of liquidity, operational
failure or other reasons. A failure of a significant market
participant, or even concerns about a default by such an
institution, could lead to significant liquidity problems,
losses or defaults by other institutions, which in turn could
adversely affect us.

Concentration of risk increases the potential for significant
losses in our market-making, underwriting, investing andfinancing activities. The number and size of thesetransactions has affected and may in the future affect our
results of operations in a given period. Moreover, becauseof concentrated risk, we may suffer losses even when
economic and market conditions are generally favorable forour competitors. Disruptions in the credit markets canmake it difficult to hedge these credit exposures effectively
or economically. In addition, we extend large commitments
as part of our credit origination activities.

We are also subject to the risk that our rights against third
parties may not be enforceable in all circumstances. In
addition, deterioration in the credit quality of third parties
whose securities or obligations we hold, including adeterioration in the value of collateral posted by third
parties to secure their obligations to us under derivative
contracts and loan agreements, could result in losses and/or
adversely affect our ability to rehypothecate or otherwise
use those securities or obligations for liquidity purposes.
A significant downgrade in the credit ratings of ourcounterparties could also have a negative impact on our
results. While in many cases we are permitted to require
additional collateral from counterparties that experiencefinancial difficulty, disputes may arise as to the amount ofcollateral we are entitled to receive and the value of pledged
assets. The termination of contracts and the foreclosure on
collateral may subject us to claims for the improper exerciseof our rights. Default rates, downgrades and disputes withcounterparties as to the valuation of collateral typicallyincrease significantly in times of market stress, increased
volatility and illiquidity.
As part of our clearing and prime brokerage activities, we
finance our clients’ positions, and we could be held
responsible for the defaults or misconduct of our clients.
Although we have limits and regularly review credit
exposures to specific clients and counterparties and to
specific industries, countries and regions that we believe
may present credit concerns, default risk may arise fromevents or circumstances that are difficult to detect orforesee.

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Goldman Sachs 2021 Form 10-K

Rules adopted under the Dodd-Frank Act, and similar rules
adopted in other jurisdictions, require issuers of certain
asset-backed securities and any person who organizes andinitiates certain asset-backed securities transactions toretain economic exposure to the asset, which has affected
the cost of and structures used in connection with thesesecuritization activities. Our inability to reduce our credit
risk by selling, syndicating or securitizing these positions,
including during periods of market stress, could negatively
affect our results of operations due to a decrease in the fairvalue of the positions, including due to the insolvency orbankruptcy of borrowers, as well as the loss of revenues
associated with selling such securities or loans.
In the ordinary course of business, we may be subject to aconcentration of credit risk to a particular counterparty,
borrower, issuer (including sovereign issuers) or geographic
area or group of related countries, such as the E.U., and a
failure or downgrade of, or default by, such entity could
negatively impact our businesses, perhaps materially, andthe systems by which we set limits and monitor the level ofour credit exposure to individual entities, industries,
countries and regions may not function as we haveanticipated. Regulatory reform, including the Dodd-Frank
Act, has led to increased centralization of trading activity
through particular clearing houses, central agents or
exchanges, which has significantly increased ourconcentration of risk with respect to these entities. While
our activities expose us to many different industries,
counterparties and countries, we routinely execute a highvolume of transactions with counterparties engaged infinancial services activities, including brokers and dealers,commercial banks, clearing houses, exchanges andinvestment funds. This has resulted in significant credit
concentration with respect to these counterparties.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Derivative transactions and delayed documentationor settlements may expose us to credit risk,
unexpected risks and potential losses.
We are party to a large number of derivative transactions,
including credit derivatives. Many of these derivative
instrumentsareindividuallynegotiatedandnon-standardized, which can make exiting, transferring or
settling positions difficult. Many credit derivatives requirethat we deliver to the counterparty the underlying security,
loan or other obligation in order to receive payment. In anumber of cases, we do not hold the underlying security,
loan or other obligation and may not be able to obtain theunderlying security, loan or other obligation. This could
cause us to forfeit the payments due to us under thesecontracts or result in settlement delays with the attendantcredit and operational risk, as well as increased costs to us.
Derivative transactions may also involve the risk that
documentation has not been properly executed, that
executed agreements may not be enforceable against thecounterparty, or that obligations under such agreements
may not be able to be “netted” against other obligations
with such counterparty. In addition, counterparties may
claim that such transactions were not appropriate or
authorized.
As a signatory to the ISDA Universal Protocol or U.S. ISDA
Protocol (ISDA Protocols) and being subject to the FRB’sand FDIC’s rules on QFCs and similar rules in otherjurisdictions, we may not be able to exercise remedies
against counterparties and, as this new regime has not yet
been tested, we may suffer risks or losses that we would nothave expected to suffer if we could immediately close outtransactions upon a termination event. The ISDA Protocols
and these rules and regulations extend to repurchaseagreements and other instruments that are not derivative
contracts.
Derivative contracts and other transactions, including
secondary bank loan purchases and sales, entered into withthird parties are not always confirmed by the counterparties
or settled on a timely basis. While the transaction remains
unconfirmed or during any delay in settlement, we aresubject to heightened credit and operational risk and in theevent of a default may find it more difficult to enforce ourrights.

In addition, as new complex derivative products are created,covering a wider array of underlying credit and other
instruments, disputes about the terms of the underlying
contracts could arise, which could impair our ability toeffectively manage our risk exposures from these products
and subject us to increased costs. The provisions of the
Dodd-Frank Act requiring central clearing of credit
derivatives and other OTC derivatives, or a market shift
toward standardized derivatives, could reduce the risk
associated with these transactions, but under certain
circumstances could also limit our ability to develop
derivatives that best suit the needs of our clients and tohedge our own risks, and could adversely affect our
profitability and has increased our credit exposure to central
clearing platforms.

Operational
A failure in our operational systems or infrastructure,or those of third parties, as well as human error,
malfeasance or other misconduct, could impair our
liquidity, disrupt our businesses, result in thedisclosure of confidential information, damage our
reputation and cause losses.
Our businesses are highly dependent on our ability toprocess and monitor, on a daily basis, a very large numberof transactions, many of which are highly complex andoccur at high volumes and frequencies, across numerous
and diverse markets in many currencies. These transactions,as well as the information technology services we provide toclients, often must adhere to client-specific guidelines, aswell as legal and regulatory standards.
Many rules and regulations worldwide govern our
obligations to execute transactions and report suchtransactions and other information to regulators,
exchanges and investors. Compliance with these legal andreporting requirements can be challenging, and we havebeen and may in the future be subject to regulatory finesand penalties for failing to follow these rules or to report
timely, accurate and complete information in accordancewith these rules. As such requirements expand, compliancewith these rules and regulations has become morechallenging.

Goldman Sachs 2021 Form 10-K

37

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESAs our client base, including through our consumer
businesses, and our geographical reach expand and thevolume, speed, frequency and complexity of transactions,especially electronic transactions (as well as therequirements to report such transactions on a real-timebasis to clients, regulators and exchanges) increase,developing and maintaining our operational systems andinfrastructure becomes more challenging, and the risk ofsystems or human error in connection with suchtransactions increases, as well as the potential consequencesof such errors due to the speed and volume of transactions
involved and the potential difficulty associated withdiscovering errors quickly enough to limit the resulting
consequences. Such risks are exacerbated in times ofincreased volatility. As with other similarly situatedinstitutions, we utilize credit underwriting models inconnection with our businesses, including our consumeroriented activities. Allegations, whether or not accurate,that the ultimate underwriting decisions do not treat
consumers or clients fairly, or comply with the applicablelaw or regulation, can result in negative publicity,
reputational damage and governmental and regulatory
scrutiny, investigations and enforcement actions.
Our financial, accounting, data processing or otheroperational systems and facilities may fail to operateproperly or become disabled as a result of events that are
wholly or partially beyond our control, such as a spike intransaction volume, adversely affecting our ability toprocess these transactions or provide these services. We
must continuously update these systems to support ouroperations and growth and to respond to changes inregulations and markets, and invest heavily in systemic
controls and training to pursue our objective of ensuringthat such transactions do not violate applicable rules andregulations or, due to errors in processing suchtransactions, adversely affect markets, our clients andcounterparties or us. Enhancements and updates tosystems, as well as the requisite training, including inconnection with the integration of new businesses, entail
significant costs and create risks associated with
implementing new systems and integrating them withexisting ones.

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Goldman Sachs 2021 Form 10-K

The use of computing devices and phones is critical to thework done by our employees and the operation of oursystems and businesses and those of our clients and ourthird-party service providers and vendors. Their
importance has continued to increase, in particular in lightof work-from-home arrangements implemented in responseto the COVID-19 pandemic. Computers and computer
networks are subject to various risks, including, among
others, cyber attacks, inherent technological defects, system
failures and human error. For example, fundamental
security flaws in computer chips found in many types ofthese computing devices and phones have been reported in
the past and may be discovered in the future. Cloudtechnologies are also critical to the operation of our systems
and platforms and our reliance on cloud technologies is
growing. Service disruptions have resulted, and may resultin the future, in delays in accessing, or the loss of, data thatis important to our businesses and may hinder our clients’
access to our platforms. During 2021, there were a numberof widely publicized cases of outages in connection withaccess to cloud computing providers. Addressing these andsimilar issues could be costly and affect the performance of
these businesses and systems. Operational risks may be
incurred in applying fixes and there may still be residual
security risks.
Additionally, although the prevalence and scope of
applications of distributed ledger technology and similar
technologies is growing, the technology is also nascent andmay be vulnerable to cyber attacks or have other inherent
weaknesses. We are exposed to risks, and may become
exposed to additional risks, related to distributed ledger
technology, including through our facilitation of clients’
activities involving financial products that use distributed
ledger technology, such as blockchain or cryptocurrencies,
our investments in companies that seek to develop
platforms based on distributed ledger technology, the use of
distributed ledger technology by third-party vendors,clients, counterparties, clearing houses and other financial
intermediaries, and the receipt of cryptocurrencies or otherdigital assets as collateral.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notwithstanding the proliferation of technology andtechnology-based risk and control systems, our businesses
ultimately rely on people as our greatest resource, and,from time to time, they have in the past and may in the
future make mistakes or engage in violations of applicablepolicies, laws, rules or procedures that are not always
caught immediately by our technological processes or by
our controls and other procedures, which are intended toprevent and detect such errors or violations. These have inthe past and may in the future include calculation errors,
mistakes in addressing emails, errors in software or model
development or implementation, or simple errors injudgment, as well as intentional efforts to ignore or
circumvent applicable policies, laws, rules or procedures.
Human errors, malfeasance and other misconduct,
including the intentional misuse of client information inconnection with insider trading or for other purposes, even
if promptly discovered and remediated, has in the past andmay in the future result in reputational damage and losses
and liabilities for us.
In addition, we face the risk of operational failure or
significant operational delay, termination or capacity
constraints of any of the clearing agents, exchanges,
clearing houses or other financial intermediaries we use tofacilitate our securities and derivatives transactions, and as
our interconnectivity with our clients grows, we
increasingly face the risk of operational failure or
significant operational delay with respect to our clients’systems.
There has been significant consolidation among clearing
agents, exchanges and clearing houses and an increasing
number of derivative transactions are cleared on exchanges,
which has increased our exposure to operational failure or
significant operational delay, termination or capacity
constraints of the particular financial intermediaries that
we use and could affect our ability to find adequate andcost-effective alternatives in the event of any such failure,delay, termination or constraint. Industry consolidation,
whether among market participants or financial
intermediaries, increases the risk of operational failure or
significant operational delay as disparate complex systems
need to be integrated, often on an accelerated basis.

The interconnectivity of multiple financial institutions withcentral agents, exchanges and clearing houses, and theincreased centrality of these entities, increases the risk thatan operational failure at one institution or entity may cause
an industry-wide operational failure that could materially
impact our ability to conduct business. Interconnectivity offinancial institutions with other companies through, among
other things, application programming interfaces or APIs
presents similar risks. Any such failure, termination orconstraint could adversely affect our ability to effecttransactions, service our clients, manage our exposure torisk or expand our businesses or result in financial loss or
liability to our clients, impairment of our liquidity,
disruption of our businesses, regulatory intervention or
reputational damage.
Despite our resiliency plans and facilities, our ability to
conduct business may be adversely impacted by adisruption in the infrastructure that supports our businesses
and the communities where we are located. This may
include a disruption involving electrical, satellite, undersea
cable or other communications, internet, transportation orother facilities used by us, our employees or third parties
with which we conduct business, including cloud service
providers. These disruptions may occur as a result of events
that affect only our buildings or systems or those of suchthird parties, or as a result of events with a broader impact
globally, regionally or in the cities where those buildings orsystems are located, including, but not limited to, natural
disasters, war, civil unrest, terrorism, economic or politicaldevelopments, pandemics and weather events.
In addition, although we seek to diversify our third-party
vendors to increase our resiliency, we are also exposed to
the risk that a disruption or other information technology
event at a common service provider to our vendors could
impede their ability to provide products or services to us,
including in connection with our new business initiatives.
We may not be able to effectively monitor or mitigate
operational risks relating to our vendors’ use of common
service providers.

Goldman Sachs 2021 Form 10-K

39

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Aside from work-from-home arrangements during the
COVID-19 pandemic, nearly all of our employees in our
primary locations, including the New York metropolitanarea, London, Bengaluru, Hong Kong, Tokyo and Salt Lake
City, work in close proximity to one another, in one ormore buildings. Notwithstanding our efforts to maintainbusiness continuity, given that our headquarters and thelargest concentration of our employees are in the New York
metropolitan area, and our two principal office buildings in
the New York area both are located on the waterfront of
the Hudson River, depending on the intensity and longevityof the event, a catastrophic event impacting our New York
metropolitan area offices, including a terrorist attack,extreme weather event or other hostile or catastrophic
event, could negatively affect our business. If a disruption
occurs in one location and our employees in that location
are unable to occupy our offices or communicate with ortravel to other locations or successfully work remotely, ourability to service and interact with our clients may suffer,
and we may not be able to successfully implement
contingency plans that depend on communication, workfrom-home arrangements or travel.
A failure to protect our computer systems, networks
and information, and our clients’ information, against
cyber attacks and similar threats could impair ourability to conduct our businesses, result in thedisclosure, theft or destruction of confidential
information, damage our reputation and cause losses.
Our operations rely on the secure processing, storage andtransmission of confidential and other information in our
computer systems and networks and those of our vendors.
There have been a number of highly publicized cases
involving financial services companies, consumer-based
companies, software and information technology service
providers, governmental agencies and other organizations
reporting the unauthorized access or disclosure of client,customer or other confidential information in recent years,
as well as cyber attacks involving the dissemination, theft
and destruction of corporate information or other assets, asa result of failure to follow procedures by employees orcontractors or as a result of actions by third parties,
including actions by foreign governments. There have also
been several highly publicized cases where hackers haverequested “ransom” payments in exchange for notdisclosing customer information or for restoring access to
information or systems.

40

Goldman Sachs 2021 Form 10-K

We are regularly the target of attempted cyber attacks,
including denial-of-service attacks, and must continuously
monitor and develop our systems to protect the integrity andfunctionality of our technology infrastructure and access toand the security of our data. We have faced an increasing
number of attempted cyber attacks as we expand our mobileand other internet-based products and services, as well as ourusage of mobile and cloud technologies, and as we provide
more of these services to a greater number of individual
consumers. The increasing migration of our communicationfrom devices we provide to employee-owned devices presents
additional risks of cyber attacks, as do work-from-homearrangements such as those implemented in response to the
COVID-19 pandemic. In addition, due to ourinterconnectivity with third-party vendors (and theirrespective service providers), central agents, exchanges,
clearing houses and other financial institutions, we could be
adversely impacted if any of them is subject to a successful
cyber attack or other information security event. These
impacts could include the loss of access to information orservices from the third party subject to the cyber attack orother information security event, which could, in turn,interrupt certain of our businesses.
Despite our efforts to ensure the integrity of our systems
and information, we may not be able to anticipate, detect or
implement effective preventive measures against all cyberthreats, especially because the techniques used areincreasingly sophisticated, change frequently and are often
not recognized until launched. Cyber attacks can originate
from a variety of sources, including third parties who areaffiliated with or sponsored by foreign governments or are
involved with organized crime or terrorist organizations.
Third parties may also attempt to place individuals in our
offices or induce employees, clients or other users of oursystems to disclose sensitive information or provide accessto our data or that of our clients, and these types of risks
may be difficult to detect or prevent.
Although we take protective measures proactively andendeavor to modify them as circumstances warrant, ourcomputer systems, software and networks may be vulnerable
to unauthorized access, misuse, computer viruses or othermalicious code, cyber attacks on our vendors and otherevents that could have a security impact. Risks relating tocyber attacks on our vendors have been increasing given thegreater frequency and severity in recent years of supply chain
attacks affecting software and information technology
service providers. Due to the complexity andinterconnectedness of our systems, the process of enhancing
our protective measures can itself create a risk of systems
disruptions and security issues. In addition, protective
measures that we employ to compartmentalize our data may
reduce our visibility into, and adversely affect our ability torespond to, cyber threats and issues with our systems.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

If one or more of such events occur, this potentially could
jeopardize our or our clients’ or counterparties’ confidential
and other information processed, stored in, or transmitted
through our computer systems and networks, or otherwise
cause interruptions or malfunctions in our operations or
those of our clients, counterparties or third parties, which
could impact their ability to transact with us or otherwise
result in legal or regulatory action, significant losses orreputational damage. In addition, such an event could
persist for an extended period of time before being detected,
and, following detection, it could take considerable time for
us to obtain full and reliable information about the extent,
amount and type of information compromised. During thecourse of an investigation, we may not know the full impactof the event and how to remediate it, and actions, decisions
and mistakes that are taken or made may further increase
the negative effects of the event on our business, results ofoperations and reputation.
We have expended, and expect to continue to expend,
significant resources on an ongoing basis to modify ourprotective measures and to investigate and remediate
vulnerabilities or other exposures, but these measures may
be ineffective and we may be subject to legal or regulatory
action, as well as financial losses that are either not insured
against or not fully covered through any insurance
maintained by us.
Our clients’ confidential information may also be at risk
from the compromise of clients’ personal electronic devices
or as a result of a data security breach at an unrelatedcompany. Losses due to unauthorized account activity
could harm our reputation and may have adverse effects on
our business, financial condition and results of operations.
The increased use of mobile and cloud technologies canheighten these and other operational risks, as can workfrom-home arrangements. Certain aspects of the security ofsuch technologies are unpredictable or beyond our control,
and the failure by mobile technology and cloud service
providers to adequately safeguard their systems and prevent
cyber attacks could disrupt our operations and result inmisappropriation, corruption or loss of confidential andother information. In addition, there is a risk thatencryption and other protective measures, despite their
sophistication, may be defeated, particularly to the extent
that new computing technologies vastly increase the speed
and computing power available.

We routinely transmit and receive personal, confidential andproprietary information by email and other electronic means.
We have discussed and worked with clients, vendors, service
providers, counterparties and other third parties to develop
secure transmission capabilities and protect against cyberattacks, but we do not have, and may be unable to put inplace, secure capabilities with all of our clients, vendors,
service providers, counterparties and other third parties andwe may not be able to ensure that these third parties haveappropriate controls in place to protect the confidentiality of
the information. An interception, misuse or mishandling of
personal, confidential or proprietary information being sent
to or received from a client, vendor, service provider,counterparty or other third party could result in legal
liability, regulatory action and reputational harm.
We may incur losses as a result of ineffective risk
management processes and strategies.
We seek to monitor and control our risk exposure througha risk and control framework encompassing a variety ofseparate but complementary financial, credit, operational,
compliance and legal reporting systems, internal controls,
management review processes and other mechanisms. Ourrisk management process seeks to balance our ability to
profit from market-making, investing or lending positions,and underwriting activities, with our exposure to potential
losses. While we employ a broad and diversified set of risk
monitoring and risk mitigation techniques, thosetechniques and the judgments that accompany theirapplication cannot anticipate every economic and financial
outcome or the specifics and timing of such outcomes.
Thus, in the course of our activities, we have incurred andmay in the future incur losses. Market conditions in recent
years have involved unprecedented dislocations andhighlight the limitations inherent in using historical data to
manage risk.
The models that we use to assess and control our risk
exposures reflect assumptions about the degrees ofcorrelation or lack thereof among prices of various asset
classes or other market indicators. In times of market stressor other unforeseen circumstances, previously uncorrelated
indicators may become correlated, or conversely previously
correlated indicators may move in different directions. Thesetypes of market movements have at times limited theeffectiveness of our hedging strategies and have caused us toincur significant losses, and they may do so in the future.
These changes in correlation have been and may in the future
be exacerbated where other market participants are using
risk or trading models with assumptions or algorithms thatare similar to ours. In these and other cases, it may bedifficult to reduce our risk positions due to the activity ofother market participants or widespread market dislocations,
including circumstances where asset values are declining
significantly or no market exists for certain assets.
Goldman Sachs 2021 Form 10-K

41

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESIn addition, the use of models in connection with risk
management and numerous other critical activities presents
risks that such models may be ineffective, either because ofpoor design, ineffective testing, or improper or flawed
inputs, as well as unpermitted access to such models
resulting in unapproved or malicious changes to the modelor its inputs.
To the extent that we have positions through our marketmaking or origination activities or we make investments
directly through our investing activities, including private
equity, that do not have an established liquid trading
market or are otherwise subject to restrictions on sale orhedging, we may not be able to reduce our positions andtherefore reduce our risk associated with those positions. In
addition, to the extent permitted by applicable law andregulation, we invest our own capital in private equity,
credit, real estate and hedge funds that we manage andlimitations on our ability to withdraw some or all of ourinvestments in these funds, whether for legal, reputationalor other reasons, may make it more difficult for us tocontrol the risk exposures relating to these investments.
Prudent risk management, as well as regulatory restrictions,
may cause us to limit our exposure to counterparties,
geographic areas or markets, which may limit our business
opportunities and increase the cost of our funding or
hedging activities.
As we have expanded and intend to continue to expand the
product and geographic scope of our offerings of credit
products to consumers, we are presented with different
credit risks and must expand and adapt our credit risk
monitoring and mitigation activities to account for thesebusiness activities. A failure to adequately assess andcontrol such risk exposures could result in losses to us.
For further information about our risk management
policies and procedures, see “Management’s Discussion
and Analysis of Financial Condition and Results ofOperations — Risk Management” in Part II, Item 7 of thisForm 10-K.
We may incur losses as a result of unforeseen or
catastrophic events, including pandemics, terrorist
attacks, extreme weather events or other natural
disasters.
The occurrence of unforeseen or catastrophic events,
including pandemics, such as COVID-19, or otherwidespread health emergencies (or concerns over the
possibility of such an emergency), terrorist attacks, extreme
weather events, solar events or other natural disasters,
could create economic and financial disruptions, and could
lead to operational difficulties (including travel limitations
and limitations on occupancy in our offices) that could
impair our ability to manage our businesses.
42

Goldman Sachs 2021 Form 10-K

Climate change could disrupt our businesses andadversely affect client activity levels and thecreditworthiness of our clients and counterparties,
and our efforts to address concerns relating to climatechange could result in damage to our reputation.
Climate change may cause extreme weather events that
disrupt operations at one or more of our primary locations,which may negatively affect our ability to service andinteract with our clients, adversely affect the value of ourinvestments, including our real estate investments, andreduce the availability or increase the cost of insurance.
Climate change and the transition to a less carbondependent economy may also have a negative impact on theoperations or financial condition of our clients andcounterparties, which may decrease revenues from thoseclients and counterparties and increase the credit risk
associated with loans and other credit exposures to thoseclients and counterparties. In addition, climate change may
impact the broader economy.
We are also exposed to risks resulting from changes inpublic policy, laws and regulations, or market and public
perceptions and preferences in connection with thetransition to a less carbon-dependent economy. Thesechanges could adversely affect our business, results ofoperations and reputation. For example, our reputationand client relationships may be damaged as a result of ourinvolvement, or our clients’ involvement, in certain
industries or projects associated with causing or
exacerbating climate change, as well as any decisions wemake to continue to conduct or change our activities in
response to considerations relating to climate change. If weare unable to achieve our objectives relating to climatechange or our response to climate change is perceived to beineffective or insufficient, our business, reputation andefforts to recruit and retain employees may suffer.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESNew regulations or guidance relating to climate change, as
well as the perspectives of regulators, shareholders,
employees and other stakeholders regarding climatechange, may affect whether and on what terms andconditions we engage in certain activities or offer certain
products. Federal and state, and non-U.S. banking
regulators and supervisory authorities, shareholders andother stakeholders have increasingly viewed financial
institutions as playing an important role in helping toaddress risks related to climate change, both directly andwith respect to their clients, which may result in financial
institutions coming under increased requirements andexpectations regarding the disclosure and management of
their climate risks and related lending, investment andadvisory activities. We also may become subject to new orheightened regulatory requirements relating to climatechange, such as requirements relating to operational
resiliency or stress testing for various climate stressscenarios. Any such new or heightened requirements could
result in increased regulatory, compliance or other costs or
higher capital requirements. The risks associated with, andthe perspective of regulators, shareholders, employees andother stakeholders regarding, climate change are continuing
to evolve rapidly, which can make it difficult to assess theultimate impact on us of climate change-related risks anduncertainties, and we expect that climate change-relatedrisks will increase over time.

Legal and Regulatory
Our businesses and those of our clients are subject toextensive and pervasive regulation around the world.
As a participant in the financial services industry and asystemically important financial institution, we are subject
to extensive regulation in jurisdictions around the world.
We face the risk of significant intervention by law
enforcement, regulatory and taxing authorities, as well asprivate litigation, in all jurisdictions in which we conduct
our businesses. In many cases, our activities have been andmay continue to be subject to overlapping and divergent
regulation in different jurisdictions. Among other things, asa result of law enforcement authorities, regulators or
private parties challenging our compliance with existinglaws and regulations, we or our employees have been, andcould be, fined, criminally charged or sanctioned;prohibited from engaging in some of our business activities;
subjected to limitations or conditions on our businessactivities, including higher capital requirements; orsubjected to new or substantially higher taxes or othergovernmental charges in connection with the conduct ofour businesses or with respect to our employees. Theselimitations or conditions may limit our business activities
and negatively impact our profitability.

In addition to the impact on the scope and profitability ofour business activities, day-to-day compliance with existinglaws and regulations has involved and will continue to
involve significant amounts of time, including that of oursenior leaders and that of a large number of dedicatedcompliance and other reporting and operational personnel,
all of which may negatively impact our profitability.
Our revenues and profitability and those of our competitors
have been and will continue to be impacted by requirements
relating to capital, additional loss-absorbing capacity,leverage, minimum liquidity and long-term funding levels,
requirements related to resolution and recovery planning,derivatives clearing and margin rules and levels of
regulatory oversight, as well as limitations on which and, if
permitted, how certain business activities may be carriedout by financial institutions. The laws and regulations that
apply to our businesses are often complex and, in manycases, we must make interpretive decisions regarding theapplication of those laws and regulations to our businessactivities. Changes in interpretations, whether in responseto regulatory guidance, industry conventions, our own
reassessments or otherwise, could adversely affect ourbusinesses, results of operations or ability to satisfy
applicable regulatory requirements, such as capital or
liquidity requirements.
If there are new laws or regulations or changes in theinterpretation or enforcement of existing laws or
regulations applicable to our businesses or those of ourclients, including capital, liquidity, leverage, long-term
debt, total loss-absorbing capacity and margin
requirements, restrictions on leveraged lending or otherbusiness practices, reporting requirements, requirements
relating to recovery and resolution planning, tax burdensand compensation restrictions, that are imposed on alimited subset of financial institutions (whether based onsize, method of funding, activities, geography or othercriteria), compliance with these new laws or regulations, orchanges in the enforcement of existing laws or regulations,
could adversely affect our ability to compete effectively
with other institutions that are not affected in the sameway. In addition, regulation imposed on financial
institutions or market participants generally, such as taxes
on stock transfers and other financial transactions, could
adversely impact levels of market activity more broadly,
and thus impact our businesses. Changes to laws or
regulations, such as tax laws, could also have adisproportionate impact on us, based on the way those laws
or regulations are applied to financial services and financial
firms or due to our corporate structure.

Goldman Sachs 2021 Form 10-K

43

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

These developments could impact our profitability in theaffected jurisdictions, or even make it uneconomic for us tocontinue to conduct all or certain of our businesses in thosejurisdictions, or could cause us to incur significant costs
associated with changing our business practices,
restructuring our businesses, moving all or certain of ourbusinesses and our employees to other locations orcomplying with applicable capital requirements, including
reducing dividends or share repurchases, liquidating assets
or raising capital in a manner that adversely increases ourfunding costs or otherwise adversely affects ourshareholders and creditors.
U.S. and non-U.S. regulatory developments, in particular
the Dodd-Frank Act and Basel III, have significantly altered
the regulatory framework within which we operate andhave adversely affected and may in the future adversely
affect our profitability. Among the aspects of the DoddFrank Act that have affected or may in the future affect ourbusinesses are: increased capital, liquidity and reporting
requirements; limitations on activities in which we may
engage; increased regulation of and restrictions on OTC
derivatives markets and transactions; limitations on
incentivecompensation;
limitationsonaffiliatetransactions; requirements to reorganize or limit activities
in connection with recovery and resolution planning;
increased deposit insurance assessments; and increased
standards of care for broker-dealers and investment
advisers in dealing with clients. The implementation ofhigher capital requirements, more stringent requirements
relating to liquidity, long-term debt and total lossabsorbing capacity and the prohibition on proprietary
trading and the sponsorship of, or investment in, covered
funds by the Volcker Rule may continue to adversely affectour profitability and competitive position, particularly ifthese requirements do not apply equally to our competitors
or are not implemented uniformly across jurisdictions. We
may also become subject to higher and more stringent
capital and other regulatory requirements as a result of theimplementation of Basel Committee standards, including
the new credit and operational risk capital standards
published in December 2017 and the new market risk
capital standard published in January 2019.

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Goldman Sachs 2021 Form 10-K

As described in “Business — Regulation — Banking
Supervision and Regulation” in Part I, Item 1 of thisForm 10-K, the SCB has replaced the capital conservationbuffer under the Standardized Capital Rules and resulted inhigher Standardized capital ratio requirements. Failure tocomply with these requirements could limit our ability to,among other things, repurchase shares, pay dividends andmake certain discretionary compensation payments. In
addition, if, as in 2020, we are required to resubmit ourcapital plan, we generally may not make capital
distributions, such as share repurchases or dividends,
without the prior approval of the FRB. Dividends andrepurchases are also subject to oversight by the FRB, which
can result in limitations. Limitations on our ability to makecapital distributions could, among other things, prevent us
from returning capital to our shareholders and impact our
return on equity. Additionally, as a G-SIB, we are subject to
the G-SIB surcharge. Our G-SIB surcharge is updated
annually based on financial data from the prior year.
Expansion of our businesses, growth in our balance sheet
and increased reliance on short-term wholesale funding
have resulted in increases and in the future may result infurther increases in our G-SIB surcharge and acorresponding increase in our capital requirements.
We are also subject to laws and regulations, such as the
GDPR and the California Consumer Privacy Act, relating
to the privacy of the information of clients, employees orothers, and any failure to comply with these laws andregulations could expose us to liability and/or reputational
damage. As new privacy-related laws and regulations are
implemented, the time and resources needed for us tocomply with such laws and regulations, as well as ourpotential liability for non-compliance and reporting
obligations in the case of data breaches, may significantly
increase.
In addition, our businesses are increasingly subject to laws
and regulations relating to surveillance, encryption anddata on-shoring in the jurisdictions in which we operate.
Compliance with these laws and regulations may require us
to change our policies, procedures and technology for
information security, which could, among other things,
make us more vulnerable to cyber attacks andmisappropriation, corruption or loss of information or
technology.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

We have entered into consumer-oriented deposit-taking,lending and credit card businesses, and we expect to expand
the product and geographic scope of our offerings. Entering
into these businesses subjects us to numerous additional
regulations in the jurisdictions in which these businesses
operate. Not only are these regulations extensive, but they
involve types of regulations and supervision, as well as
regulatory compliance risks, that have not historicallyapplied to us. The level of regulatory scrutiny and the scopeof regulations affecting financial interactions with
consumers is often much greater than that associated withdoing business with institutions and high-net-worth
individuals. Complying with these regulations is timeconsuming, costly and presents new and increased risks.
Increasingly, regulators and courts have sought to holdfinancial institutions liable for the misconduct of theirclients where they have determined that the financial
institution should have detected that the client was engaged
in wrongdoing, even though the financial institution had no
direct knowledge of the activities engaged in by its client.
Regulators and courts have also increasingly found liability
as a “control person” for activities of entities in which
financial institutions or funds controlled by financial
institutions have an investment, but which they do not
actively manage. In addition, regulators and courts
continue to seek to establish “fiduciary” obligations tocounterparties to which no such duty had been assumed toexist. To the extent that such efforts are successful, the costof, and liabilities associated with, engaging in brokerage,
clearing, market-making, prime brokerage, investing andother similar activities could increase significantly. To theextent that we have fiduciary obligations in connection
with acting as a financial adviser or investment adviser or inother roles for individual, institutional, sovereign orinvestment fund clients, any breach, or even an alleged
breach, of such obligations could have materially negative
legal, regulatory and reputational consequences.
For information about the extensive regulation to which
our businesses are subject, see “Business — Regulation” inPart I, Item 1 of this Form 10-K.

A failure to appropriately identify and address
potential conflicts of interest could adversely affectour businesses.
Due to the broad scope of our businesses and our client
base, we regularly address potential conflicts of interest,
including situations where our services to a particular clientor our own investments or other interests conflict, or are
perceived to conflict, with the interests of that client or
another client, as well as situations where one or more ofour businesses have access to material non-public
information that may not be shared with our otherbusinesses and situations where we may be a creditor of anentity with which we also have an advisory or otherrelationship.
In addition, our status as a BHC subjects us to heightened
regulation and increased regulatory scrutiny by the FRB
with respect to transactions between GS Bank USA and its
subsidiaries and entities that are or could be viewed asaffiliates of ours and, under the Volcker Rule, transactions
between us and covered funds.
We have extensive procedures and controls that aredesigned to identify and address conflicts of interest,
including those designed to prevent the improper sharing of
information
among
our
businesses.
However,
appropriately identifying and dealing with conflicts ofinterest is complex and difficult, and our reputation, which
is one of our most important assets, could be damaged andthe willingness of clients to enter into transactions with us
may be adversely affected if we fail, or appear to fail, toidentify, disclose and deal appropriately with conflicts ofinterest. In addition, potential or perceived conflicts could
give rise to litigation or regulatory enforcement actions.
Additionally, our One Goldman Sachs initiative aims toincrease collaboration among our businesses, which may
increase the potential for actual or perceived conflicts ofinterest and improper information sharing.
We may be adversely affected by increased
governmental and regulatory scrutiny or negative
publicity.
Governmental scrutiny from regulators, legislative bodies
and law enforcement agencies with respect to mattersrelating to compensation, our business practices, our pastactions and other matters remains at high levels. Politicaland public sentiment regarding financial institutions has in
the past and may in the future result in a significant amountof adverse press coverage, as well as adverse statements or
charges by regulators or other government officials. Press
coverage and other public statements that assert some formof wrongdoing (including, in some cases, press coverageand public statements that do not directly involve us) often
result in some type of investigation by regulators, legislatorsand law enforcement officials or in lawsuits.
Goldman Sachs 2021 Form 10-K

45

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Responding to these investigations and lawsuits, regardlessof the ultimate outcome of the proceeding, is time-consuming
and expensive and can divert the time and effort of our senior
management from our business. Penalties and fines sought byregulatory authorities have increased substantially andcertain regulators have been more likely in recent years tocommence enforcement actions or to support legislation
targeted at the financial services industry. Governmental
authorities may also be more likely to pursue criminal orother actions, including seeking admissions of wrongdoingor guilty pleas, in connection with the resolution of an
inquiry or investigation to the extent a company is viewed ashaving previously engaged in criminal, regulatory or othermisconduct. Adverse publicity, governmental scrutiny andlegal and enforcement proceedings can also have a negative
impact on our reputation and on the morale andperformance of our employees, which could adversely affectour businesses and results of operations.
The financial services industry generally and our businesses
in particular have been subject to negative publicity. Our
reputation and businesses may be adversely affected bynegative publicity or information regarding our businesses
and personnel, whether or not accurate or true, that may beposted on social media or other internet forums or publishedby news organizations. Postings on these types of forums
may also adversely impact risk positions of our clients andother parties that owe us money, securities or other assets
and increase the chance that they will not perform their
obligations to us or reduce the revenues we receive from theiruse of our services. The speed and pervasiveness with which
information can be disseminated through these channels, inparticular social media, may magnify risks relating tonegative publicity.
Substantial civil or criminal liability or significant
regulatory action against us could have material
adverse financial effects or cause us significant
reputational harm, which in turn could seriously harm
our business prospects.
We face significant legal risks in our businesses, and thevolume of claims and amount of damages and penalties
claimed in litigation and regulatory proceedings against
financial institutions remain high. See Notes 18 and 27 to theconsolidated financial statements in Part II, Item 8 of thisForm 10-K for information about certain of our legal andregulatory proceedings and investigations. We have seen legal
claims by consumers and clients increase in a market
downturn and employment-related claims increase following
periods in which we have reduced our headcount.
Additionally, governmental entities have been plaintiffs andare parties in certain of our legal proceedings, and we may face
future civil or criminal actions or claims by the same or othergovernmental entities, as well as follow-on civil litigation thatis often commenced after regulatory settlements.
46

Goldman Sachs 2021 Form 10-K

Significant settlements by several large financial
institutions, including, in some cases, us, withgovernmental entities have been publicly announced. The
trend of large settlements with governmental entities may
adversely affect the outcomes for other financial
institutions in similar actions, especially where
governmental officials have announced that the large
settlements will be used as the basis or a template for othersettlements. The uncertain regulatory enforcement
environment makes it difficult to estimate probable losses,
which can lead to substantial disparities between legal
reserves and subsequent actual settlements or penalties.
Claims of collusion or anti-competitive conduct havebecome more common. Civil cases have been brought
against financial institutions (including us) alleging
bid-rigging, group boycotts or other anti-competitive
practices. Antitrust laws generally provide for joint andseveral liability and treble damages. These claims haveresulted in significant settlements in the past and may do soin the future.
We are subject to laws and regulations worldwide,
including the FCPA and the U.K. Bribery Act, relating tocorrupt and illegal payments to, and hiring practices withregard to, government officials and others. Violation ofthese or similar laws and regulations have in the past
resulted in and could in the future result in significant
monetary penalties. Such violations could also result insevere restrictions on our activities and damage to our
reputation.
Certain law enforcement authorities have recently required
admissions of wrongdoing, and, in some cases, criminal
pleas, as part of the resolutions of matters brought against
financial institutions or their employees. See for example,“1MDB-Related Matters” in Note 27 to the consolidated
financial statements in Part II, Item 8 of this Form 10-K.
Any such resolution of a criminal matter involving us or our
employees could lead to increased exposure to civil
litigation, could adversely affect our reputation, could
result in penalties or limitations on our ability to conduct
our activities generally or in certain circumstances andcould have other negative effects. Further, as a result of the
1MDB settlement, we are no longer a “well-known
seasoned issuer,” which places limitations on the manner inwhich we can market our securities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESIn conducting our businesses around the world, weare subject to political, legal, regulatory and otherrisks that are inherent in operating in many countries.
In conducting our businesses and supporting our global
operations, we are subject to risks of possible
nationalization, expropriation, price controls, capital
controls, exchange controls, communications and othercontent restrictions, and other restrictive governmental
actions. For example, sanctions have been imposed by the
U.S. and the E.U. on certain individuals and companies in
Russia and Venezuela. In many countries, the laws andregulations applicable to the securities and financial
services industries and many of the transactions in which
we are involved are uncertain and evolving, and it may bedifficult for us to determine the exact requirements of local
laws in every market. We have been in some cases subject todivergent and conflicting laws and regulations acrossmarkets, and we are increasingly subject to the risk that thejurisdictions in which we operate may implement laws andregulations that directly conflict with those of anotherjurisdiction. Any determination by local regulators that wehave not acted in compliance with the application of local
laws in a particular market or our failure to develop
effective working relationships with local regulators could
have a significant and negative effect not only on ourbusinesses in that market, but also on our reputation
generally. Further, in some jurisdictions a failure, or alleged
failure, to comply with laws and regulations has subjected
and may in the future subject us and our personnel not only
to civil actions, but also criminal actions and othersanctions. We are also subject to the enhanced risk thattransactions we structure might not be legally enforceable
in all cases.
While business and other practices throughout the world
differ, our principal entities are subject in their operations
worldwide to rules and regulations relating to corrupt andillegal payments, hiring practices and money laundering, as
well as laws relating to doing business with certain
individuals, groups and countries, such as the FCPA, the
BSA and the U.K. Bribery Act. While we have invested andcontinue to invest significant resources in training and incompliance monitoring, the geographical diversity of ouroperations, employees, clients and consumers, as well as thevendors and other third parties that we deal with, greatly
increases the risk that we may be found in violation of suchrules or regulations and any such violation could subject us
to significant penalties or adversely affect our reputation.
See for example, “1MDB-Related Matters” in Note 27 tothe consolidated financial statements in Part II, Item 8 ofthis Form 10-K.

In addition, there have been a number of highly publicizedcases around the world, involving actual or alleged fraud orother misconduct by employees in the financial services
industry, and we have had and may in the future have
employee misconduct. This misconduct has included andmay also in the future include intentional efforts to ignore
or circumvent applicable policies, rules or procedures ormisappropriation of funds and the theft of proprietary
information, including proprietary software. It is notalways possible to deter or prevent employee misconduct
and the precautions we take to prevent and detect thisactivity have not been and may not be effective in all cases,
as reflected by the settlements relating to 1MDB.
The application of regulatory strategies andrequirements in the U.S. and non-U.S. jurisdictions tofacilitate the orderly resolution of large financial
institutions could create greater risk of loss for Group
Inc.’s security holders.
As described in “Business — Regulation — Banking
Supervision and Regulation — Insolvency of an IDI or a
BHC,” if the FDIC is appointed as receiver under OLA, therights of Group Inc.’s creditors would be determined under
OLA, and substantial differences exist in the rights ofcreditors between OLA and the U.S. Bankruptcy Code,including the right of the FDIC under OLA to disregard thestrict priority of creditor claims in some circumstances,which could have a material adverse effect on our
debtholders.
The FDIC has announced that a single point of entry
strategy may be a desirable strategy under OLA to resolve alarge financial institution in a manner that would, among
other things, impose losses on shareholders, debtholders
and other creditors of the top-tier BHC (in our case, Group
Inc.), while the BHC’s subsidiaries may continue to operate.
It is possible that the application of the single point of entry
strategy under OLA, in which Group Inc. would be the only
entity to enter resolution proceedings (and its material
broker-dealer, bank and other operating entities would notenter resolution proceedings), would result in greater losses
to Group Inc.’s security holders (including holders of our
fixed rate, floating rate and indexed debt securities), thanthe losses that would result from the application of abankruptcy proceeding or a different resolution strategy,
such as a multiple point of entry resolution strategy forGroup Inc. and certain of its material subsidiaries.

Goldman Sachs 2021 Form 10-K

47

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Assuming Group Inc. entered resolution proceedings andthat support from Group Inc. or other available resources
to its subsidiaries was sufficient to enable the subsidiaries toremain solvent, losses at the subsidiary level would betransferred to Group Inc. and ultimately borne by Group
Inc.’s security holders, third-party creditors of Group Inc.’s
subsidiaries would receive full recoveries on their claims,
and Group Inc.’s security holders (including ourshareholders, debtholders and other unsecured creditors)
could face significant and possibly complete losses. In thatcase, Group Inc.’s security holders would face losses while
the third-party creditors of Group Inc.’s subsidiaries would
incur no losses because the subsidiaries would continue tooperate and would not enter resolution or bankruptcy
proceedings. In addition, holders of Group Inc.’s eligible
long-term debt and holders of Group Inc.’s other debt
securities could face losses ahead of its other similarly
situated creditors in a resolution under OLA if the FDIC
exercised its right, described above, to disregard the priorityof creditor claims.
OLA also provides the FDIC with authority to cause
creditors and shareholders of the financial company inreceivership to bear losses before taxpayers are exposed tosuch losses, and amounts owed to the U.S. government
would generally receive a statutory payment priority overthe claims of private creditors, including senior creditors.
In addition, under OLA, claims of creditors (including
debtholders) could be satisfied through the issuance ofequity or other securities in a bridge entity to which Group
Inc.’s assets are transferred. If such a securities-for-claims
exchange were implemented, there can be no assurance thatthe value of the securities of the bridge entity would be
sufficient to repay or satisfy all or any part of the creditor
claims for which the securities were exchanged. While the
FDIC has issued regulations to implement OLA, not all
aspects of how the FDIC might exercise this authority are
known and additional rulemaking is possible.

In addition, certain jurisdictions, including the U.K. and the
E.U., have implemented resolution regimes to provide
resolution authorities with the ability to recapitalize afailing entity by writing down its unsecured debt orconverting its unsecured debt into equity. Such “bail-in”
powers are intended to enable the recapitalization of a
failing institution by allocating losses to its shareholders
and unsecured debtholders. For example, the Bank ofEngland requires a certain amount of intercompany
funding that we provide to our material U.K. subsidiaries tocontain a contractual trigger to expressly permit the Bankof England to exercise such “bail-in” powers in certain
circumstances. If the intercompany funding we provide to
our subsidiaries is “bailed in,” Group Inc.’s claims on its
subsidiaries would be subordinated to the claims of thesubsidiaries’ third-party creditors or written down. U.S.
regulators are considering and non-U.S. authorities haveadopted requirements that certain subsidiaries of large
financial institutions maintain minimum amounts of total
loss-absorbing capacity that would pass losses up from thesubsidiaries to the top-tier BHC and, ultimately, to security
holders of the top-tier BHC in the event of failure.
The application of Group Inc.’s proposed resolution
strategy could result in greater losses for Group Inc.’s
security holders.
In our resolution plan, Group Inc. would be resolved under
the U.S. Bankruptcy Code. The strategy described in our
resolution plan is a variant of the single point of entry
strategy: Group Inc. and Goldman Sachs Funding LLC(Funding IHC), a wholly-owned, direct subsidiary of Group
Inc., would recapitalize and provide liquidity to certain
major subsidiaries, including through the forgiveness ofintercompany indebtedness, the extension of the maturities
of intercompany indebtedness and the extension of
additional intercompany loans. If this strategy weresuccessful, creditors of some or all of Group Inc.’s major
subsidiaries would receive full recoveries on their claims,
while Group Inc.’s security holders could face significant
and possibly complete losses.
To facilitate the execution of our resolution plan, weformed Funding IHC. In exchange for an unsecured
subordinated funding note and equity interest, Group Inc.
transferred certain intercompany receivables andsubstantially all of its GCLA to Funding IHC, and agreed totransfer additional GCLA above prescribed thresholds.

48

Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESWe also put in place a Capital and Liquidity Support
Agreement (CLSA) among Group Inc., Funding IHC andour major subsidiaries. Under the CLSA, Funding IHC has
provided Group Inc. with a committed line of credit thatallows Group Inc. to draw sufficient funds to meet its cashneeds during the ordinary course of business. In addition, if
our financial resources deteriorate so severely that
resolution may be imminent, (i) the committed line of credit
will automatically terminate and the unsecured
subordinated funding note will automatically be forgiven,(ii) all intercompany receivables owed by the major
subsidiaries to Group Inc. will be transferred to Funding
IHC or their maturities will be extended to five years,(iii) Group Inc. will be obligated to transfer substantially allof its remaining intercompany receivables and GCLA (otherthan an amount to fund anticipated bankruptcy expenses)
to Funding IHC, and (iv) Funding IHC will be obligated toprovide capital and liquidity support to the major
subsidiaries. Group Inc.’s and Funding IHC’s obligations
under the CLSA are secured pursuant to a related security
agreement. Such actions would materially and adversely
affect Group Inc.’s liquidity. As a result, during a period ofsevere stress, Group Inc. might commence bankruptcy
proceedings at an earlier time than it otherwise would if the
CLSA and related security agreement had not been
implemented.
If Group Inc.’s proposed resolution strategy weresuccessful, Group Inc.’s security holders could face losses
while the third-party creditors of Group Inc.’s major
subsidiaries would incur no losses because thosesubsidiaries would continue to operate and not enter
resolution or bankruptcy proceedings. As part of thestrategy, Group Inc. could also seek to elevate the priorityof its guarantee obligations relating to its major
subsidiaries’ derivative contracts or transfer them toanother entity so that cross-default and early terminationrights would be stayed under the ISDA Protocols, asapplicable, which would result in holders of Group Inc.’seligible long-term debt and holders of Group Inc.’s otherdebt securities incurring losses ahead of the beneficiaries of
those guarantee obligations. It is also possible that holdersof Group Inc.’s eligible long-term debt and other debt
securities could incur losses ahead of other similarly
situated creditors of Group Inc.’s major subsidiaries.
If Group Inc.’s proposed resolution strategy were notsuccessful, Group Inc.’s financial condition would be
adversely impacted and Group Inc.’s security holders,
including debtholders, may as a consequence be in a worse
position than if the strategy had not been implemented. In
all cases, any payments to debtholders are dependent on
our ability to make such payments and are therefore subject
to our credit risk.

As a result of our recovery and resolution planning
processes, including incorporating feedback from ourregulators, we may incur increased operational, funding orother costs and face limitations on our ability to structure
our internal organization or engage in internal or external
activities in a manner that we may otherwise deem mostoperationally efficient.
Our commodities activities, particularly our physicalcommodities activities, subject us to extensive
regulation and involve certain potential risks,
including environmental, reputational and other risks
that may expose us to significant liabilities and costs.
As part of our commodities business, we purchase and sellcertain physical commodities, arrange for their storage andtransport, and engage in market making of commodities.
The commodities involved in these activities may include
crude oil, refined oil products, natural gas, liquefied naturalgas, electric power, agricultural products, metals (base andprecious), minerals (including unenriched uranium),emission credits, coal, freight and related products andindices.
We make investments in and finance entities that engage inthe production, storage and transportation of numerous
commodities, including many of the commodities
referenced above.
These activities subject us and/or the entities in which weinvest to extensive and evolving federal, state and local
energy, environmental, antitrust and other governmental
laws and regulations worldwide, including environmental
laws and regulations relating to, among others, air quality,
water quality, waste management, transportation of
hazardous substances, natural resources, site remediationand health and safety. Additionally, rising climate change
concerns have led to additional regulation that could
increase the operating costs and adversely affect the
profitability of certain of our investments.
There may be substantial costs in complying with current or
future laws and regulations relating to our commoditiesrelated activities and investments. Compliance with theselaws and regulations could require significant commitmentsof capital toward environmental monitoring, renovation ofstorage facilities or transport vessels, payment of emission
fees and carbon or other taxes, and application for, andholding of, permits and licenses.

Goldman Sachs 2021 Form 10-K

49

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Commodities involved in our intermediation activities andinvestments are also subject to the risk of unforeseen or
catastrophic events, which are likely to be outside of ourcontrol, including those arising from the breakdown or
failure of transport vessels, storage facilities or otherequipment or processes or other mechanical malfunctions,fires, leaks, spills or release of hazardous substances,
performance below expected levels of output or efficiency,
terrorist attacks, extreme weather events or other natural
disasters or other hostile or catastrophic events. In addition,
we rely on third-party suppliers or service providers to
perform their contractual obligations and any failure on
their part, including the failure to obtain raw materials at
reasonable prices or to safely transport or store
commodities, could expose us to costs or losses. Also, while
we seek to insure against potential risks, we may not be able
to obtain insurance to cover some of these risks and theinsurance that we have may be inadequate to cover our
losses.
The occurrence of any of such events may prevent us fromperforming under our agreements with clients, may impair
our operations or financial results and may result in
litigation, regulatory action, negative publicity or otherreputational harm.
We may also be required to divest or discontinue certain of
these activities for regulatory or legal reasons or due to thetransition to a less carbon-dependent economy in response
to climate change.

Competition
Our results have been and may in the future be
adversely affected by the composition of our clientbase.
Our client base is not the same as that of our major
competitors. Our businesses may have a higher or lower
percentage of clients in certain industries or markets thansome or all of our competitors. Therefore, unfavorable
industry developments or market conditions affecting
certain industries or markets have resulted in the past andmay result in the future in our businesses underperforming
relative to similar businesses of a competitor if ourbusinesses have a higher concentration of clients in suchindustries or markets. For example, our market-making
businesses have a higher percentage of clients with actively
managed assets than some of our competitors and suchclients have in the past and may in the future bedisproportionately affected by low volatility.

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Goldman Sachs 2021 Form 10-K

Correspondingly, favorable or simply less adverse
developments or market conditions involving industries ormarkets in a business where we have a lower concentrationof clients in such industry or market have also resulted in
the past and may result in the future in our
underperforming relative to a similar business of acompetitor that has a higher concentration of clients in suchindustry or market. For example, we have a smaller
corporate client base in our market-making businesses thansome of our peers and therefore those competitors may
benefit more from increased activity by corporate clients.
Similarly, we have not historically engaged in retail equities
intermediation to the same extent as other financial
institutions, which has in the past and could in the futureadversely affect our market share in equities execution.
The financial services industry is highly competitive.
The financial services industry and all of our businesses areintensely competitive, and we expect them to remain so. We
compete on the basis of a number of factors, includingtransaction execution, our products and services,innovation, reputation, creditworthiness and price. There
has been substantial consolidation and convergence among
companies in the financial services industry. This has
hastened the globalization of the securities and otherfinancial services markets. As a result, we have had tocommit capital to support our international operations andto execute large global transactions. To the extent we
expand into new business areas and new geographic
regions, we will face competitors with more experience andmore established relationships with clients, regulators andindustry participants in the relevant market, which could
adversely affect our ability to expand.
Governments and regulators have adopted regulations,
imposed taxes, adopted compensation restrictions orotherwise put forward various proposals that have
impacted or may impact our ability to conduct certain of
our businesses in a cost-effective manner or at all in certain
or all jurisdictions, including proposals relating to
restrictions on the type of activities in which financial
institutions are permitted to engage. These or other similar
rules, many of which do not apply to all our U.S. or
non-U.S. competitors, could impact our ability to compete
effectively.
Pricing and other competitive pressures in our businesses
have continued to increase, particularly in situations wheresome of our competitors may seek to increase market shareby reducing prices. For example, in connection withinvestment banking and other assignments, in response tocompetitive pressure we have experienced, we haveextended and priced credit at levels that may not always
fully compensate us for the risks we take.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESThe financial services industry is highly interrelated in thata significant volume of transactions occur among a limited
number of members of that industry. Many transactions are
syndicated to other financial institutions and financial
institutions are often counterparties in transactions. This
has led to claims by other market participants andregulators that such institutions have colluded in order tomanipulate markets or market prices, including allegations
that antitrust laws have been violated. While we haveextensive procedures and controls that are designed to
identify and prevent such activities, allegations of suchactivities, particularly by regulators, can have a negative
reputational impact and can subject us to large fines andsettlements, and potentially significant penalties, including
treble damages.
The growth of electronic trading and the introductionof new products and technologies, including trading
technologies and cryptocurrencies, has increased
competition.
Technology is fundamental to our business and ourindustry. The growth of electronic trading and theintroduction of new technologies is changing our businesses
and presenting us with new challenges. Securities, futuresand options transactions are increasingly occurring
electronically, both on our own systems and through otheralternative trading systems, and it appears that the trend
toward alternative trading systems will continue. Some ofthese alternative trading systems compete with us,
particularly our exchange-based market-making activities,
and we may experience continued competitive pressures inthese and other areas. In addition, the increased use by ourclients of low-cost electronic trading systems and directelectronic access to trading markets could cause a reduction
in commissions and spreads. As our clients increasingly use
our systems to trade directly in the markets, we may incur
liabilities as a result of their use of our order routing andexecution infrastructure.
We have invested significant resources into thedevelopment of electronic trading systems and expect tocontinue to do so, but there is no assurance that therevenues generated by these systems will yield an adequate
return, particularly given the generally lower commissions
arising from electronic trades.

In addition, the emergence, adoption and evolution of newtechnologies, including distributed ledgers, such as
cryptocurrencies and blockchain, have required us to invest
resources to adapt our existing products and services, andwe expect to continue to make such investments, which
could be material. The adoption and evolution of such newtechnologies may also increase our compliance andregulatory costs. Further, technologies, such as
cryptocurrencies, that do not require intermediation could
also significantly disrupt payments processing and otherfinancial services. Regulatory limitations on our
involvement in products and platforms involving
technologies such as cryptocurrencies may not apply
equally or in some cases at all to certain of our competitors.
We may not be as timely or successful in developing or
integrating, or even able to develop or integrate, newproducts and technologies, such as cryptocurrencies, into
our existing products and services, adapting to changes in
consumer preferences or achieving market acceptance ofour products and services, any of which could affect ourability to attract or retain clients, cause us to lose market
share or result in service disruptions and in turn reduce ourrevenues or otherwise adversely affect us.
Our businesses would be adversely affected if we areunable to hire and retain qualified employees.
Our performance is largely dependent on the talents andefforts of highly skilled people; therefore, our continued
ability to compete effectively in our businesses, to manage
our businesses effectively and to expand into new
businesses and geographic areas depends on our ability to
attract new talented and diverse employees and to retain
and motivate our existing employees. Factors that affectour ability to attract and retain such employees include thelevel and composition of our compensation and benefits,
and our reputation as a successful business with a culture offairly hiring, training and promoting qualified employees.
As a significant portion of the compensation that we pay to
our employees is in the form of year-end discretionary
compensation, a significant portion of which is in the formof deferred equity-related awards, declines in our
profitability, or in the outlook for our future profitability,
as well as regulatory limitations on compensation levels andterms, can negatively impact our ability to hire and retain
highly qualified employees.

Goldman Sachs 2021 Form 10-K

51

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Competition from within the financial services industry andfrom businesses outside the financial services industry,including the technology industry, for qualified employees
has often been intense. We have experienced increased
competition in hiring and retaining employees to address
the demands of, expanding consumer-oriented businesses
and our technology initiatives. This is also the case inemerging and growth markets, where we are often
competing for qualified employees with entities that have asignificantly greater presence or more extensive experiencein the region.
Changes in law or regulation in jurisdictions in which ouroperations are located that affect taxes on our employees’
income, or the amount or composition of compensation,
may also adversely affect our ability to hire and retain
qualified employees in those jurisdictions.
As described further in “Business — Regulation —Compensation Practices” in Part I, Item 1 of thisForm 10-K, our compensation practices are subject toreview by, and the standards of, the FRB. As a large global
financial and banking institution, we are subject tolimitations on compensation practices (which may or may
not affect the companies with which we compete for talent)by the FRB, the PRA, the FCA, the FDIC and otherregulators worldwide. These limitations have shaped ourcompensation practices, which has in some cases adversely
affected our ability to attract and retain talented employees,
in particular in relation to companies not subject to theselimitations, and future legislation or regulation may have
similar adverse effects.
Our operating expenses and efficiency ratio depend, in part,on our overall headcount and the proportion of ouremployees located in strategic locations. Our future humancapital resource requirements and the benefits provided bystrategic locations are uncertain, and we may not realize thebenefits we anticipate.

52

Goldman Sachs 2021 Form 10-K

MarketDevelopments
Business Environment

andGeneralOur businesses, financial condition, liquidity andresults of operations have been and may in the future
be adversely affected by the COVID-19 pandemic.
The COVID-19 pandemic created economic and financial
disruptions that have in the past adversely affected and may
in the future adversely affect our business, financial
condition, liquidity and results of operations. The extent towhich the COVID-19 pandemic will negatively affect ourbusinesses, financial condition, liquidity and results ofoperations will depend on future developments, including
the emergence of new variants of COVID-19 and theeffectiveness of vaccines and treatments over the long term
and against new variants, which are highly uncertain andcannot be predicted.
While financial markets have rebounded from thesignificant declines that occurred early in the pandemic andglobal economic conditions generally improved in 2021,
certain of the circumstances that arose or became more
pronounced after the onset of the COVID-19 pandemic
persisted in 2021, including (i) relatively weak consumer
confidence; (ii) low levels of the federal funds rate andyields on U.S. Treasury securities which, at times, were nearzero; (iii) ongoing heightened credit risk with regard toindustries that have been most severely impacted by the
pandemic, including, at times, oil and gas, gaming andlodging, and airlines; (iv) significant interest at times byinvestors in liquidity products, which generate lower fees,
relative to risk assets, resulting in these products comprisinga higher share of AUS as compared to the pre-pandemic
composition; (v) higher cyber security, information security
and operational risks; and (vi) interruptions in the supply
chain that have adversely affected many businesses andhave contributed to higher rates of inflation.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Depending on the duration and severity of the pandemic
going forward, as well as the effects of the pandemic on
consumer and corporate confidence, the conditions noted
above could continue for an extended period and otheradverse developments may occur or reoccur, including (i) arepeat, or worse, of the decline in the valuation of equity,
fixed-income and commodity markets that occurred at theoutset of the pandemic; (ii) market dislocations that may
make hedging strategies less effective or ineffective; (iii) a
reduction in fees on AUS due to declines in the valuation ofassets or a protracted trend toward asset classes thatgenerate lower fees; (iv) disruption in the new issuancemarkets for debt and equity, leading to a decline inunderwriting volumes; (v) declines in completed mergers
and acquisitions; (vi) a deterioration in the liquidity profile
of corporate borrowers, resulting in additional draws on
credit lines; (vii) defaults by consumers or corporate clientson loans; (viii) changes in consumer spending or borrowing
patterns; and (ix) greater challenges in valuing derivative
positions and associated collateral, leading to significant
increases in collateral calls and valuation disputes.
The effects of the COVID-19 pandemic on economic andmarket conditions have in the past and may in the futurealso increase demands on our liquidity as we meet clientneeds. Likewise, these adverse developments have in thepast and may in the future affect our capital and leverage
ratios. The effects of the COVID-19 pandemic and FRB
requirements have in the past limited and may in the future
limit capital distributions.
Governmental authorities worldwide have taken increased
measures to stabilize the markets and support economic
growth. The continued success of these measures is
unknown and they may not be sufficient to address future
market dislocations or avert severe and prolonged
reductions in economic activity.

Certain of our businesses, our funding instruments
and financial products may be adversely affected bychanges in or the discontinuance of Interbank OfferedRates (IBORs), in particular LIBOR.
The FCA and the administrator of LIBOR have announced
that the publication of the most commonly used USD LIBOR
settings will cease to be provided or cease to be representative
after June 30, 2023. The publication of all other LIBOR
settings ceased to be provided or ceased to be representative
as of December 31, 2021. The U.S. federal banking agencies
had also issued guidance strongly encouraging banking
organizations to cease using the USD LIBOR as a reference
rate in new contracts by December 31, 2021 at the latest. As
the transition from LIBOR is ongoing, there continues to be
substantial uncertainty as to the ultimate effect of thetransition on the financial markets for LIBOR-linked
financial instruments. Similar developments have occurredwith respect to other IBORs.
Uncertainty regarding IBORs and the taking of discretionary
actions or negotiation or implementation of fallback
provisions could result in pricing volatility, loss of market
share in certain products, adverse tax or accounting impacts,
compliance, legal and operational costs and risks associatedwith client disclosures, as well as systems disruption, model
disruption and other business continuity issues. In addition,
uncertainty relating to IBORs could result in increased
capital requirements for us given potential low transaction
volumes, a lack of liquidity or limited observability for
exposures linked to IBORs or any emerging successor rates
and operational incidents associated with changes in and thediscontinuance of IBORs.
The language in our contracts and financial instruments thatdefine IBORs, in particular LIBOR, have developed over timeand have various events that trigger when a successor rate to
the designated rate would be selected. Once a trigger issatisfied, contracts and financial instruments often give thecalculation agent (which may be us) discretion over the
successor rate or benchmark to be selected. As a result, for themost commonly used USD LIBOR settings, there continues tobe considerable uncertainty as to how the financial services
industry will address the discontinuance of designated rates incontracts and financial instruments or such designated rates
ceasing to be acceptable reference rates. This uncertainty could
ultimately result in client disputes and litigation surrounding
the proper interpretation of our IBOR-based contracts andfinancial instruments. For LIBOR settings that ceased to beprovided or ceased to be representative as of December 2021,
discretionary actions taken in connection with theimplementation of fallback provisions could also result inclient disputes and litigation particularly for derivatives andother synthetic instruments. Although we have adhered to the
ISDA IBOR Fallbacks Protocol, the protocol is applicable toderivatives when both parties adhere to the protocol orotherwise agree for it to apply to their derivatives.
Goldman Sachs 2021 Form 10-K

53

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Further, the discontinuation of an IBOR, changes in an
IBOR or changes in market acceptance of any IBOR as areference rate may also adversely affect the yield on loans or
securities held by us, amounts paid on securities we haveissued, amounts received and paid on derivative
instruments we have entered into, the value of such loans,securities or derivative instruments, the trading market for
securities, the terms of new loans being made using
different or modified reference rates, our ability toeffectively use derivative instruments to manage risk, or theavailability or cost of our floating-rate funding and our
exposure to fluctuations in interest rates.
Certain of our businesses and our funding
instruments may be adversely affected by changes inother reference rates, currencies, indexes, baskets or
ETFs to which products we offer or funding that weraise are linked.
Many of the products that we own or that we offer, such as
structured notes, warrants, swaps or security-based swaps,
pay interest or determine the principal amount to be paid atmaturity or in the event of default by reference to rates orby reference to an index, currency, basket, ETF or otherfinancial metric (the underlier). In the event that thecomposition of the underlier is significantly changed, byreference to rules governing such underlier or otherwise, theunderlier ceases to exist (for example, in the event that acountry withdraws from the Euro or links its currency to or
delinks its currency from another currency or benchmark,an index or ETF sponsor materially alters the compositionof an index or ETF, or stocks in a basket are delisted or
become impermissible to be included in the index or ETF),
the underlier ceases to be recognized as an acceptable
market benchmark or there are legal or regulatory
constraints on linking a financial instrument to theunderlier, we may experience adverse effects consistent
with those described above for IBORs.

54

Goldman Sachs 2021 Form 10-K

We face enhanced risks as new business initiatives
and acquisitions lead us to engage in new activities,
operate in new locations, transact with a broader
array of clients and counterparties and expose us to
new asset classes and new markets.
A number of our recent and planned business initiatives andexpansions of existing businesses, including throughacquisitions and partnership arrangements, may bring us
into contact, directly or indirectly, with individuals andentities that are not within our traditional client andcounterparty base, expose us to new asset classes and newmarkets, and present us with integration challenges. For
example, we continue to transact business and invest in new
regions, including a wide range of emerging and growthmarkets, and we expect this trend to continue. Various
emerging and growth market countries have experienced
severe economic and financial disruptions, including
significant devaluations of their currencies, defaults orthreatened defaults on sovereign debt, capital and currency
exchange controls, and low or negative growth rates intheir economies. The possible effects of any of these
conditions include an adverse impact on our businesses andincreased volatility in financial markets generally.
Furthermore, in a number of our businesses, including where
we make markets, invest and lend, we own interests in, orotherwise become affiliated with the ownership and operationof, public services, such as airports, toll roads and shipping
ports, as well as physical commodities and commodities
infrastructure components, both within and outside the U.S.
We have increased and intend to further increase ourconsumer-oriented deposit-taking and lending activities. For
example, we now issue credit cards to consumers andthrough our pending acquisition of GreenSky, we intend to
expand our offering of point-of-sale financing. To the extent
we engage in those and other consumer-oriented activities,
we have faced, and would continue to face, additional
compliance, legal and regulatory risk, increased reputationalrisk and increased operational risk due to, among otherthings, higher transaction volumes and significantly
increased retention and transmission of consumer and client
information. Acquisitions and new products can also expose
us to new or different types of risks. For example, providing
point-of-sale financing through GreenSky will also subject us
to risks relating to retaining and attracting merchants andservicing loans for other banks, as well as potential liability
for remediation costs if merchants fail to fulfill their
obligations to consumers. We are also subject to additional
legal requirements, including with respect to suitability andconsumer protection (for example, Regulation Best Interest,
fair lending laws and regulations and privacy laws andregulations). Further, identity fraud may increase and credit
reporting practices may change in a manner that makes it
more difficult for financial institutions, such as us, toevaluate the creditworthiness of consumers.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

We have increased and intend to further increase ourtransaction banking activities. As a result, we expect to face
additional compliance, legal and regulatory risk, including
with respect to know-your-customer, anti-money launderingand reporting requirements and prohibitions on transfers ofproperty belonging to countries, entities and individuals
subject to sanctions by U.S. or other governmental authorities.
New business initiatives expose us to new and enhanced
risks, including risks associated with dealing withgovernmental entities, reputational concerns arising fromdealing with different types of clients, business partners,
counterparties and investors, greater regulatory scrutiny ofthese activities, increased credit-related, market, sovereignand operational risks, risks arising from accidents or acts ofterrorism, and reputational concerns with the manner inwhich certain assets are being operated or held or in which
we interact with these clients, business partners,
counterparties and investors. Legal, regulatory andreputational risks may also exist in connection with activities
and transactions involving new products or markets where
there is regulatory uncertainty or where there are different or
conflicting regulations depending on the regulator or thejurisdiction involved, particularly where transactions in suchproducts may involve multiple jurisdictions.
We have developed and pursued new business and strategic
initiatives, including acquisitions, and expect to continue todo so. If and to the extent we are unable to successfully
execute those initiatives, we may incur unanticipated costs
and losses, and face other adverse consequences, such as
negative reputational effects. In addition, the actual effectsof pursuing those initiatives may differ, possibly materially,
from the benefits that we expect to realize from them, suchas generating additional revenues, achieving expensesavings, reducing operational risk exposures or using
capital and funding more efficiently. Engaging in newactivities exposes us to a variety of risks, including that wemay be unable to successfully develop new, competitive,
efficient and effective systems and processes, and hire andretain the necessary personnel. Due to our lack of historicalexperience with unsecured consumer lending, our loan loss
assumptions may prove to be incorrect and we may incur
losses significantly above those which we originally
anticipated in entering the business or in expanding the
product offerings for the business.

We may not be able to fully realize the expected
benefits or synergies from acquisitions in the timeframes we expect, or at all.
We have been engaging in selective acquisitions and expect
to continue to do so in the future and these acquisitions
may, individually or in the aggregate, be material to us. Any
future acquisitions could involve the issuance of common
stock and/or the payment of cash as consideration. The
success of our acquisitions will depend, in part, on ourability to integrate the acquired businesses and realize
anticipated synergies, cost savings and growth
opportunities. We may face numerous risks anduncertainties in combining and integrating the relevantbusinesses and systems, including the need to combine or
separate accounting and data processing systems andmanagement controls and to integrate relationships withclients, counterparties, regulators and others in connection
with acquisitions. Integration of acquired businesses istime-consuming and could disrupt our ongoing businesses,
produce unforeseen regulatory or operating difficulties,cause us to incur incremental expenses or require
incremental financial, management and other resources. It
is also possible that an acquisition, once announced, may
not close due to the failure to satisfy applicable closing
conditions, such as the receipt of necessary shareholder or
regulatory approvals.
There is no assurance that any of our acquisitions will be
successfully integrated or yield all of the expected positive
benefits and synergies in the time frames that we expect, orat all. If we are not able to integrate our acquisitions
successfully, our results of operations, financial conditionand cash flows could be adversely affected.

In recent years, we have invested, and may continue toinvest, more in businesses that we expect will generate ahigher level of more consistent revenues. In order to develop
and be able to offer consumer financial products thatcompete effectively, we have made and expect to continue
to make significant investments in technology and humancapital resources in connection with our consumer-oriented
activities. Such investments and acquisitions may not be
successful or have returns similar to our other businesses.
Goldman Sachs 2021 Form 10-K

55

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Item 1B. Unresolved Staff Comments

Item 3.

There are no material unresolved written comments thatwere received from the SEC staff 180 days or more before
the end of our fiscal year relating to our periodic or current
reports under the Exchange Act.

We are involved in a number of judicial, regulatory andarbitration proceedings concerning matters arising inconnection with the conduct of our businesses. Many ofthese proceedings are in early stages, and many of thesecases seek an indeterminate amount of damages. We haveestimated the upper end of the range of reasonably possible
aggregate loss for matters where we have been able toestimate a range and we believe, based on currently
available information, that the results of matters where wehave not been able to estimate a range of reasonably
possible loss, in the aggregate, will not have a material
adverse effect on our financial condition, but may bematerial to our operating results in a given period. Given
the range of litigation and investigations presently underway, our litigation expenses may remain high. See“Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Use of Estimates”
in Part II, Item 7 of this Form 10-K. See Notes 18 and 27 tothe consolidated financial statements in Part II, Item 8 ofthis Form 10-K for information about our reasonably
possible aggregate loss estimate and judicial, regulatory andlegal proceedings.

Item 2.

Properties

In the U.S. and elsewhere in the Americas, we have offices
consisting of approximately 6.6 million square feet ofleased and owned space. Our principal executive offices arelocated at 200 West Street, New York, New York andconsist of approximately 2.1 million square feet. The
building is located on a parcel leased from Battery Park City
Authority pursuant to a ground lease. Under the lease,
Battery Park City Authority holds title to all improvements,
including the office building, subject to our right of
exclusive possession and use until June 2069, the expiration
date of the lease. Under the terms of the ground lease, we
made a lump sum ground rent payment in June 2007 of$161 million for rent through the term of the lease.
In Europe, the Middle East and Africa, we have offices
consisting of approximately 1.6 million square feet ofleased and owned space. Our European headquarters is
located in London at Plumtree Court, consisting ofapproximately 826,000 square feet under a lease which canbe terminated in 2039.
In Asia, Australia and New Zealand, we have offices
consisting of approximately 2.6 million square feet,including our offices in India, and regional headquarters inTokyo and Hong Kong. In India, we have offices withapproximately 1.6 million square feet, the majority ofwhich have leases that will expire in 2028.
In the preceding paragraphs, square footage figures areprovided only for properties that are used in the operationof our businesses. We regularly evaluate our space capacity
in relation to current and projected headcount. We may
incur exit costs in the future if we (i) reduce our spacecapacity or (ii) commit to, or occupy, new properties inlocations in which we operate and dispose of existing spacethat had been held for potential growth. These costs may bematerial to our operating results in a given period.

56Goldman Sachs 2021 Form 10-K

Item 4.

Legal Proceedings

Mine Safety Disclosures

Not applicable.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESPART II
Item 5. Market
forRegistrant’s
Common Equity, Related Stockholder
Matters and Issuer Purchases ofEquity Securities
The principal market on which our common stock is tradedis the NYSE under the symbol “GS.” Information relating
to the performance of our common stock from
December 31, 2016 through December 31, 2021 is set forthin “Supplemental Financial Information — Common Stock
Performance” in Part II, Item 8 of this Form 10-K. As of
February 11, 2022, there were 5,963 holders of record of
our common stock.
The table below presents purchases made by or on behalf ofGroup Inc. or any “affiliated purchaser” (as defined inRule 10b-18(a)(3) under the Exchange Act) of our common
stock during the fourth quarter of 2021.
Total Shares Maximum Shares
Total Average
Purchased as That May Yet Be
Shares Price Paid
Part of a Publicly Purchased Under
Purchased Per Share Announced Program
the Program

October
1,214,611 $411.65
November––
December––
Total
1,214,611

1,214,611––
1,214,611

Since March 2000, our Board has approved a repurchaseprogram authorizing repurchases of up to 605 million
shares of our common stock. The repurchase program iseffected primarily through regular open-market purchases(which may include repurchase plans designed to comply
with Rule 10b5-1 and accelerated share repurchases), theamounts and timing of which are determined primarily by
our current and projected capital position, but which may
also be influenced by general market conditions and theprevailing price and trading volumes of our common stock.
The repurchase program has no set expiration or
termination date.
Information relating to compensation plans under which
our equity securities are authorized for issuance is presented
in Part III, Item 12 of this Form 10-K.

34,390,960
34,390,960
34,390,960

Goldman Sachs 2021 Form 10-K

57

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis

Item 7. Management’s Discussion
and Analysis of Financial Condition
and Results of Operations
Introduction
The Goldman Sachs Group, Inc. (Group Inc. or parent
company), a Delaware corporation, together with its
consolidated subsidiaries, is a leading global financial
institution that delivers a broad range of financial services
across investment banking, securities, investment
management and consumer banking to a large anddiversified client base that includes corporations, financial
institutions, governments and individuals. Founded in
1869, we are headquartered in New York and maintain
offices in all major financial centers around the world. We
report our activities in four business segments: Investment
Banking, Global Markets, Asset Management, andConsumer & Wealth Management. See “Results ofOperations” for further information about our businesssegments.
When we use the terms “we,” “us” and “our,” we mean
Group Inc. and its consolidated subsidiaries. When we use
the term “our subsidiaries,” we mean the consolidated
subsidiaries of Group Inc. References to “this Form 10-K”
are to our Annual Report on Form 10-K for the year ended
December 31, 2021. All references to “the consolidated
financial statements” or “Supplemental Financial
Information” are to Part II, Item 8 of this Form 10-K. All
references to 2021, 2020 and 2019 refer to our years ended,or the dates, as the context requires, December 31, 2021,
December 31, 2020 and December 31, 2019, respectively.
Any reference to a future year refers to a year ending on
December 31 of that year.
Group Inc. is a bank holding company (BHC) and afinancial holding company regulated by the Board ofGovernors of the Federal Reserve System (FRB).

58

Goldman Sachs 2021 Form 10-K

In this discussion and analysis of our financial condition
and results of operations, we have included informationthat may constitute “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are not historical facts or statements of current
conditions, but instead represent only our beliefs regarding
future events, many of which, by their nature, areinherently uncertain and outside our control.
By identifying these statements for you in this manner, we
are alerting you to the possibility that our actual results,financial condition, liquidity and capital actions may differ,possibly materially, from the anticipated results, financial
condition, liquidity and capital actions in these forwardlooking statements. Important factors that could cause ourresults, financial condition, liquidity and capital actions todiffer from those in these statements include, among others,
those described in “Risk Factors” in Part I, Item 1A of thisForm 10-K and “Forward-Looking Statements” in Part I,
Item 1 of this Form 10-K.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
These statements may relate to, among other things, (i) our
future plans and results, including our target ROE, ROTE,
efficiency ratio, Common Equity Tier 1 (CET1) capital ratio
and firmwide assets under supervision (AUS) inflows, andhow they can be achieved, (ii) trends in or growth
opportunities for our businesses, including the timing, costs,
profitability, benefits and other aspects of business andstrategic initiatives and their impact on our efficiency ratio,(iii) our level of future compensation expense, including as apercentage of both operating expenses and revenues net ofprovision for credit losses, (iv) our investment banking
transaction backlog and future results, (v) our expectedinterest income and interest expense, (vi) our expense savingsand strategic locations initiatives, (vii) expenses we may incur,
including future litigation expense and expenses frominvesting in our consumer and transaction banking businesses,(viii) the projected growth of our deposits and other funding,asset liability management and funding strategies and related
interest expense savings, (ix) our business initiatives, includingtransaction banking and new consumer financial products,(x) our planned 2022 benchmark debt issuances, (xi) theamount, composition and location of global core liquid assets(GCLA) we expect to hold, (xii) our credit exposures, (xiii) our
expected provisions for credit losses, (xiv) the adequacy of ourallowance for credit losses, (xv) the projected growth of ourconsumer lending and credit card businesses, (xvi) the
objectives and effectiveness of our Business Continuity
Planning (BCP) strategy, information security program, risk
management and liquidity policies, (xvii) our resolution planand strategy and their implications for stakeholders, (xviii) the
design and effectiveness of our resolution capital and liquidity
models and triggers and alerts framework, (xix) the results ofstress tests, the effect of changes to regulations, and our future
status, activities or reporting under banking and financial
regulation, (xx) our expected tax rate, (xxi) the future state of
our liquidity and regulatory capital ratios, and our prospective
capital distributions (including dividends and repurchases),(xxii) our expected SCB and G-SIB surcharge, (xxiii) legal
proceedings, governmental investigations or othercontingencies, (xxiv) the asset recovery guarantee and our
remediation activities related to our 1Malaysia Development
Berhad (1MDB) settlements, (xxv) the replacement of IBORs
and our transition to alternative risk-free reference rates,(xxvi) the impact of the coronavirus (COVID-19) pandemic
on our business, results, financial position and liquidity,(xxvii) the effectiveness of our management of our humancapital, including our diversity goals, (xxviii) our sustainability
and carbon neutrality targets and goals, (xxix) our plans forour people to return to our offices, (xxx) future inflation and(xxxi) our completed, announced and prospective
acquisitions, including our completed acquisition of theGeneral Motors co-branded credit card portfolio and ourannounced acquisitions of NN Investment Partners andGreenSky, Inc. (GreenSky).

Executive Overview
We generated net earnings of $21.64 billion for 2021,
significantly higher compared with $9.46 billion for 2020.
Diluted earnings per common share (EPS) was $59.45 for
2021, significantly higher compared with $24.74 for 2020.
Return on average common shareholders’ equity (ROE)
was 23.0% for 2021, compared with 11.1% for 2020.
Book value per common share was $284.39 as ofDecember 2021, 20.4% higher compared with
December 2020.
During 2020, we recorded net provisions for litigation andregulatory proceedings of $3.42 billion, which reduced diluted
EPS by $9.51 and reduced ROE by 3.9 percentage points.
Net revenues were $59.34 billion for 2021, 33% higher
than 2020, reflecting higher net revenues across all
segments, including significant increases in AssetManagement, Investment Banking and Consumer &Wealth Management. Net revenues in Asset Management
primarily reflected significantly higher net revenues in
Equity investments and Lending and debt investments, net
revenues in Investment Banking primarily reflectedsignificantly higher net revenues in Financial advisory andUnderwriting, and net revenues in Consumer & WealthManagement reflected growth in both Wealth management
and Consumer banking net revenues. Net revenues in
Global Markets were slightly higher, reflecting significantly
higher net revenues in Equities, partially offset by lower net
revenues in Fixed Income, Currency and Commodities(FICC) compared with a strong prior year.
Provision for credit losses was $357 million for 2021, comparedwith $3.10 billion for 2020. 2021 included provisions related toportfolio growth (primarily in credit cards, including provisions
related to the commitment to acquire the General Motors
co-branded credit card portfolio), largely offset by reserve
reductions on wholesale and consumer loans reflecting
continued improvement in the broader economic environment.
This followed challenging conditions in the prior year as a resultof the impact of the COVID-19 pandemic, which contributed tosignificant provisions in 2020.
Operating expenses were $31.94 billion for 2021, 10% higher
than 2020, primarily reflecting significantly higher
compensation and benefits expenses (reflecting strong
performance). In addition, technology expenses andprofessional fees were significantly higher and transaction based
expenses were higher. These increases were partially offset bysignificantly lower net provisions for litigation and regulatory
proceedings and lower expenses related to consolidated
investments (including impairments). Our efficiency ratio (total
operating expenses divided by total net revenues) for 2021 was
53.8%, compared with 65.0% for 2020. In 2020, net
provisions for litigation and regulatory proceedings increased
our efficiency ratio by 7.6 percentage points.
Goldman Sachs 2021 Form 10-K

59

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
During 2021, we returned $7.49 billion of capital tocommon shareholders, including $5.20 billion of commonshare repurchases and $2.29 billion of common stock
dividends. As of December 2021, our CET1 capital ratio
was 14.2% under the Standardized Capital Rules and14.9% under the Advanced Capital Rules. See Note 20 tothe consolidated financial statements for further
information about our capital ratios.
We announced two strategic acquisitions during 2021, thepending acquisitions of NN Investment Partners in our AssetManagement business and GreenSky in our Consumer
banking business. We expect these acquisitions to accelerate
our strategy to drive more durable returns. The acquisition of
NN Investment Partners is expected to close in the second
quarter of 2022, and the acquisition of GreenSky is expected
to close in the first quarter of 2022.
In the first quarter of 2022, we announced that over the
medium-term (approximately 3 years), our target is toachieve (i) ROE within a range of 14% to 16%, (ii) returnon average tangible common shareholders’ equity (ROTE)
within a range of 15% to 17% and (iii) an efficiency ratioof approximately 60%. In addition, we announced that ourtarget is to maintain capital ratios equal to the regulatory
requirements plus a buffer of 50 to 100 basis points.

Business Environment
In 2021, the global economy continued to recover from theimpact of the COVID-19 pandemic, as the distribution of
vaccines helped facilitate an increase in global economic
activity. Economic activity continued to benefit fromongoing fiscal stimulus from governments and continued
accommodative monetary policy from global central banks.
In the second half of the year, the growth in economic
activity and demand for goods and services, alongsidesupply chain complications, contributed to inflationarypressures. Late in the year, the surge in Omicron cases
sparked renewed concerns globally, contributing toincreased market volatility and increased pressures on labor
supply. This may result in a negative impact on economic
activity.
Despite broad improvements in the overall economy since
the initial impact of the COVID-19 pandemic, uncertainty
remains on the pace of the recovery going forward, reflecting
concerns about virus resurgence from the Omicron variant
and other possible variants and related concerns regarding
vaccine distribution, efficacy and hesitancy, as well as
concerns relating to inflation, supply chain complications
and geopolitical risks. See “Results of Operations — Segment
Assets and Operating Results — Segment Operating Results”
for further information about the operating environment foreach of our business segments.
60

Goldman Sachs 2021 Form 10-K

Critical Accounting Policies
Fair Value
Fair Value Hierarchy. Trading assets and liabilities, certain
investments and loans, and certain other financial assets andliabilities, are included in our consolidated balance sheets atfair value (i.e., marked-to-market), with related gains orlosses generally recognized in our consolidated statements ofearnings. The use of fair value to measure financial
instruments is fundamental to our risk management practices
and is our most critical accounting policy.
The fair value of a financial instrument is the amount thatwould be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at themeasurement date. We measure certain financial assets andliabilities as a portfolio (i.e., based on its net exposure tomarket and/or credit risks). In determining fair value, thehierarchy under U.S. generally accepted accounting principles(U.S. GAAP) gives (i) the highest priority to unadjusted quoted
prices in active markets for identical, unrestricted assets or
liabilities (level 1 inputs), (ii) the next priority to inputs otherthan level 1 inputs that are observable, either directly or
indirectly (level 2 inputs), and (iii) the lowest priority to inputs
that cannot be observed in market activity (level 3 inputs). In
evaluating the significance of a valuation input, we consider,among other factors, a portfolio’s net risk exposure to that
input. Assets and liabilities are classified in their entirety basedon the lowest level of input that is significant to their fair value
measurement.
The fair values for substantially all of our financial assets andliabilities are based on observable prices and inputs and areclassified in levels 1 and 2 of the fair value hierarchy. Certain
level 2 and level 3 financial assets and liabilities may requireappropriate valuation adjustments that a market participant
would require to arrive at fair value for factors, such ascounterparty and our credit quality, funding risk, transfer
restrictions, liquidity and bid/offer spreads.
Instruments classified in level 3 of the fair value hierarchy arethose which require one or more significant inputs that are notobservable. Level 3 financial assets represented 1.6% as ofDecember 2021 and 2.3% as of December 2020, of our total
assets. See Notes 4 through 10 to the consolidated financial
statements for further information about level 3 financial
assets, including changes in level 3 financial assets and related
fair value measurements. Absent evidence to the contrary,
instruments classified in level 3 of the fair value hierarchy are
initially valued at transaction price, which is considered to be
the best initial estimate of fair value. Subsequent to thetransaction date, we use other methodologies to determine fairvalue, which vary based on the type of instrument. Estimating
the fair value of level 3 financial instruments requires
judgments to be made. These judgments include:‰ Determining the appropriate valuation methodology and/or model for each type of level 3 financial instrument;

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Determining model inputs based on an evaluation of all
relevant empirical market data, including prices
evidenced by market transactions, interest rates, credit
spreads, volatilities and correlations; and‰ Calibration to Market Comparables. Market-basedtransactions are used to corroborate the valuation of
positions with similar characteristics, risks andcomponents.

‰ Determining
appropriate
valuation
adjustments,
including those related to illiquidity or counterparty
credit quality.

‰ Relative Value Analyses. Market-based transactions
are analyzed to determine the similarity, measured interms of risk, liquidity and return, of one instrument
relative to another or, for a given instrument, of one
maturity relative to another.

Regardless of the methodology, valuation inputs andassumptions are only changed when corroborated bysubstantive evidence.
Controls Over Valuation of Financial Instruments.
Market makers and investment professionals in ourrevenue-producing units are responsible for pricing ourfinancial instruments. Our control infrastructure isindependent of the revenue-producing units and isfundamental to ensuring that all of our financial
instruments are appropriately valued at market-clearing
levels. In the event that there is a difference of opinion insituations where estimating the fair value of financial
instruments requires judgment (e.g., calibration to market
comparables or trade comparison, as described below), thefinal valuation decision is made by senior managers inindependent risk oversight and control functions. This
independent price verification is critical to ensuring that our
financial instruments are properly valued.
Price Verification. All financial instruments at fair value
classified in levels 1, 2 and 3 of the fair value hierarchy are
subject to our independent price verification process. The
objective of price verification is to have an informed andindependent opinion with regard to the valuation offinancial instruments under review. Instruments that haveone or more significant inputs which cannot be
corroborated by external market data are classified inlevel 3 of the fair value hierarchy. Price verification
strategies utilized by our independent risk oversight andcontrol functions include:‰ Trade Comparison. Analysis of trade data (both internaland external, where available) is used to determine themost relevant pricing inputs and valuations.
‰ External Price Comparison. Valuations and prices arecompared to pricing data obtained from third parties(e.g., brokers or dealers, IHS Markit, Bloomberg, IDC,
TRACE). Data obtained from various sources iscompared to ensure consistency and validity. Whenbroker or dealer quotations or third-party pricing
vendors are used for valuation or price verification,
greater priority is generally given to executablequotations.

‰ Collateral Analyses. Margin calls on derivatives areanalyzed to determine implied values, which are used tocorroborate our valuations.
‰ Execution of Trades. Where appropriate, marketmaking desks are instructed to execute trades in order toprovide evidence of market-clearing levels.
‰ Backtesting. Valuations are corroborated
comparison to values realized upon sales.

by

See Note 4 to the consolidated financial statements forfurther information about fair value measurements.
Review of Net Revenues. Independent risk oversight andcontrol functions ensure adherence to our pricing policy
through a combination of daily procedures, including the
explanation and attribution of net revenues based on theunderlying factors. Through this process, we independently
validate net revenues, identify and resolve potential fairvalue or trade booking issues on a timely basis and seek toensure that risks are being properly categorized andquantified.
Review of Valuation Models. Our independent model
risk management group (Model Risk), consisting ofquantitative professionals who are separate from model
developers, performs an independent model review andvalidation process of our valuation models. New orchanged models are reviewed and approved prior to
implementation. Models are reviewed annually to assess theimpact of any changes in the product or market and any
market developments in pricing theories. See “RiskManagement — Model Risk Management” for further
information about the review and validation of ourvaluation models.

Goldman Sachs 2021 Form 10-K

61

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Allowance for Credit Losses
We estimate and record an allowance for credit losses
related to our loans held for investment that are accounted
for at amortized cost. To determine the allowance for credit
losses, we classify our loans accounted for at amortized cost
into wholesale and consumer portfolios. These portfolios
represent the level at which we have developed anddocumented our methodology to determine the allowancefor credit losses. The allowance for credit losses is measured
on a collective basis for loans that exhibit similar risk
characteristics using a modeled approach and asset-specificbasis for loans that do not share similar risk characteristics.
The allowance for credit losses takes into account theweighted average of a range of forecasts of future economic
conditions over the expected life of the loans and lending
commitments. The expected life of each loan or lending
commitment is determined based on the contractual term
adjusted for extension options or demand features, or ismodeled in the case of revolving credit card loans. The
forecasts include baseline, favorable and adverse economic
scenarios over a three-year period. For loans with expected
lives beyond three years, the model reverts to historical loss
information based on a non-linear modeled approach. We
apply judgment in weighting individual scenarios eachquarter based on a variety of factors, including ourinternally derived economic outlook, market consensus,
recent macroeconomic conditions and industry trends. The
forecasted economic scenarios consider a number of risk
factors relevant to the wholesale and consumer portfolios.
Risk factors for wholesale loans include internal credit
ratings, industry default and loss data, expected life,
macroeconomic indicators (e.g., unemployment rates andGDP), the borrower’s capacity to meet its financial
obligations, the borrower’s country of risk and industry,loan seniority and collateral type. In addition, for loans
backed by real estate, risk factors include loan-to-value
ratio, debt service ratio and home price index. Risk factors
for installment and credit card loans include Fair Isaac
Corporation (FICO) credit scores, delinquency status, loan
vintage and macroeconomic indicators.
The allowance for credit losses also includes qualitative
components which allow management to reflect theuncertain nature of economic forecasting, capture
uncertainty regarding model inputs, and account for model
imprecision and concentration risk.

62

Goldman Sachs 2021 Form 10-K

Our estimate of credit losses entails judgment aboutcollectability at the reporting dates, and there areuncertainties inherent in those judgments. The allowancefor credit losses is subject to a governance process thatinvolves review and approval by senior management within
our independent risk oversight and control functions.
Personnel within our independent risk oversight andcontrol functions are responsible for forecasting the
economic variables that underlie the economic scenariosthat are used in the modeling of expected credit losses.
While we use the best information available to determine
this estimate, future adjustments to the allowance may benecessary based on, among other things, changes in theeconomic environment or variances between actual results
and the original assumptions used. Loans are charged off
against the allowance for loan losses when deemed to beuncollectible.
We also record an allowance for credit losses on lending
commitments which are held for investment that are
accounted for at amortized cost. Such allowance isdetermined using the same methodology as the allowance
for loan losses, while also taking into consideration theprobability of drawdowns or funding, and whether suchcommitments are cancellable by us.
To estimate the potential impact of an adverse
macroeconomic environment on our allowance for credit
losses, we, among other things, compared the expectedcredit losses under the weighted average forecast used in thecalculation of allowance for credit losses as ofDecember 2021 (which was primarily weighted towards thebaseline economic scenario) to the expected credit losses
under a 100% weighted adverse economic scenario. The
adverse macroeconomic model assumes an emergence of
new vaccine-resistant strains of COVID-19 resulting in aresurgence of infections, an economic contraction, highinflation rates in the initial quarters, gradually climbing
unemployment rates, decline in GDP growth rates anddislocations in the economy due to shortages in the supplyof some goods and services. A 100% weighting to theadverse economic scenario would have resulted in an
approximate $1.3 billion increase in our allowance for
credit losses as of December 2021. This hypotheticalincrease does not take into consideration any potential
adjustments to qualitative reserves. The forecasts ofmacroeconomic conditions are inherently uncertain and do
not take into account any other offsetting or correlated
effects. The actual credit loss in an adverse macroeconomic
environment may differ significantly from this estimate. See
Note 9 to the consolidated financial statements for further
information about the allowance for credit losses.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Use of Estimates
U.S. GAAP requires us to make certain estimates andassumptions. In addition to the estimates we make inconnection with fair value measurements and the allowancefor credit losses on loans and lending commitments held forinvestment and accounted for at amortized cost, the use of
estimates and assumptions is also important in determining
the accounting for goodwill and identifiable intangible
assets, provisions for losses that may arise from litigation
and regulatory proceedings (including governmental
investigations), and accounting for income taxes.
Goodwill is assessed for impairment annually in the fourth
quarter or more frequently if events occur or circumstanceschange that indicate an impairment may exist. Whenassessing goodwill for impairment, first, a qualitative
assessment can be made to determine whether it is more
likely than not that the estimated fair value of a reporting
unit is less than its estimated carrying value. If the results of
the qualitative assessment are not conclusive, a quantitative
goodwill test is performed. Alternatively, a quantitative
goodwill test can be performed without performing aqualitative assessment. Estimating the fair value of ourreporting units requires judgment. Critical inputs to the fairvalue estimates include projected earnings and allocatedequity. There is inherent uncertainty in the projected
earnings. The estimated carrying value of each reporting
unit reflects an allocation of total shareholders’ equity andrepresents the estimated amount of total shareholders’equity required to support the activities of the reporting
unit under currently applicable regulatory capitalrequirements. See Note 12 to the consolidated financial
statements for further information about goodwill. If weexperience a prolonged or severe period of weakness in thebusiness environment, financial markets, our performanceor our common stock price, or additional increases incapital requirements, our goodwill could be impaired in the
future.
Identifiable intangible assets are tested for impairment
when events or changes in circumstances suggest that an
asset’s or asset group’s carrying value may not be fully
recoverable. Judgment is required to evaluate whether
indications of potential impairment have occurred, and totest intangible assets for impairment, if required. An
impairment is recognized if the estimated undiscounted
cash flows relating to the asset or asset group is less than thecorresponding carrying value. See Note 12 to theconsolidated financial statements for further information
about identifiable intangible assets.

We also estimate and provide for potential losses that may
arise out of litigation and regulatory proceedings to theextent that such losses are probable and can be reasonably
estimated. In addition, we estimate the upper end of therange of reasonably possible aggregate loss in excess of therelated reserves for litigation and regulatory proceedings
where we believe the risk of loss is more than slight. See
Notes 18 and 27 to the consolidated financial statements
for information about certain judicial, litigation andregulatory proceedings. Significant judgment is required in
making these estimates and our final liabilities may
ultimately be materially different. Our total estimatedliability in respect of litigation and regulatory proceedings isdetermined on a case-by-case basis and represents anestimate of probable losses after considering, among otherfactors, the progress of each case, proceeding orinvestigation, our experience and the experience of othersin similar cases, proceedings or investigations, and theopinions and views of legal counsel.
In accounting for income taxes, we recognize tax positionsin the financial statements only when it is more likely than
not that the position will be sustained on examination by
the relevant taxing authority based on the technical meritsof the position. As of December 2021, our net liability forunrecognized tax benefits was $1.16 billion. We use
estimates to recognize current and deferred income taxes in
the U.S. federal, state and local and non-U.S. jurisdictions inwhich we operate. The income tax laws in thesejurisdictions are complex and can be subject to different
interpretations between taxpayers and taxing authorities.
Disputes may arise over these interpretations and can be
settled by audit, administrative appeals or judicial
proceedings. Our interpretations are reevaluated quarterly
based on guidance currently available, tax examination
experience and the opinions of legal counsel, among otherfactors. We recognize deferred taxes based on the amountthat will more likely than not be realized in the future basedon enacted income tax laws. As of December 2021, we had$6.32 billion of deferred tax assets with a related valuation
allowance of $895 million. Our estimate for deferred taxes
includes estimates for future taxable earnings, including thelevel and character of those earnings, and various tax
planning strategies. See Note 24 to the consolidated
financial statements for further information about income
taxes.

Recent Accounting Developments
See Note 3 to the consolidated financial statements for
information about Recent Accounting Developments.

Goldman Sachs 2021 Form 10-K

63

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Results of Operations
The composition of our net revenues has varied over time asfinancial markets and the scope of our operations havechanged. The composition of net revenues can also varyover the shorter term due to fluctuations in U.S. and global
economic and market conditions. See “Risk Factors” inPart I, Item 1A of this Form 10-K for further information
about the impact of economic and market conditions on
our results of operations. For a discussion of our 2020
financial results compared with 2019, see Part II, Item 7“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our Annual
Report on Form 10-K for the year ended
December 31, 2020.
Financial Overview
The table below presents an overview of our financial
results and selected financial ratios.
Year Ended December$ in millions, except per share amounts

Net revenues
Pre-tax earnings
Net earnings
Net earnings to common
Diluted EPS
ROE
ROTE
Net earnings to average assets
Return on average shareholders’ equity
Average equity to average assets
Dividend payout ratio

2021

2020

2019

$59,339$27,044$21,635$21,151$ 59.45
23.0%
24.3%
1.6%
21.3%
7.4%
10.9%

$44,560$12,479$ 9,459$ 8,915$ 24.74
11.1%
11.8%
0.8%
10.3%
8.2%
20.2%

$36,546$10,583$ 8,466$ 7,897$ 21.03
10.0%
10.6%
0.9%
9.4%
9.3%
19.7%

In the table above:‰ Net earnings to common represents net earnings
applicable to common shareholders, which is calculated
as net earnings less preferred stock dividends.
‰ Average equity to average assets is calculated by dividing
average total shareholders’ equity by average total assets.
‰ Dividend payout ratio is calculated by dividing dividends
declared per common share by diluted EPS.
‰ ROE is calculated by dividing net earnings to common by
average monthly common shareholders’ equity. Tangible
common shareholders’ equity is calculated as total
shareholders’ equity less preferred stock, goodwill andidentifiable intangible assets. ROTE is calculated by dividing
net earnings to common by average monthly tangible
common shareholders’ equity. We believe that tangible
common shareholders’ equity is meaningful because it is ameasure that we and investors use to assess capital adequacy
and that ROTE is meaningful because it measures theperformance of businesses consistently, whether they wereacquired or developed internally. Tangible commonshareholders’ equity and ROTE are non-GAAP measuresand may not be comparable to similar non-GAAP measuresused by other companies. Return on average shareholders’equity is calculated by dividing net earnings by averagemonthly shareholders’ equity.
64

Goldman Sachs 2021 Form 10-K

The table below presents our average equity and thereconciliation of average common shareholders’ equity toaverage tangible common shareholders’ equity.
Average for the Year Ended December$ in millions

2021

2020

2019

Total shareholders’ equity$101,705 $ 91,779 $ 90,297
Preferred stock(9,876) (11,203) (11,203)
Common shareholders’ equity
91,82980,576
79,094
Goodwill(4,327)(4,238)(3,965)
Identifiable intangible assets
(536)
(617)
(499)
Tangible common shareholders’ equity $ 86,966 $ 75,721 $ 74,630

Net Revenues
The table below presents our net revenues by line item.
Year Ended December$ in millions

Investment banking
Investment management
Commissions and fees
Market making
Other principal transactions
Total non-interest revenues
Interest income
Interest expense
Net interest income
Total net revenues

2021

2020

2019

$14,168
8,059
3,619
15,352
11,671
52,86912,1205,650
6,470$59,339$ 9,141
6,923
3,548
15,546
4,651
39,80913,6898,938
4,751$44,560$ 6,7986,189
2,988
10,157
6,052
32,184
21,73817,376
4,362$36,546

In the table above:‰ Investment banking consists of revenues (excluding net
interest) from financial advisory and underwriting
assignments. These activities are included in our
Investment Banking segment.
‰ Investment management consists of revenues (excluding
net interest) from providing asset management services
across all major asset classes to a diverse set of asset
management clients (included in our Asset Management
segment), as well as asset management services, wealthadvisory services and certain transaction services for
wealth management clients (included in our Consumer &Wealth Management segment).
‰ Commissions and fees consists of revenues fromexecuting and clearing client transactions on major stock,
options and futures exchanges worldwide, as well as
over-the-counter (OTC) transactions. These activities areincluded in our Global Markets and Consumer & WealthManagement segments.
‰ Market making consists of revenues (excluding net interest)
from client execution activities related to making markets ininterest rate products, credit products, mortgages,
currencies, commodities and equity products. These
activities are included in our Global Markets segment.
‰ Other principal transactions consists of revenues(excluding net interest) from our equity investing activities,
including revenues related to our consolidated investments(included in our Asset Management segment), and lending
activities (included across our four segments).

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating Environment. During 2021, a general recoveryof the global economy, continued monetary and fiscal
support from central banks and governments andaccelerating vaccine distribution provided a favorable
market backdrop. These factors contributed to generally
higher global equity prices and tighter credit spreads
compared with the end of 2020. In addition, marketmaking activities reflected strong client activity levels,
although activity declined from a very strong prior year
which reflected heightened volatility and significant market
dislocations as a result of the COVID-19 pandemic, andinvestment banking activity levels across mergers andacquisitions and underwriting were elevated.
If concerns about the economic outlook, including those on
inflation and supply chain issues, grow or the ongoing
efforts to mitigate the impact of the COVID-19 pandemic
are ineffective (including due to new variants orcomplications with vaccine distribution, efficacy andhesitancy), it may lead to a decline in global equity markets,a decline in investment banking activity levels, and acontinued decline in market-making activity levels, and net
revenues and the provision for credit losses would likely be
negatively impacted. See “Segment Assets and Operating
Results — Segment Operating Results” for information
about the operating environment and material trends anduncertainties that may impact our results of operations.
2021 versus 2020. Net revenues in the consolidated
statements of earnings were $59.34 billion for 2021, 33%
higher than 2020, reflecting significantly higher otherprincipal transactions revenues, investment banking
revenues and net interest income, and higher investment
management revenues.

Non-Interest Revenues. Investment banking revenues in
the consolidated statements of earnings were $14.17 billion
for 2021, 55% higher than 2020, due to significantly higher
revenues in financial advisory, reflecting a significant
increase in completed mergers and acquisitions volumes, inequity underwriting, primarily driven by strong industrywide initial public offerings activity, and in debt
underwriting, primarily reflecting elevated industry-wide
leveraged finance activity.
Investment management revenues in the consolidated
statements of earnings were $8.06 billion for 2021, 16%higher than 2020, primarily due to higher management andother fees, reflecting the impact of higher average AUS,
partially offset by higher fee waivers on money market
funds. In addition, incentive fees were significantly higher,
primarily driven by harvesting.
Commissions and fees in the consolidated statements ofearnings were $3.62 billion for 2021, slightly higher than2020.
Market making revenues in the consolidated statements ofearnings were $15.35 billion for 2021, essentiallyunchanged compared with 2020, as significantly lower
revenues in interest rate products and credit products werelargely offset by significantly higher revenues in equity
products (primarily in derivatives) and commodities, andimproved results in mortgages.
Other principal transactions revenues in the consolidated
statements of earnings were $11.67 billion for 2021,
compared with $4.65 billion for 2020, primarily reflecting
significantly higher net gains from investments in private
equities and in debt instruments, partially offset by net
losses from investments in public equities compared withsignificant net gains in 2020.
Net Interest Income. Net interest income in the
consolidated statements of earnings was $6.47 billion for
2021, 36% higher than 2020, reflecting a decrease ininterest expense, partially offset by a decrease in interest
income. The decrease in interest expense is primarily related
to other interest-bearing liabilities, deposits and long-termborrowings, each reflecting the impact of lower interest
rates. The decrease in interest income primarily related tocollateralized agreements and trading assets, both reflecting
the impact of lower interest rates, partially offset by the
impact of higher average balances for loans. See“Supplemental Financial Information — Statistical
Disclosures — Distribution of Assets, Liabilities andShareholders’ Equity” for further information about oursources of net interest income.

Goldman Sachs 2021 Form 10-K

65

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Provision for Credit Losses
Provision for credit losses consists of provision for credit
losses on loans and lending commitments held forinvestment and accounted for at amortized cost. See Note 9
to the consolidated financial statements for further
information about the provision for credit losses.
The table below presents our provision for credit losses.
Year Ended December$ in millions

2021

2020

2019

Provision for credit losses$357$3,098$1,0652021 versus 2020. Provision for credit losses in the
consolidated statements of earnings was $357 million for
2021, compared with $3.10 billion for 2020. 2021 included
provisions related to portfolio growth (primarily in credit
cards, including approximately $185 million of provisions
related to the commitment to acquire the General Motors
co-branded credit card portfolio), largely offset by reserve
reductions on wholesale and consumer loans reflecting
continued improvement in the broader economic
environment. This followed challenging conditions in theprior year as a result of the COVID-19 pandemic, which
contributed to significant provisions in 2020.
Operating Expenses
Our operating expenses are primarily influenced bycompensation, headcount and levels of business activity.
Compensation and benefits includes salaries, year-end
discretionary compensation, amortization of equity awards
and other items such as benefits. Discretionary
compensation is significantly impacted by, among otherfactors, the level of net revenues net of provision for credit
losses, overall financial performance, prevailing labormarkets, business mix, the structure of our share-based
compensation programs and the external environment.
The table below presents our operating expenses by line
item and headcount.
Year Ended December$ in millions

2021

2020

2019

Compensation and benefits
Transaction based
Market development
Communications and technology
Depreciation and amortization
Occupancy
Professional fees
Other expenses
Total operating expenses$17,719
4,710
553
1,573
2,015
981
1,648
2,739
$31,938$13,309
4,141
401
1,347
1,902
960
1,306
5,617
$28,983$12,353
3,513
739
1,167
1,704
1,029
1,316
3,077
$24,898

Headcount at period-end

43,90040,50038,3002021 versus 2020. Operating expenses in the consolidated
statements of earnings were $31.94 billion for 2021, 10%higher than 2020. Our efficiency ratio for 2021 was 53.8%,
compared with 65.0% for 2020. In 2020, net provisions forlitigation and regulatory proceedings increased our
efficiency ratio by 7.6 percentage points.
66

Goldman Sachs 2021 Form 10-K

The increase in operating expenses compared with 2020
primarily reflected significantly higher compensation andbenefits expenses (reflecting strong performance). In
addition, technology expenses and professional fees weresignificantly higher and transaction based expenses werehigher. These increases were partially offset by significantly
lower net provisions for litigation and regulatory
proceedings and lower expenses related to consolidated
investments (including impairments).
Net provisions for litigation and regulatory proceedings for2021 were $534 million compared with $3.42 billion for
2020.
Charitable contributions to Goldman Sachs Gives wereapproximately $250 million for 2021.
As of December 2021, headcount increased 8% comparedwith December 2020, reflecting investments in new
business initiatives and an increase in technology
professionals.
Provision for Taxes
The effective income tax rate for 2021 was 20.0%, downfrom the full year income tax rate of 24.2% for 2020,
primarily due to a decrease in provisions for non-deductible
litigation, partially offset by a decrease in the impact of tax
benefits in 2021 compared with 2020.
In March 2021, the American Rescue Plan Act of 2021
(Rescue Plan) was signed into law. The Rescue Plan is a
$1.9 trillion stimulus package enacted to help address the
economic and health impacts of the COVID-19 pandemic.
The Rescue Plan includes a repeal of a provision underwhich U.S. affiliated groups could elect a worldwide
allocation of interest expense for foreign tax credit
limitation purposes for one year beginning in January 2021.
Additionally, beginning in 2027, the limitation on
corporate tax deductions for compensation payable to theCEO, CFO and the top three highest paid employees will be
expanded to include the next five highest paid employees.
The legislation did not have a material impact on our 2021
annual effective tax rate and is not expected to have amaterial impact on our 2022 annual effective tax rate.
In April 2021, the New York State (NYS) FY 2022 budget
was enacted. The legislation temporarily increased the NYS
corporate income tax rate from 6.5% to 7.25% forcalendar years 2021 through 2023. The legislation did nothave a material impact on our 2021 annual effective tax
rate and is not expected to have a material impact on our2022 annual effective tax rate.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The U.K. Finance Act 2021 was enacted in June 2021 andincludes a six percent increase in the corporate income tax
rate effective from April 2023. During 2021, U.K. deferred
tax assets and liabilities were remeasured and a deferred tax
benefit of approximately $100 million was recognized. The
Finance (No. 2) Bill 2021-22, issued in November 2021,
includes a five percent reduction in the U.K. bank surcharge
tax rate, effective from April 2023. The bank surcharge iscurrently applicable to certain of our U.K. subsidiaries andbranches, including Goldman Sachs International (GSI) andGoldman Sachs International Bank (GSIB). Following
Royal Assent, the associated impact of any change to thebank surcharge on U.K. deferred tax assets and liabilities
could have a material impact on our effective tax rate,depending on the operating results for the quarter during
which this legislation is enacted.
We expect our tax rate for 2022 to be between 20% and21%, excluding the impact of income tax benefits on
employee share-based awards and any potential changes incurrent income tax rates.
Segment Assets and Operating Results
Segment Assets. The table below presents assets bysegment.
As of December$ in millions

Investment Banking
Global Markets
Asset Management
Consumer & Wealth Management
Total

2021

2020

$ 144,157
1,082,378
91,115
146,338$1,463,988$ 116,242
844,606
95,751
106,429$1,163,028

The allocation process for segment assets is based on theactivities of these segments. The allocation of assets
includes allocation of GCLA (which consists of
unencumbered, highly liquid securities and cash), which is
generally included within cash and cash equivalents,
collateralized agreements and trading assets on our balance
sheet. Due to the integrated nature of these segments,
estimates and judgments are made in allocating these assets.
See “Risk Management — Liquidity Risk Management”
for further information about our GCLA.

Segment Operating Results. The table below presents
our segment operating results.
Year Ended December$ in millions

2021

2020

2019

Investment Banking
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity$14,876(298)
6,705$ 8,469$ 6,705$10,34164.8%$ 9,423
1,624
6,134$ 1,665$ 1,193$11,313
10.5%$ 7,599
333
4,685$ 2,581$ 1,996$11,167
17.9%

Global Markets
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity$22,077
45
12,969$ 9,063$ 6,973$45,497
15.3%$21,157274
12,806$ 8,077$ 5,766$40,760
14.1%$14,779
35
10,851$ 3,893$ 2,729$40,060
6.8%

Asset Management
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity$14,91618
5,970$ 8,928$ 7,046$25,195
28.0%$ 7,984442
5,142$ 2,400$ 1,740$20,491
8.5%$ 8,965274
4,817$ 3,874$ 3,013$21,575
14.0%

Consumer & Wealth Management
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity$ 7,470
592
6,294
$ 584
$ 427
$10,796
4.0%$ 5,996
758
4,901
$ 337
$ 216
$ 8,012
2.7%$ 5,203
423
4,545
$ 235
$ 159
$ 6,292
2.5%

Total net revenues
Total provision for credit losses
Total operating expenses
Total pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity$59,339357
31,938$27,044$21,151$91,82923.0%$44,560
3,098
28,983$12,479$ 8,915$80,57611.1%$36,546
1,065
24,898$10,583$ 7,897$79,094
10.0%

Net revenues in our segments include allocations of interest
income and expense to specific positions in relation to the
cash generated by, or funding requirements of, such
positions. See Note 25 to the consolidated financial
statements for further information about our businesssegments.
The allocation of common shareholders’ equity andpreferred stock dividends to each segment is based on theestimated amount of equity required to support theactivities of the segment under relevant regulatory capitalrequirements. Net earnings for each segment is calculated
by applying the firmwide tax rate to each segment’s pre-tax
earnings.

Goldman Sachs 2021 Form 10-K

67

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Effective January 1, 2021, the attributed equity among oursegments was updated to reflect the results of our 2020
Comprehensive Capital Analysis and Review (CCAR)
process. See “Capital Management and Regulatory
Capital — Capital Management” for information about the
impact of these updates on the allocation of attributed
equity among our segments as of the beginning of the firstquarter of 2021. The average common equity balances
above incorporate such impact, as well as the changes in thesize and composition of assets held in each of our segmentsthat occurred during 2021. See “Capital Management andRegulatory Capital — Capital Management” for
information about our 2021 CCAR process and our
updated SCB, which became effective on October 1, 2021.
Compensation and benefits expenses within our segments
reflect, among other factors, our overall performance, as
well as the performance of individual businesses.
Consequently, pre-tax margins in one segment of ourbusiness may be significantly affected by the performanceof our other business segments. A description of segment
operating results follows.
Investment Banking
Investment Banking generates revenues from the following:‰ Financial advisory. Includes strategic advisory
assignments with respect to mergers and acquisitions,divestitures, corporate defense activities, restructuringsand spin-offs.
‰ Underwriting. Includes public offerings and private
placements, including local and cross-border transactions
and acquisition financing, of a wide range of securities
and other financial instruments, including loans.
‰ Corporate lending. Includes lending to corporateclients, including through relationship lending, middlemarket lending and acquisition financing. We also
provide transaction banking services to certain of ourcorporate clients.

The table below presents our Investment Banking assets.
As of December$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

2021

2020

$ 64,437
21,354
5,248
20,3381,053
29,555
2,172$144,157$ 34,730
20,242
2,465
29,493
1,078
26,544
1,690$116,242

The table below presents our Investment Banking operating
results.
Year Ended December$ in millions

2021

2020

2019

Financial advisory
Equity underwriting
Debt underwriting
Underwriting
Corporate lending
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common$ 5,653
5,011
3,504
8,515
708
14,876
(298)
6,705
8,469
1,694
6,775
70
$ 6,705$ 3,065
3,406
2,670
6,076
282
9,423
1,624
6,134
1,665
403
1,262
69
$ 1,193$ 3,197
1,482
2,119
3,601
801
7,599
333
4,685
2,581
516
2,065
69
$ 1,996

Average common equity
Return on average common equity$10,34164.8%$11,313
10.5%$11,167
17.9%

The table below presents our financial advisory andunderwriting transaction volumes.
Year Ended December$ in billions

Announced mergers and acquisitions
Completed mergers and acquisitions
Equity and equity-related offerings
Debt offerings

2021

2020

2019

$ 1,851$ 1,581
$ 141
$ 332

$ 948
$ 1,033
$ 115
$ 352

$ 1,350$ 1,270$
67$ 246

In the table above:‰ Volumes are per Dealogic.
‰ Announced and completed mergers and acquisitions
volumes are based on full credit to each of the advisors ina transaction. Equity and equity-related offerings anddebt offerings are based on full credit for single book
managers and equal credit for joint book managers.
Transaction volumes may not be indicative of net
revenues in a given period. In addition, transaction
volumes for prior periods may vary from amounts
previously reported due to the subsequent withdrawal ora change in the value of a transaction.
‰ Equity and equity-related offerings includes Rule 144A
and public common stock offerings, convertible offerings
and rights offerings.
‰ Debt offerings includes non-convertible preferred stock,mortgage-backed securities, asset-backed securities andtaxable municipal debt. Includes publicly registered andRule 144A issues and excludes leveraged loans.

68

Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operating Environment. During 2021, Investment
Banking operated in an environment characterized bystrong industry-wide activity. In mergers and acquisitions,industry-wide completed and announced volumes were athigh levels, reflecting supportive market conditions andstrong CEO confidence. In underwriting, industry-wide
activity levels reflected continued strength in equity
underwriting volumes, including strong initial public
offerings activity, and solid debt underwriting volumes,
including elevated leveraged finance activity.
In the future, if market and economic conditions
deteriorate, and industry-wide mergers and acquisitions
volumes decline, or if industry-wide equity and debt
underwriting volumes decline, or credit spreads related tohedges on our relationship lending portfolio tighten further,
net revenues in Investment Banking would likely be
negatively impacted. In addition, a deterioration in thecreditworthiness of borrowers would negatively impact theprovision for credit losses.
2021 versus 2020. Net revenues in Investment Banking
were $14.88 billion for 2021, 58% higher than 2020,
primarily reflecting significantly higher net revenues in
Financial advisory and Underwriting.
The increase in Financial advisory net revenues reflected asignificant increase in completed mergers and acquisitions
volumes. The increase in Underwriting net revenues wasdue to significantly higher net revenues in both Equity
underwriting, primarily driven by strong industry-wide
initial public offerings activity, and Debt underwriting,primarily reflecting elevated industry-wide leveraged
finance activity. Corporate lending net revenues weresignificantly higher, primarily reflecting net gains fromlending activities compared with net losses in the prior year,
and significantly higher net interest income.
Provision for credit losses was a net benefit of $298 million
for 2021, compared with net provisions of $1.62 billion for
2020, primarily due to reserve reductions in the current
year reflecting continued improvement in the broader
economic environment following challenging conditions in2020 resulting from the COVID-19 pandemic.
Operating expenses were $6.71 billion for 2021, 9% higher
than 2020, due to significantly higher compensation andbenefits expenses (reflecting strong performance), partially
offset by significantly lower net provisions for litigation andregulatory proceedings. Pre-tax earnings were $8.47 billion
for 2021, compared with $1.67 billion for 2020. ROE was
64.8% for 2021, compared with 10.5% for 2020 (which
included the impact of net provisions for litigation andregulatory proceedings that reduced ROE by 11.5
percentage points).

As of December 2021, our investment banking transaction
backlogincreasedsignificantly
comparedwith
December 2020, due to significantly higher estimated net
revenues from potential financial advisory transactions andpotential debt underwriting transactions (particularly fromleveraged finance transactions), and higher estimated net
revenues from potential equity underwriting transactions.
Our backlog represents an estimate of our net revenues
from future transactions where we believe that future
revenue realization is more likely than not. We believe
changes in our backlog may be a useful indicator of client
activity levels which, over the long term, impact our net
revenues. However, the time frame for completion andcorresponding revenue recognition of transactions in our
backlog varies based on the nature of the assignment, as
certain transactions may remain in our backlog for longer
periods of time. In addition, our backlog is subject tocertain limitations, such as assumptions about thelikelihood that individual client transactions will occur inthe future. Transactions may be cancelled or modified, andtransactions not included in the estimate may also occur.
Global Markets
Our Global Markets segment consists of:
FICC. FICC generates revenues from intermediation andfinancing activities.
‰ FICC intermediation. Includes client execution activities
related to making markets in both cash and derivative
instruments, as detailed below.
Interest Rate Products. Government bonds (including
inflation-linked securities) across maturities, othergovernment-backed securities, and interest rate swaps,
options and other derivatives.
Credit Products. Investment-grade and high-yieldcorporate securities, credit derivatives, exchange-tradedfunds (ETFs), bank and bridge loans, municipal
securities, emerging market and distressed debt, and tradeclaims.
Mortgages. Commercial mortgage-related securities,
loans and derivatives, residential mortgage-related
securities, loans and derivatives (including U.S.
government agency-issued collateralized mortgage
obligations and other securities and loans), and otherasset-backed securities, loans and derivatives.
Currencies. Currency options, spot/forwards and otherderivatives on G-10 currencies and emerging-market
products.

Goldman Sachs 2021 Form 10-K

69

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Commodities. Commodity derivatives and, to a lesser
extent, physical commodities, involving crude oil andpetroleum products, natural gas, agricultural, base,precious and other metals, electricity, including
renewable power, environmental products and othercommodity products.
For further information about market-making activities,
see “Market-Making Activities” below.
‰ FICC financing. Includes providing financing to ourclients through warehouse loans backed by mortgages(including residential and commercial mortgage loans),
corporate loans and consumer loans (including auto loans
and private student loans). We also provide financing toclients through structured credit, asset-backed lending,and through securities purchased under agreements toresell (resale agreements).
Equities. Equities generates revenues from intermediationand financing activities.
‰ Equities intermediation. We make markets in equity
securities and equity-related products, including ETFs,
convertible securities, options, futures and OTC
derivative instruments. We also structure and makemarkets in derivatives on indices, industry sectors,
financial measures and individual company stocks. Our
exchange-based market-making activities include making
markets in stocks and ETFs, futures and options on major
exchanges worldwide. In addition, we generatecommissions and fees from executing and clearing
institutional client transactions on major stock, options
and futures exchanges worldwide, as well as OTC
transactions. For further information about marketmaking activities, see “Market-Making Activities” below.
‰ Equities financing. Includes prime brokerage and other
equities financing activities, including securities lending,margin lending and swaps. We earn fees by providing
clearing, settlement and custody services globally. We
provide services that principally involve borrowing andlending securities to cover institutional clients’ short sales
and borrowing securities to cover our short sales and to
make deliveries into the market. In addition, we are an
active participant in broker-to-broker securities lending
and third-party agency lending activities. We provide
financing to our clients for their securities trading
activities through margin loans that are collateralized by
securities, cash or other acceptable collateral. In addition,
we execute swap transactions to provide our clients with
exposure to securities and indices.

70

Goldman Sachs 2021 Form 10-K

Market-Making Activities
As a market maker, we facilitate transactions in both liquidand less liquid markets, primarily for institutional clients,
such as corporations, financial institutions, investment
funds and governments, to assist clients in meeting theirinvestment objectives and in managing their risks. In thisrole, we seek to earn the difference between the price atwhich a market participant is willing to sell an instrument
to us and the price at which another market participant iswilling to buy it from us, and vice versa (i.e., bid/offer
spread). In addition, we maintain (i) market-making
positions, typically for a short period of time, in response
to, or in anticipation of, client demand, and (ii) positions toactively manage our risk exposures that arise from thesemarket-making activities (collectively, inventory). Ourinventory is recorded in trading assets (long positions) ortrading liabilities (short positions) in our consolidatedbalance sheets.
Our results are influenced by a combination ofinterconnected drivers, including (i) client activity levels andtransactional bid/offer spreads (collectively, client activity),and (ii) changes in the fair value of our inventory andinterest income and interest expense related to the holding,hedging and funding of our inventory (collectively, marketmaking inventory changes). Due to the integrated nature of
our market-making activities, disaggregation of net
revenues into client activity and market-making inventorychanges is judgmental and has inherent complexities andlimitations.
The amount and composition of our net revenues vary overtime as these drivers are impacted by multiple interrelated
factors affecting economic and market conditions,
including volatility and liquidity in the market, changes ininterest rates, currency exchange rates, credit spreads,
equity prices and commodity prices, investor confidence,and other macroeconomic concerns and uncertainties.
In general, assuming all other market-making conditions
remain constant, increases in client activity levels or bid/offer spreads tend to result in increases in net revenues, anddecreases tend to have the opposite effect. However,changes in market-making conditions can materially impact
client activity levels and bid/offer spreads, as well as the fairvalue of our inventory. For example, a decrease in liquidity
in the market could have the impact of (i) increasing our
bid/offer spread, (ii) decreasing investor confidence andthereby decreasing client activity levels, and (iii) wideningof credit spreads on our inventory positions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents our Global Markets assets.
As of December$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

2021

2020

$ 131,390
343,535
142,547
337,040
55,28560,916
11,665$1,082,378$ 86,663
212,711
110,473
339,349
52,92933,214
9,267$844,606

The table below presents our Global Markets operating results.
Year Ended December$ in millions

2021

2020

2019

FICC intermediation
FICC financing
FICC
Equities intermediation
Equities financing
Equities
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common$ 8,647
1,937
10,584
7,574
3,919
11,49322,07745
12,969
9,063
1,813
7,250
277
$ 6,973$ 9,991
1,593
11,584
6,989
2,584
9,573
21,157274
12,806
8,077
1,955
6,122
356
$ 5,766$ 6,009
1,379
7,388
4,374
3,017
7,391
14,77935
10,851
3,893
779
3,114
385
$ 2,729

Average common equity
Return on average common equity$45,497
15.3%$40,760
14.1%$40,060
6.8%

The table below presents our Global Markets net revenues
by line item in the consolidated statements of earnings.
FICC

Equities

GlobalMarkets

Year Ended December 2021
Market making
Commissions and fees
Other principal transactions
Net interest income
Total$ 7,584–358
2,642$10,584$ 7,768
3,543
56
126
$11,493$15,352
3,543
414
2,768
$22,077

Year Ended December 2020
Market making
Commissions and fees
Other principal transactions
Net interest income
Total$ 8,972–53
2,559$11,584$ 6,574
3,347
(18)
(330)
$ 9,573$15,546
3,347
35
2,229
$21,157

Year Ended December 2019Market making
Commissions and fees
Other principal transactions
Net interest income
Total$ 5,813–1
1,574$ 7,388$ 4,3442,900
5196$ 7,391$10,157
2,900
52
1,670
$14,779$ in millions

In the table above:‰ The difference between commissions and fees and thosein the consolidated statements of earnings represents
commissions and fees included in our Consumer &Wealth Management segment.
‰ See “Net Revenues” for information about market making
revenues, commissions and fees, other principal transactions
revenues and net interest income. See Note 25 to the consolidated
financialstatementsfornetinterestincomebysegment.
‰ The primary driver of net revenues
intermediation was client activity.

for

Operating Environment. During 2021, Global Markets
operated in an environment characterized by continued
economic recovery and continued monetary and fiscal
support from central banks and governments, which
contributed to strong client activity levels, although activity
declined from a very strong prior year which reflectedheightened volatility and significant market dislocations as
a result of the COVID-19 pandemic. In addition, global
equity prices were generally higher compared with the endof 2020, as the S&P 500 Index increased by 27% and the
MSCI World Index increased by 17%. Market volatility
continued to moderate from elevated levels last year, as theaverage daily VIX was 33% lower than 2020. If
macroeconomic conditions lead to a continued decline inactivity levels or continued decline in volatility, net revenues
in Global Markets would likely be negatively impacted.
2021 versus 2020. Net revenues in Global Markets were$22.08 billion for 2021, 4% higher than 2020.
Net revenues in FICC were $10.58 billion, 9% lower than
2020, due to lower net revenues in FICC intermediation,reflecting significantly lower net revenues in interest rate
products and credit products and slightly lower net
revenues in currencies, partially offset by significantly
higher net revenues in mortgages and higher net revenues incommodities. Net revenues in FICC financing weresignificantly higher, reflecting significantly higher net
revenues from mortgage lending, partially offset bysignificantly lower net revenues from resale agreements.
The decrease in FICC intermediation net revenues reflected
strong but significantly lower client activity compared withvery strong activity levels in the prior year due to highvolatility amid the COVID-19 pandemic. This was partially
offset by the impact of improved market-making conditions
on our inventory compared with challenging conditions in
the prior year. The following provides information about
our FICC intermediation net revenues by business,compared with 2020 results:‰ Net revenues in interest rate products primarily reflected
lower client activity.
‰ Net revenues in credit products and currencies reflected
lower client activity, partially offset by the impact ofimproved market-making conditions on our inventory.
‰ Net revenues in mortgages reflected the impact ofimproved market-making conditions on our inventory.
‰ Net revenues in commodities primarily reflected higher
client activity.

FICC
Goldman Sachs 2021 Form 10-K

71

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Net revenues in Equities were $11.49 billion, 20% higher
than 2020, due to significantly higher net revenues in
Equities financing, primarily reflecting increased activity(including higher average client balances), and higher net
revenues in Equities intermediation, across both derivatives
and cash products.
Provision for credit losses was $45 million for 2021,
compared with $274 million for 2020, primarily reflecting
reserve reductions in the current year due to continued
improvement in the broader economic environment
following challenging conditions in 2020 resulting from the
COVID-19 pandemic, partially offset by portfolio growth.
Operating expenses were $12.97 billion for 2021,
essentially unchanged compared with 2020, as higher
compensation and benefits expenses (reflecting strong
performance) and higher transaction based expenses wereoffset by significantly lower net provisions for litigation andregulatory
proceedings.
Pre-tax
earnings
were$9.06 billion, 12% higher than 2020. ROE was 15.3% for
2021, compared with 14.1% for 2020 (which included theimpact of net provisions for litigation and regulatory
proceedings that reduced ROE by 4.0 percentage points).
Asset Management
We manage client assets across a broad range of investment
strategies and asset classes for a diverse set of institutional
clients and a network of third-party distributors around theworld, including equity, fixed income and alternative
investments. We provide investment solutions including
those managed on a fiduciary basis by our portfolio
managers, as well as those managed by third-party
managers. We offer our investment solutions in a variety ofstructures, including separately managed accounts, mutual
funds, private partnerships and other commingled vehicles.
These solutions begin with identifying clients’ objectives
and continue through portfolio construction, ongoing asset
allocation and risk management and investment realization.
In addition to managing client assets, we invest inalternative investments across a range of asset classes that
seek to deliver long-term accretive risk-adjusted returns.
Our investing activities, which are typically longer term,
include investments in corporate equity, credit, real estateand infrastructure assets.
Asset Management generates revenues from the following:‰ Management and other fees. The majority of revenues
in management and other fees consists of asset-based feeson client assets that we manage. For further information
about AUS, see “Assets Under Supervision” below. The
fees that we charge vary by asset class, distribution
channel and the types of services provided, and are
affected by investment performance, as well as asset
inflows and redemptions.
72

Goldman Sachs 2021 Form 10-K

‰ Incentive fees. In certain circumstances, we also receive
incentive fees based on a percentage of a fund’s or aseparately managed account’s return, or when the return
exceeds a specified benchmark or other performancetargets. Such fees include overrides, which consist of theincreased share of the income and gains derived primarily
from our private equity and credit funds when the returnon a fund’s investments over the life of the fund exceeds
certain threshold returns.
‰ Equity investments. Our alternative investing activities
relate to public and private equity investments incorporate, real estate and infrastructure entities. We also
make investments through consolidated investment
entities (CIEs), substantially all of which are engaged inreal estate investment activities.
‰ Lending and debt investments. We invest in corporate
debt and provide financing for real estate and otherassets. These activities include investments in mezzanine
debt, senior debt and distressed debt securities.
The table below presents our Asset Management assets.
As of December$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

2021

2020

$16,636
5,227
946
5,000
32,318
13,69817,290$91,115$ 8,635
4,749
1,261
6,819
34,386
16,55823,343$95,751

The table below presents our Asset Management operating
results.
Year Ended December$ in millions

2021

2020

2019

Management and other fees
Incentive fees
Equity investments
Lending and debt investments
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common$ 2,883
438
9,189
2,406
14,916
18
5,970
8,928
1,785
7,143
97
$ 7,046$ 2,785
287
4,095
817
7,984
442
5,142
2,400
581
1,819
79
$ 1,740$ 2,600
130
4,765
1,470
8,965
274
4,817
3,874
775
3,099
86
$ 3,013

Average common equity
Return on average common equity$25,195
28.0%$20,491
8.5%$21,575
14.0%

The table below presents our Equity investments net
revenues by equity type and asset class.
Year Ended December$ in millions

2021

2020

2019

Equity TypePrivate equity
Public equity
Total$ 9,266(77)$ 9,189$ 2,417
1,678$ 4,095$ 4,288477$ 4,765

Asset ClassReal estate
Corporate
Total$ 2,489
6,700$ 9,189$ 1,6212,474$ 4,095$ 2,384
2,381$ 4,765

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents details about our Lending anddebt investments net revenues.
Year Ended December$ in millions

Fair value net gains/(losses)
Net interest income
Total

2021

2020

2019

$1,1551,251$2,406$ (228)
1,045
$ 817

$ 334
1,136
$1,470Operating Environment. During 2021, the operating
environment for Asset Management improved, as global
equity prices were generally higher and credit spreads
tightened, amid economic recovery and continued support
from central banks and governments globally. If optimism
about the economic outlook declines or the ongoing efforts
to mitigate the impact of the COVID-19 pandemic are
ineffective, it may lead to a decline in asset prices, wideningof credit spreads, and investors transitioning to asset classes
that typically generate lower fees or investors withdrawing
their assets, and net revenues in Asset Management would
likely be negatively impacted.
2021 versus 2020. Net revenues in Asset Management
were $14.92 billion for 2021, 87% higher than 2020,
primarily reflecting significantly higher net revenues in
Equity investments and Lending and debt investments.
The increase in Equity investments net revenues reflectedsignificantly higher net gains from investments in private
equities, driven by company-specific events and improved
corporate performance compared with 2020, partially
offset by net losses from investments in public equities
compared with significant net gains in the prior year.
The increase in Lending and debt investments net revenues
reflected net gains from investments in debt instruments
compared with net losses in the prior year, and significantly
higher net interest income.
Incentive fees were higher, primarily driven by harvesting, andManagement and other fees were slightly higher, reflecting theimpact of higher average assets under supervision, partially
offset by higher fee waivers on money market funds.
Provision for credit losses was $18 million for 2021,
compared with $442 million for 2020, primarily due toreserve reductions in the current year reflecting continued
improvement in the broader economic environment
following challenging conditions in 2020 resulting from the
COVID-19 pandemic.
Operating expenses were $5.97 billion for 2021, 16%higher than 2020, primarily due to significantly higher
compensation and benefits expenses (reflecting strong
performance), partially offset by lower expenses related toconsolidated investments (including impairments). Pre-tax
earnings were $8.93 billion for 2021, compared with
$2.40 billion for 2020. ROE was 28.0% for 2021,
compared with 8.5% for 2020.

Consumer & Wealth Management
Consumer & Wealth Management helps clients achieve
their individual financial goals by providing a broad range
of wealth advisory and banking services, including financial
planning, investment management, deposit-taking andlending. Services are offered through our global network ofadvisors and via our digital platforms.
Wealth Management. Wealth management provides
tailored wealth advisory services to clients across the wealthspectrum. We operate globally serving individuals, families,
family offices, and foundations and endowments. Our
relationships are established directly or introduced throughcorporations that sponsor financial wellness programs fortheir employees.
We offer personalized financial planning inclusive of
income and liability management, compensation andbenefits analysis, trust and estate structuring, tax
optimization, philanthropic giving, and asset protection.
We also provide customized investment advisory solutions,and offer structuring and execution capabilities in security
and derivative products across all major global markets.
We leverage a broad, open-architecture investment
platform and our global execution capabilities to help
clients achieve their investment goals. In addition, we offer
clients a full range of private banking services, including avariety of deposit alternatives and loans that our clients use
to finance investments in both financial and nonfinancial
assets, bridge cash flow timing gaps or provide liquidity andflexibility for other needs.
Wealth management
following:

generates

revenues

from

the

‰ Management and other fees. Includes fees related to
managing assets, providing investing and wealth advisory
solutions, providing financial planning and counselingservices via Ayco Personal Financial Management, andexecuting brokerage transactions for wealth management
clients.
‰ Incentive fees. In certain circumstances, we also receive
incentive fees from wealth management clients based on apercentage of a fund’s return, or when the return exceeds
a specified benchmark or other performance targets. Suchfees include overrides, which consist of the increased
share of the income and gains derived primarily from ourprivate equity and credit funds when the return on afund’s investments over the life of the fund exceeds
certain threshold returns.
‰ Private banking and lending. Includes net interest
income allocated to deposit-taking and net interest
income earned on lending activities for wealthmanagement clients.

Goldman Sachs 2021 Form 10-K

73

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Consumer Banking. Our Consumer banking businessissues unsecured loans, through our digital platform,
Marcus by Goldman Sachs (Marcus), and credit cards, tofinance the purchases of goods or services. We also accept
deposits (including savings and time deposits) throughMarcus, in Goldman Sachs Bank USA (GS Bank USA) andGSIB. Additionally, we provide investing services throughMarcus Invest to U.S. customers.
Consumer banking revenues consist of net interest income
earned on unsecured loans issued to consumers throughMarcus and credit card lending activities, and net interest
income attributed to consumer deposits.
The table below presents our Consumer & WealthManagement assets.
As of December$ in millions

Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total

2021

2020

$ 48,573
14,358
11,932
13,53863
54,393
3,481$146,338$ 25,814
12,518
7,132
17,96952
39,7993,145$106,429

The table below presents our Consumer & WealthManagement operating results.
Year Ended December$ in millions

2021

2020

2019

Management and other fees
Incentive fees
Private banking and lending
Wealth management$ 4,691
178
1,109
5,978

$3,889
114
780
4,783

$3,475
81
783
4,339

Consumer banking
Net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common

1,492
7,470
592
6,294
584
117
467
40
$ 427

1,213
5,996
758
4,901
337
81
256
40
$ 216

864
5,203
423
4,545
235
47
188
29
$ 159

Average common equity
Return on average common equity$10,796
4.0%$8,012
2.7%$6,2922.5%

74Goldman Sachs 2021 Form 10-K

Operating Environment. During 2021, improved market
and economic conditions contributed to a more favorable
backdrop for consumer banking and wealth management
activities. Global equity prices were generally higher and, in
the U.S., unemployment decreased and consumer spending
increased compared with 2020, aided by optimism about
the economic recovery and continued support from central
banks and governments globally. If optimism about theeconomic outlook declines or the ongoing efforts tomitigate the impact of the COVID-19 pandemic are
ineffective, it may lead to a decline in asset prices, investors
favoring asset classes that typically generate lower fees,
investors withdrawing their assets and consumers
withdrawing their deposits or deterioration in consumer
credit, net revenues and the provision for credit losses inConsumer & Wealth Management would likely be
negatively impacted.
2021 versus 2020. Net revenues in Consumer & WealthManagement were $7.47 billion for 2021, 25% higher than2020.
Net revenues in Wealth management were $5.98 billion,
25% higher than 2020, due to significantly higher
Management and other fees, primarily reflecting the impactof higher average assets under supervision, and significantly
higher net revenues in Private banking and lending,primarily reflecting higher loan balances. In addition,
Incentive fees were higher, primarily due to harvesting.
Net revenues in Consumer banking were $1.49 billion,
23% higher than 2020, reflecting higher credit card anddeposit balances.
Provision for credit losses was $592 million for 2021, 22%
lower than 2020, primarily due to reserve reductions in thecurrent year reflecting continued improvement in the
broader economic environment following challenging
conditions in 2020, partially offset by growth in credit cardbalances, including approximately $185 million ofprovisions related to the commitment to acquire theGeneral Motors co-branded credit card portfolio.
Operating expenses were $6.29 billion for 2021, 28%
higher than 2020, primarily reflecting significantly higher
compensation and benefits expenses (reflecting strong
performance). Pre-tax earnings were $584 million for 2021,
73% higher than 2020. ROE was 4.0% for 2021,
compared with 2.7% for 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Assets Under Supervision
AUS includes our institutional clients’ assets and assets
sourced through third-party distributors (both included in
our Asset Management segment), as well as high-net-worthclients’ assets (included in our Consumer & WealthManagement segment), where we earn a fee for managing
assets on a discretionary basis. This includes net assets in
our mutual funds, hedge funds, credit funds, private equity
funds, real estate funds, and separately managed accounts
for institutional and individual investors. AUS also includes
client assets invested with third-party managers, privatebank deposits and advisory relationships where we earn afee for advisory and other services, but do not haveinvestment discretion. AUS does not include the selfdirected brokerage assets of our clients.
The table below presents information about our firmwide
period-end AUS by segment, asset class, distribution
channel, region and vehicle.
As of December$ in billions

Segment
Asset Management
Consumer & Wealth Management
Total AUS

2021

2020

2019

$1,719751$2,470$1,530615$2,145$1,298561$1,859Asset Class
Alternative investments
EquityFixed income
Total long-term AUS
Liquidity products
Total AUS

$ 236
613
940
1,789
681
$2,470

$ 191
475
896
1,562
583
$2,145

$ 185
423
789
1,397
462
$1,859Distribution Channel
Institutional
Wealth management
Third-party distributed
Total AUS

$ 824
751
895
$2,470

$ 761
615
769
$2,145

$ 684
561
614
$1,859

RegionAmericas
EMEA
Asia
Total AUS

$1,930354
186$2,470$1,656318
171$2,145$1,408279
172$1,859VehicleSeparate accounts
Public funds
Private funds and otherTotal AUS

$1,347811
312$2,470$1,186707
252$2,145$1,069603
187$1,859The table below presents changes in our AUS.
Year Ended December$ in billions

Asset Management
Beginning balance
Net inflows/(outflows):
Alternative investments
EquityFixed income
Total long-term AUS net inflows/(outflows)
Liquidity products
Total AUS net inflows/(outflows)
Net market appreciation/(depreciation)
Ending balance
Consumer & Wealth Management
Beginning balance
Net inflows/(outflows):
Alternative investments
EquityFixed income
Total long-term AUS net inflows/(outflows)
Liquidity products
Total AUS net inflows/(outflows)
Net market appreciation/(depreciation)
Ending balanceFirmwide
Beginning balance
Net inflows/(outflows):
Alternative investments
EquityFixed income
Total long-term AUS net inflows/(outflows)
Liquidity products
Total AUS net inflows/(outflows)
Net market appreciation/(depreciation)
Ending balance

2021

2020

2019

$1,530$1,298$1,087

15
5
54
74
76
150
39
$1,719

(3)
(12)
53
38
107
145
87
$1,530

2
34
35
71
52
123
88
$1,298

$ 615

$ 561

$ 455

18
36
2
56
22
78
58
$ 751

2
8
(6)
4
14
18
36
$ 615

9
11
17
37
13
50
56
$ 561

$2,145$1,859$1,542

33
41
56
130
98
228
97
$2,470

(1)
(4)
47
42
121
163
123
$2,145

11
45
52
108
65
173
144
$1,859In the table above, total AUS net inflows/(outflows) for2019 included $71 billion of inflows (substantially all inequity and fixed income assets) in connection with theacquisitions of Standard & Poor’s Investment Advisory
Services (SPIAS), GS Personal Financial Management andRocaton Investment Advisors (Rocaton). SPIAS andRocaton were included in the Asset Management segment
and GS Personal Financial Management was included in theConsumer & Wealth Management segment.

In the table above:‰ Liquidity products includes money market funds andprivate bank deposits.
‰ EMEA represents Europe, Middle East and Africa.

Goldman Sachs 2021 Form 10-K

75

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents information about our averagemonthly firmwide AUS by segment and asset class.

The table below presents details about our monthly average
AUS for alternative investments and the average effective
management fee we earned on such assets.

Average for theYear Ended December$ in billions

2021

2020

2019

Segment
Asset Management
Consumer & Wealth Management
Total AUS

$1,628674$2,302$1,429565$1,994$1,182505$1,687

Asset Class
Alternative investments
EquityFixed income
Total long-term AUS
Liquidity products
Total AUS

$ 211
547
919
1,677
625
$2,302

$ 183
409
829
1,421
573
$1,994

$ 176
364
746
1,286
401
$1,687

In addition to our AUS, we have discretion over alternative
investments where we currently do not earn management
fees (non-fee-earning alternative assets).
We earn management fees on client assets that we manage
and also receive incentive fees based on a percentage of afund’s or a separately managed account’s return, or when
the return exceeds a specified benchmark or otherperformance targets. These incentive fees are recognizedwhen it is probable that a significant reversal of such fees
will not occur. Our estimated unrecognized incentive fees
were $3.39 billion as of December 2021 and $1.79 billion
as of December 2020. Such amounts are based on thecompletion of the funds’ financial statements, which is
generally one quarter in arrears. These fees will berecognized, assuming no decline in fair value, if and when it
is probable that a significant reversal of such fees will notoccur, which is generally when such fees are no longer
subject to fluctuations in the market value of the assets.
Our firmwide management and other fees were$7.57 billion for 2021, $6.67 billion for 2020 and$6.08 billion for 2019. In the first quarter of 2022, weannounced that our target is to achieve management andother fees of more than $10 billion (including more than
$2 billion from alternative AUS) in 2024.
The table below presents our average effective managementfee (which excludes non-asset-based fees) earned on ourfirmwide AUS.
Year Ended December
Effective fees (bps)

2021

2020

2019

Asset Class
Alternative investments
EquityFixed income
Liquidity products

63
60
17
5

61
58
18
14

61
61
19
16

Total average effective fee

29

29

32

76

Goldman Sachs 2021 Form 10-K

$ in billions

Year Ended December 2021
Average AUS
Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total average AUS for alternative investments
Effective Fees (bps)Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total average effective fee
Year Ended December 2020
Average AUS
Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total average AUS for alternative investments
Effective Fees (bps)Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total average effective fee
Year Ended December 2019
Average AUS
Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total average AUS for alternative investments
Effective Fees (bps)Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total average effective fee

Direct Fund of
Strategies Funds Total

$ 20
19
8
51
$ 98

$59 $ 79
1
20
7
15
11
62
$78 $176
35
$211

117
102
93
61
83

57
54
56
66
58

$ 15
13
7
44
$ 79

$58 $ 73
2
15
6
13
10
54
$76 $155
28
$183

131
95
87
59
81

57
53
63
65
59

$ 16
10
6
47
$ 79

$51 $ 67
2
12
4
10
11
58
$68 $147
29
$176

134
108
88
61
84

52
48
59
61
54

72
98
76
62
72
17
63

73
89
75
60
70
13
61

73
99
76
61
70
13
61

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents information about our period-end
AUS for alternative investments, non-fee-earning
alternative investments and total alternative investments.
$ in billions

AUS

Non-fee-earning
alternative
assets

As of December 2021
Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total alternative investments

$ 87
25
16
70
198
38
$236

$ 79
69
39
2
189
1
$190

Total
alternative
assets

$166
94
55
72
387
39
$426

As of December 2020
Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total alternative investments

$ 74
18
13
56
161
30
$191

$ 51
72
43
2
168
1
$169

$125
90
56
58
329
31
$360

As of December 2019
Corporate equity
CreditReal estate
Hedge funds and otherFunds and discretionary accounts
Advisory accounts
Total alternative investments

$ 76
14
8
58
156
29
$185

$ 38
51
43
2
134
–
$134

$114
65
51
60
290
29
$319

In the table above:‰ Corporate equity primarily includes private equity.
‰ Total alternative investments included uncalled capitalthat is available for future investing of $42 billion as ofDecember 2021, $44 billion as of December 2020 and$32 billion as of December 2019.
‰ Non-fee-earning alternative investments primarily includes
investments that we hold on our balance sheet, ourunfunded commitments, unfunded commitments of ourclients (where we do not charge fees on commitments),
credit facilities collateralized by fund assets and employee
funds. Our calculation of non-fee-earning alternative
investments may not be comparable to similar calculations
used by other companies.
In the beginning of 2020, we announced a strategic
objective of growing our third-party alternatives business,and established a target of achieving gross inflows of$150 billion for alternative investments by the end of 2024.
In the first quarter of 2022, we increased that target to$225 billion by the end of 2024.
The table below presents information about third-party
commitments raised in our alternatives business during2020 and 2021.
$ in billions

Included in AUS
Included in non-fee-earning alternative assets
Third-party commitments raised

As ofDecember 2021

$ 64
43
$107

In the table above, commitments included in
non-fee-earning
alternative
investments
includedapproximately $29 billion which will begin to earn fees(and become AUS), if and when the commitments are
drawn and assets are invested.
The table below presents information about alternative
investments in our Asset Management segment that wehold on our balance sheet.

$ in billions

CIE
Debt
Equity investments
Loans securities securities
and other Total

As of December 2021
Corporate equity
CreditReal estate
Other
Total

$ –
7
7
–
$14

$ –
11
2
–
$13

$15
–
4
–
$19

$ – $15
– 18
14 27
1
1
$15 $61

As of December 2020
Corporate equity
CreditReal estate
Other
Total

$ –
8
9
–
$17

$ –
11
2
–
$13

$16
–
4
–
$20

$ – $16
– 19
19 34
1
1
$20 $70

As of December 2019
Corporate equity
CreditReal estate
Other
Total

$ –
8
9
–
$17

$ –
12
2
–
$14

$17
–
5
–
$22

$ – $17
– 20
17 33
1
1
$18 $71

Loans and Debt Securities. The table below presents theconcentration of loans and debt securities within ouralternative investments by accounting classification, region
and industry.
As of December$ in billions

2021

2020

Loans
Debt securities
Total

$14
13
$27

$ 17
13
$ 30

Accounting Classification
Debt securities at fair value
Loans at amortized cost
Loans at fair value
Total

48%
40%
12%
100%

44%
43%
13%
100%

RegionAmericas
EMEA
Asia
Total

44%
34%
22%
100%

45%
33%
22%
100%

Industry
Consumers
Financial Institutions
Healthcare
Industrials
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other
Total

4%
8%
11%
14%
3%
33%
17%
10%
100%

5%
7%
9%
15%
4%
36%
14%
10%
100%

Goldman Sachs 2021 Form 10-K

77

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Equity Securities. The table below presents theconcentration of equity securities within our alternative
investments by region and industry.

The table below presents the rollforward of our equity
securities within our alternative investments from the
beginning of 2020 through the end of 2021.
$ in billions

As of December$ in billions

2021

2020

Equity securities

$19

$20

RegionAmericas
EMEA
Asia
Total

57%
23%
20%
100%

51%
18%
31%
100%

Industry
Consumers
Financial Institutions
Healthcare
Industrials
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other
Total

6%
11%
11%
7%
10%
22%
30%
3%
100%

2%
25%
8%
5%
7%
18%
31%
4%
100%

Total Equity

Beginning balance
Additions
Dispositions
Mark-ups
Ending balance

$ 22
6
(18)
9
$ 19

CIE Investments and Other. CIE investments and otherincluded assets held by CIEs of $14 billion as ofDecember 2021 and $19 billion as of December 2020,
which were funded with liabilities of approximately$7 billion as of December 2021 and $10 billion as ofDecember 2020. Substantially all such liabilities werenonrecourse, thereby reducing our equity at risk.
The table below presents the concentration of CIE assets,
net of financings, within our alternative investments byregion and asset class.
As of December

In the table above:$ in billions‰ Equity securities included $15 billion as ofDecember 2021 and $17 billion as of December 2020 ofprivate equity positions, and $4 billion as ofDecember 2021 and $3 billion as of December 2020 of
public equity positions that converted from private equity
upon the initial public offerings of the underlying
companies.
‰ The concentrations for real estate equity securities as ofDecember 2021 were 5% for multifamily (3% as ofDecember 2020), 5% for office (3% as ofDecember 2020), 6% for mixed use (5% as ofDecember 2020) and 6% for other real estate equity
securities (7% as of December 2020).
The table below presents the concentration of equity
securities within our alternative investments by vintage.
Vintage

2021

2020

$7

$9

RegionAmericas
EMEA
Asia
Total

63%
25%
12%
100%

63%
22%
15%
100%

Asset Class
Hospitality
Industrials
Multifamily
OfficeRetailSenior Housing
Student Housing
Other
Total

4%
10%
23%
24%
5%
16%
6%
12%
100%

4%
10%
23%
28%
6%
13%
7%
9%
100%

CIE assets, net of financings

The table below presents the concentration of CIE assets,
net of financings, within our alternative investments by
vintage.
Vintage

As of December 2021
2014 or earlier
2015 - 20172018 - thereafter
Total

21%
31%
48%
100%

As of December 20202013 or earlier
2014 - 20162017 - thereafter
Total

As of December 2021
2014 or earlier
2015 - 20172018 - thereafter
Total

2%
29%
69%
100%

33%
34%
33%
100%

As of December 20202013 or earlier
2014 - 20162017 - thereafter
Total

1%
17%
82%
100%

As we continue to grow our third-party alternatives
business, we remain focused on our strategic objective to
reduce the capital intensity of the Asset Management
segment by reducing our on-balance sheet equity
investments.
78

Goldman Sachs 2021 Form 10-K

Geographic Data
See Note 25 to the consolidated financial statements for asummary of our total net revenues, pre-tax earnings and net
earnings by geographic region.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Balance Sheet and Funding Sources
Balance Sheet Management
One of our risk management disciplines is our ability to
manage the size and composition of our balance sheet.
While our asset base changes due to client activity, market
fluctuations and business opportunities, the size andcomposition of our balance sheet also reflects factors,
including (i) our overall risk tolerance, (ii) the amount of
capital we hold and (iii) our funding profile, among otherfactors. See “Capital Management and Regulatory
Capital — Capital Management” for information about
our capital management process.
Although our balance sheet fluctuates on a day-to-day
basis, our total assets at quarter-end and year-end dates are
generally not materially different from those occurring
within our reporting periods.
In order to ensure appropriate risk management, we seek tomaintain a sufficiently liquid balance sheet and haveprocesses in place to dynamically manage our assets andliabilities, which include (i) balance sheet planning,(ii) balance sheet limits, (iii) monitoring of key metrics and(iv) scenario analyses.
Balance Sheet Planning. We prepare a balance sheet planthat combines our projected total assets and composition ofassets with our expected funding sources over a three-yeartime horizon. This plan is reviewed quarterly and may be
adjusted in response to changing business needs or market
conditions. The objectives of this planning process are:
‰ To develop our balance sheet projections, taking into
account the general state of the financial markets andexpected business activity levels, as well as regulatory
requirements;‰ To allow Treasury and our independent risk oversightand control functions to objectively evaluate balance
sheet limit requests from our revenue-producing units inthe context of our overall balance sheet constraints,
including our liability profile and capital levels, and key
metrics; and‰ To inform the target amount, tenor and type of funding toraise, based on our projected assets and contractual
maturities.
Treasury and our independent risk oversight and control
functions, along with our revenue-producing units, review
current and prior period information and expectations forthe year to prepare our balance sheet plan. The specificinformation reviewed includes asset and liability size andcomposition, limit utilization, risk and performancemeasures, and capital usage.

Our consolidated balance sheet plan, including our balance
sheets by business, funding projections and projected key
metrics, is reviewed and approved by the Firmwide Asset
Liability Committee and the Risk Governance Committee.
See “Risk Management — Overview and Structure of Risk
Management” for an overview of our risk management
structure.
Balance Sheet Limits. The Firmwide Asset Liability
Committee and the Risk Governance Committee have theresponsibility to review and approve balance sheet limits.
These limits are set at levels which are close to actual
operating levels, rather than at levels which reflect our
maximum risk appetite, in order to ensure prompt
escalation and discussion among our revenue-producing
units, Treasury and our independent risk oversight andcontrol functions on a routine basis. Requests for changes
in limits are evaluated after giving consideration to theirimpact on our key metrics. Compliance with limits ismonitored by our revenue-producing units and Treasury, as
well as our independent risk oversight and control
functions.
Monitoring of Key Metrics. We monitor key balance
sheet metrics both by business and on a consolidated basis,including asset and liability size and composition, limit
utilization and risk measures. We attribute assets tobusinesses and review and analyze movements resulting
from new business activity, as well as market fluctuations.
Scenario Analyses. We conduct various scenario
analyses, including as part of CCAR and U.S. Dodd-Frank
Wall Street Reform and Consumer Protection Act Stress
Tests (DFAST), as well as our resolution and recovery
planning. See “Capital Management and Regulatory
Capital — Capital Management” for further information
about these scenario analyses. These scenarios cover shortand long-term time horizons using various macroeconomic
and firm-specific assumptions, based on a range of
economic scenarios. We use these analyses to assist us indeveloping our longer-term balance sheet management
strategy, including the level and composition of assets,
funding and capital. Additionally, these analyses help us
develop approaches for maintaining appropriate funding,liquidity and capital across a variety of situations, including
a severely stressed environment.

Goldman Sachs 2021 Form 10-K

79

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Balance Sheet Analysis and Metrics
As of December 2021, total assets in our consolidatedbalance sheets were $1.46 trillion, an increase of$300.96 billion from December 2020, primarily reflecting
increases in collateralized agreements of $134.25 billion(primarily reflecting the impact of our and our clients’
activities), cash and cash equivalents of $105.19 billion(primarily reflecting our activity), loans of $42.45 billion(reflecting increases across the portfolio), and customer andother receivables of $39.34 billion (primarily reflecting
client activity).
As of December 2021, total liabilities in our consolidatedbalance sheets were $1.35 trillion, an increase of$286.97 billion from December 2020, primarily reflecting
increases in deposits of $104.27 billion (reflecting increases
across channels), customer and other payables of$61.27 billion (primarily reflecting client activity),collateralized financings of $56.99 billion (primarilyreflecting the impact of our and our clients’ activities),
unsecured borrowings of $34.70 billion (primarily driven
by new issuances partially offset by maturities), and trading
liabilities of $27.70 billion (primarily reflecting the impactof our and our clients’ activities in government obligations,and corporate and other debt obligations, partially offset by
the impact of interest rates, currency and commodity pricemovements on derivative instruments).
Our total securities sold under agreements to repurchase(repurchase agreements), accounted for as collateralized
financings, were $165.88 billion as of December 2021 and$126.57 billion as of December 2020, which were 3% higher
as of December 2021 and 24% higher as of December 2020
than the average daily amount of repurchase agreements over
the respective quarters, and 14% higher as ofDecember 2021 and 31% higher as of December 2020 than
the average daily amount of repurchase agreements over therespective years. As of December 2021, the increase in our
repurchase agreements relative to the average daily amountof repurchase agreements during the quarter and year
resulted from higher levels of our and our clients’ activities atthe end of the period.
The level of our repurchase agreements fluctuates between
and within periods, primarily due to providing clients withaccess to highly liquid collateral, such as certain
government and agency obligations, through collateralized
financing activities.
The table below presents information about our balance
sheet and leverage ratios.
As of December$ in millions

Total assets
Unsecured long-term borrowings
Total shareholders’ equity
Leverage ratio
Debt-to-equity ratio
80

Goldman Sachs 2021 Form 10-K

2021

2020

$1,463,988$ 254,092$ 109,926
13.3x
2.3x

$1,163,028$ 213,481$ 95,932
12.1x
2.2x

In the table above:‰ The leverage ratio equals total assets divided by total
shareholders’ equity and measures the proportion ofequity and debt we use to finance assets. This ratio isdifferent from the leverage ratios included in Note 20 tothe consolidated financial statements.
‰ The debt-to-equity ratio equals unsecured long-termborrowings divided by total shareholders’ equity.
The table below presents information about ourshareholders’ equity and book value per common share,including the reconciliation of common shareholders’equity to tangible common shareholders’ equity.
As of December$ in millions, except per share amounts

2021

2020

Total shareholders’ equity
Preferred stock
Common shareholders’ equity
Goodwill
Identifiable intangible assets
Tangible common shareholders’ equity$109,926(10,703)
99,223(4,285)(418)$ 94,520$ 95,932(11,203)
84,729(4,332)(630)$ 79,767

Book value per common share
Tangible book value per common share$ 284.39$ 270.91$ 236.15$ 222.32

In the table above:‰ Tangible common shareholders’ equity is calculated as
total shareholders’ equity less preferred stock, goodwill
and identifiable intangible assets. We believe that tangible
common shareholders’ equity is meaningful because it is ameasure that we and investors use to assess capital
adequacy. Tangible common shareholders’ equity is a
non-GAAP measure and may not be comparable tosimilar non-GAAP measures used by other companies.
‰ Book value per common share and tangible book value
per common share are based on common shares
outstanding and restricted stock units granted to
employees with no future service requirements and not
subject to performance or market conditions (collectively,
basic shares) of 348.9 million as of December 2021 and358.8 million as of December 2020. We believe thattangible book value per common share (tangible commonshareholders’ equity divided by basic shares) ismeaningful because it is a measure that we and investors
use to assess capital adequacy. Tangible book value percommon share is a non-GAAP measure and may not becomparable to similar non-GAAP measures used by othercompanies.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Funding Sources
Our primary sources of funding are deposits, collateralized
financings, unsecured short- and long-term borrowings,
and shareholders’ equity. We seek to maintain broad anddiversified funding sources globally across products,
programs, markets, currencies and creditors to avoid
funding concentrations.
The table below presents information about our funding sources.
As of December$ in millions

2021

Deposits$ 364,227
Collateralized financings
230,932
Unsecured short-term borrowings
46,955
Unsecured long-term borrowings
254,092
Total shareholders’ equity
109,926
Total$1,006,132

2020

36%
23%
5%
25%
11%
100%

$259,962
173,947
52,870213,481
95,932$796,192

33%
22%
6%
27%
12%
100%

Our funding is primarily raised in U.S. dollar, Euro, British poundand Japanese yen. We generally distribute our funding products
through our own sales force and third-party distributors to alarge, diverse creditor base in a variety of markets in the Americas,
Europe and Asia. We believe that our relationships with ourcreditors are critical to our liquidity. Our creditors include banks,
governments, securities lenders, corporations, pension funds,
insurance companies, mutual funds and individuals. We have
imposed various internal guidelines to monitor creditor
concentration across our funding programs.
Deposits. Our deposits provide us with a diversified sourceof funding and reduce our reliance on wholesale funding.
We raise deposits, including savings, demand and time
deposits, from private bank clients, consumers, transaction
banking clients, other institutional clients, and throughinternal and third-party broker-dealers. Substantially all ofour deposits are raised through GS Bank USA and GSIB.
See Note 13 to the consolidated financial statements forfurther information about our deposits, including amaturity profile of our time deposits.
Secured Funding. We fund a significant amount of inventory
and a portion of investments on a secured basis. Secured funding
includes collateralized financings in the consolidated balance
sheets. See Note 11 to the consolidated financial statements forfurther information about our collateralized financings,
including its maturity profile. We may also pledge our inventory
and investments as collateral for securities borrowed under asecurities lending agreement. We also use our own inventory andinvestments to cover transactions in which we or our clients havesold securities that have not yet been purchased. Secured fundingis less sensitive to changes in our credit quality than unsecured
funding, due to our posting of collateral to our lenders.
Nonetheless, we analyze the refinancing risk of our secured
funding activities, taking into account trade tenors, maturity
profiles, counterparty concentrations, collateral eligibility andcounterparty rollover probabilities. We seek to mitigate ourrefinancing risk by executing term trades with staggeredmaturities, diversifying counterparties, raising excess secured
funding and pre-funding residual risk through our GCLA.

We seek to raise secured funding with a term appropriate
for the liquidity of the assets that are being financed, and weseek longer maturities for secured funding collateralized byasset classes that may be harder to fund on a secured basis,
especially during times of market stress. Our secured
funding, excluding funding collateralized by liquid
government and agency obligations, is primarily executedfor tenors of one month or greater and is primarily executed
through term repurchase agreements and securities loaned
contracts.
Assets that may be harder to fund on a secured basis during
times of market stress include certain financial instrumentsin the following categories: mortgage and other assetbacked loans and securities, non-investment-grade
corporate debt securities, equity securities and emerging
market securities.
We also raise financing through other types ofcollateralized financings, such as secured loans and notes.
GS Bank USA has access to funding from the Federal Home
Loan Bank. Our outstanding borrowings against theFederal Home Loan Bank were $100 million as ofDecember 2021 and we had no outstanding borrowings asof December 2020. Additionally, we have access to funding
through the Federal Reserve discount window. However,
we do not rely on this funding in our liquidity planning andstress testing.
Unsecured Short-Term Borrowings. A significant
portion of our unsecured short-term borrowings was
originally long-term debt that is scheduled to mature within
one year of the reporting date. We use unsecured short-termborrowings, including U.S. and non-U.S. hybrid financial
instruments and commercial paper, to finance liquid assets
and for other cash management purposes. In accordancewith regulatory requirements, Group Inc. does not issue
debt with an original maturity of less than one year, otherthan to its subsidiaries. See Note 14 to the consolidated
financial statements for further information about our
unsecured short-term borrowings.

Goldman Sachs 2021 Form 10-K

81

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Unsecured Long-Term Borrowings. Unsecured longterm borrowings, including structured notes, are raised
through syndicated U.S. registered offerings, U.S. registered
and Rule 144A medium-term note programs, offshore
medium-term note offerings and other debt offerings. We
issue in different tenors, currencies and products tomaximize the diversification of our investor base.
The table below presents our quarterly unsecured long-termborrowings maturity profile.
$ in millions

First
Quarter

SecondQuarter

Third
Quarter

FourthQuarter$15,373$ 8,622$ 6,855$ 6,174$7,271$8,948$9,732$3,773$8,939$8,869$5,671$3,485$11,628$ 7,297$ 6,545$ 8,725

Total

As of December 2021
2023
2024
2025
2026
2027 - thereafter
Total$ 43,211
33,73628,80322,157
126,185$254,092

The weighted average maturity of our unsecured long-termborrowings as of December 2021 was approximately sevenyears. To mitigate refinancing risk, we seek to limit the
principal amount of debt maturing over the course of any
monthly, quarterly or annual time horizon. We enter into
interest rate swaps to convert a portion of our unsecured
long-term borrowings into floating-rate obligations tomanage our exposure to interest rates. See Note 14 to theconsolidated financial statements for further information
about our unsecured long-term borrowings. We issued
approximately $60 billion of benchmark debt during 2021
to support the growth in our total assets amid client demand
and attractive return opportunities. We intend to issue
significantly less benchmark debt in 2022 compared to ourbenchmark debt issuance in 2021, though actual issuances
may differ due to business needs and market opportunities.
Shareholders’ Equity. Shareholders’ equity is a stable andperpetual source of funding. See Note 19 to theconsolidated financial statements for further information
about our shareholders’ equity.

Capital Management and Regulatory Capital
Capital adequacy is of critical importance to us. We have inplace a comprehensive capital management policy that provides
a framework, defines objectives and establishes guidelines toassist us in maintaining the appropriate level and composition ofcapital in both business-as-usual and stressed conditions.
Capital Management
We determine the appropriate amount and composition of ourcapital by considering multiple factors, including our current
and future regulatory capital requirements, the results of ourcapital planning and stress testing process, the results ofresolution capital models and other factors, such as rating
agency guidelines, subsidiary capital requirements, thebusiness environment and conditions in the financial markets.
82

Goldman Sachs 2021 Form 10-K

We manage our capital requirements and the levels of ourcapital usage principally by setting limits on the balance
sheet and/or limits on risk, in each case at both the firmwide
and business levels.
We principally manage the level and composition of ourcapital through issuances and repurchases of our common
stock.
We may issue, redeem or repurchase our preferred stock,junior subordinated debt issued to trusts and othersubordinated debt or other forms of capital as businessconditions warrant. Prior to such redemptions orrepurchases, we must receive approval from the FRB. See
Notes 14 and 19 to the consolidated financial statements
for further information about our preferred stock, juniorsubordinated debt issued to trusts and other subordinateddebt.
Capital Planning and Stress Testing Process. As part ofcapital planning, we project sources and uses of capitalgiven a range of business environments, including stressed
conditions. Our stress testing process is designed to identify
and measure material risks associated with our businessactivities, including market risk, credit risk, operational risk
and liquidity risk, as well as our ability to generate
revenues.
Our capital planning process incorporates an internal
capital adequacy assessment with the objective of ensuringthat we are appropriately capitalized relative to the risks inour businesses. We incorporate stress scenarios into ourcapital planning process with a goal of holding sufficient
capital to ensure we remain adequately capitalized after
experiencing a severe stress event. Our assessment of capital
adequacy is viewed in tandem with our assessment ofliquidity adequacy and is integrated into our overall risk
management structure, governance and policy framework.
Our stress tests incorporate our internally designed stressscenarios, including our internally developed severely
adverse scenario, and those required by the FRB, and aredesigned to capture our specific vulnerabilities and risks.
We provide further information about our stress test
processes and a summary of the results on our website as
described in “Business — Available Information” in Part I,
Item 1 of this Form 10-K.
As required by the FRB’s CCAR rules, we submit an annual
capital plan for review by the FRB. The purpose of the
FRB’s review is to ensure that we have a robust, forwardlooking capital planning process that accounts for our
unique risks and that permits continued operation during
times of economic and financial stress.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The FRB evaluates us based, in part, on whether we havethe capital necessary to continue operating under thebaseline and severely adverse scenarios provided by the
FRB and those developed internally. This evaluation also
takes into account our process for identifying risk, ourcontrols and governance for capital planning, and ourguidelines for making capital planning decisions. In
addition, the FRB evaluates our plan to make capital
distributions (i.e., dividend payments and repurchases orredemptions of stock, subordinated debt or other capitalsecurities) and issue capital, across the range ofmacroeconomic scenarios and firm-specific assumptions.
The FRB determines the SCB applicable to us based on its
own annual stress test. The SCB under the Standardized
approach is calculated as (i) the difference between ourstarting and minimum projected CET1 capital ratios under
the supervisory severely adverse scenario and (ii) ourplanned common stock dividends for each of the fourth
through seventh quarters of the planning horizon,
expressed as a percentage of risk-weighted assets (RWAs).
We submitted our 2021 CCAR capital plan in April 2021
and published a summary of our annual DFAST results inJune 2021. See “Business — Available Information” inPart I, Item 1 of this Form 10-K. Based on our 2021 CCAR
submission, the FRB reduced our SCB from 6.6% to 6.4%,
resulting in a Standardized CET1 capital ratio requirementof 13.4% for the period from October 1, 2021 throughSeptember 30, 2022. See “Share Repurchase Program” forfurther information about common stock repurchases anddividends.
GS Bank USA has its own capital planning process and,starting in 2022, will be required to submit its annual stresstest results to the FRB. GSI, GSIB and Goldman Sachs Bank
Europe SE (GSBE) also have their own capital planning andstress testing processes, which incorporate internallydesigned stress tests developed in accordance with theguidelines of their respective regulators.
Contingency Capital Plan. As part of our comprehensive
capital management policy, we maintain a contingency
capital plan. Our contingency capital plan provides aframework for analyzing and responding to a perceived or
actual capital deficiency, including, but not limited to,
identification of drivers of a capital deficiency, as well as
mitigants and potential actions. It outlines the appropriate
communication procedures to follow during a crisis period,
including internal dissemination of information, as well as
timely communication with external stakeholders.

Capital Attribution. We assess each of our businesses’
capital usage based on our internal assessment of risks,
which incorporates an attribution of our relevant
regulatory capital requirements. These regulatory capitalrequirements are allocated using our attributed equity
framework, which takes into consideration our mostbinding capital constraints. Our most binding capitalconstraint is based on the results of the FRB’s annual stress
test, which includes the Standardized risk-based capital andleverage ratios.
We review and make any necessary adjustments to ourattributed equity in January each year, to reflect, among
other things, the results of our latest CCAR process, as wellas projected changes in our balance sheet. On
January 1, 2021, our allocation of attributed equity
changed (relative to the allocation as of December 2020) as
follows: attributed equity increased by approximately$3.7 billion for Asset Management and approximately$0.7 billion for Consumer & Wealth Management, while
attributed equity decreased by approximately $2.3 billion
for Global Markets and approximately $2.1 billion for
Investment Banking. On January 1, 2022, our allocation of
attributed equity changed (relative to the allocation as ofDecember 2021) as follows: attributed equity increased byapproximately $1.0 billion for Consumer & WealthManagement and approximately $0.5 billion for
Investment Banking, while attributed equity decreased byapproximately $0.8 billion for Global Markets andapproximately $0.7 billion for Asset Management. See“Segment Assets and Operating Results — Segment
Operating Results” for information about our averagequarterly attributed equity by segment.
Share Repurchase Program. We use our share
repurchase program to help maintain the appropriate levelof common equity. The repurchase program is effectedprimarily through regular open-market purchases (which
may include repurchase plans designed to comply with
Rule 10b5-1 and accelerated share repurchases), theamounts and timing of which are determined primarily by
our current and projected capital position and our capitalplan submitted to the FRB as part of CCAR. The amounts
and timing of the repurchases may also be influenced bygeneral market conditions and the prevailing price andtrading volumes of our common stock.

Goldman Sachs 2021 Form 10-K

83

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
In the third quarter of 2021, the Board of Directors ofGroup Inc. (Board) approved an increase in our common
stock dividend from $1.25 to $2.00 per share. During thefourth quarter of 2021, we returned a total of $1.20 billion
to shareholders, including common stock repurchases of$500 million and approximately $700 million in common
stock dividends. We currently expect our common stock
repurchases in the first quarter of 2022 to be at or aroundthe levels of common stock repurchases in the fourth
quarter of 2021. Consistent with our capital management
philosophy, we will continue prioritizing deployment of
capital for our clients where returns are attractive andreturn any excess capital to shareholders through dividends
and share repurchases.
As of December 2021, the remaining share authorization
under our existing repurchase program was 34.4 million
shares. See “Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity
Securities” in Part II, Item 5 of this Form 10-K and Note 19
to the consolidated financial statements for further
information about our share repurchase program, and see
above for information about our capital planning and stresstesting process.
Resolution Capital Models. In connection with ourresolution planning efforts, we have established a
Resolution Capital Adequacy and Positioning framework,
which is designed to ensure that our major subsidiaries (GSBank USA, Goldman Sachs & Co. LLC (GS&Co.), GSI,
GSIB, GSBE, Goldman Sachs Japan Co., Ltd. (GSJCL),
Goldman Sachs Asset Management, L.P. and Goldman
Sachs Asset Management International) have access to
sufficient loss-absorbing capacity (in the form of equity,
subordinated debt and unsecured senior debt) so that they
are able to wind-down following a Group Inc. bankruptcy
filing in accordance with our preferred resolution strategy.
In addition, we have established a triggers and alerts
framework, which is designed to provide the Board withinformation needed to make an informed decision onwhether and when to commence bankruptcy proceedingsfor Group Inc.
Rating Agency Guidelines
The credit rating agencies assign credit ratings to the
obligations of Group Inc., which directly issues orguarantees substantially all of our senior unsecured debt
obligations. GS&Co. and GSI have been assigned long- andshort-term issuer ratings by certain credit rating agencies.
GS Bank USA, GSIB and GSBE have also been assigned
long- and short-term issuer ratings, as well as ratings ontheir long- and short-term bank deposits. In addition, credit
rating agencies have assigned ratings to debt obligations ofcertain other subsidiaries of Group Inc.

84

Goldman Sachs 2021 Form 10-K

The level and composition of our capital are among themany factors considered in determining our credit ratings.
Each agency has its own definition of eligible capital andmethodology for evaluating capital adequacy, andassessments are generally based on a combination of factors
rather than a single calculation. See “Risk Management —Liquidity Risk Management — Credit Ratings” for further
information about credit ratings of Group Inc., GS Bank
USA, GSIB, GSBE, GS&Co. and GSI.
Consolidated Regulatory Capital
We are subject to consolidated regulatory capitalrequirements which are calculated in accordance with theregulations of the FRB (Capital Framework). Under the
Capital Framework, we are an “Advanced approach”
banking organization and have been designated as a global
systemically important bank (G-SIB).
The capital requirements calculated under the Capital
Framework include the capital conservation buffer
requirements, which are comprised of a 2.5% buffer (underthe Advanced Capital Rules), the SCB (under theStandardized Capital Rules), a countercyclical capital
buffer (under both Capital Rules) and the G-SIB surcharge(under both Capital Rules). Our G-SIB surcharge is 2.5%
for 2021 and 2022 and 3.0% for 2023. Based on financial
data for 2021, we are above the threshold for the 3.5%
G-SIB surcharge. The earliest this surcharge could be
effective is January 2024. The G-SIB surcharge andcountercyclical capital buffer in the future may differ due toadditional guidance from our regulators and/or positionalchanges, and our SCB is likely to change from year to year
based on the results of the annual supervisory stress tests.
Our target is to maintain capital ratios equal to theregulatory requirements plus a buffer of 50 to 100 basis
points.
See Note 20 to the consolidated financial statements forfurther information about our risk-based capital ratios andleverage ratios, and the Capital Framework.
Total Loss-Absorbing Capacity (TLAC)
We are also subject to the FRB’s TLAC and related
requirements. Failure to comply with the TLAC and related
requirements would result in restrictions being imposed by
the FRB and could limit our ability to repurchase shares,
pay dividends and make certain discretionary
compensation payments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents TLAC and external long-term
debt requirements.
As of December

TLAC to RWAs
TLAC to leverage exposure
External long-term debt to RWAs
External long-term debt to leverage exposure

2021

2020

21.5%
9.5%
8.5%
4.5%

22.0%
9.5%
8.5%
4.5%

In the table above:‰ As of both December 2021 and December 2020, the
TLAC to RWAs requirement included (i) the 18%
minimum, (ii) the 2.5% buffer, (iii) the countercyclicalcapital buffer, which the FRB has set to zero percent and(iv) the G-SIB surcharge (Method 1). The G-SIB surcharge(Method 1) was 1.0% as of December 2021 and 1.5% asof December 2020.
‰ The TLAC to leverage exposure requirement
includes (i) the 7.5% minimum and (ii) the 2.0% leverage
exposure buffer.
‰ The external long-term debt to RWAs requirement
includes (i) the 6% minimum and (ii) the 2.5% G-SIB
surcharge (Method 2).
‰ The external long-term debt to total leverage exposure is
the 4.5% minimum.
The table below presents information about our TLAC andexternal long-term debt ratios.
For the Three Months
Ended or as of December$ in millions

TLAC
External long-term debt
RWAs
Leverage exposure
TLAC to RWAs
TLAC to leverage exposure
External long-term debt to RWAs
External long-term debt to leverage exposure

2021

2020

$ 297,765$ 174,500$ 676,863$1,910,521$ 242,730$ 139,200$ 609,750$1,332,937

44.0%
15.6%
25.8%
9.1%

39.8%
18.2%
22.8%
10.4%

In the table above:‰ TLAC includes common and preferred stock, and eligible
long-term debt issued by Group Inc. Eligible long-term
debt represents unsecured debt, which has a remaining
maturity of at least one year and satisfies additional
requirements.
‰ External long-term debt consists of eligible long-term
debt subject to a haircut if it is due to be paid between one
and two years.
‰ RWAs represent Standardized RWAs as ofDecember 2021 and Advanced RWAs as ofDecember 2020. In accordance with the TLAC rules, thehigher of Advanced or Standardized RWAs are used in
the calculation of TLAC and external long-term debt
ratios and applicable requirements.

‰ Leverage exposure consists of average adjusted total
assets and certain off-balance sheet exposures. Leverage
exposure for the three months ended December 2020
excluded average holdings of U.S. Treasury securities andaverage deposits at the Federal Reserve as permitted by
the FRB under a temporary amendment. This temporary
amendment had the effect of increasing the TLAC toleverage exposure ratio and the external long-term debt toleverage ratio. The impact of this temporary amendment
was an increase to the TLAC to leverage exposure ratio of
2.4 percentage points and the external long-term debt toleverage exposure ratio of 1.3 percentage points for thethree months ended December 2020. The amendment
permitting this exclusion expired on April 1, 2021.
See “Business — Regulation” in Part I, Item 1 of thisForm 10-K for further information about TLAC.
Subsidiary Capital Requirements
Many of our subsidiaries, including our bank and brokerdealer subsidiaries, are subject to separate regulation andcapital requirements of the jurisdictions in which they
operate.
Bank Subsidiaries. GS Bank USA is our primary U.S.
banking subsidiary and GSIB and GSBE are our primary
non-U.S. banking subsidiaries. These entities are subject toregulatory capital requirements. See Note 20 to theconsolidated financial statements for further information
about the regulatory capital requirements of our banksubsidiaries.
U.S. Regulated Broker-Dealer Subsidiaries. GS&Co. is
our primary U.S. regulated broker-dealer subsidiary and issubject to regulatory capital requirements, including those
imposed by the SEC and the Financial Industry Regulatory
Authority, Inc. In addition, GS&Co. is a registered futurescommission merchant and a registered swap dealer with the
CFTC, and therefore is subject to regulatory capitalrequirements imposed by the CFTC, the Chicago
Mercantile Exchange and the National Futures Association.
Beginning in the fourth quarter of 2021, GS&Co. also
became a registered security-based swap dealer with theSEC, and therefore became subject to capital requirements
for security-based swap dealers which became effective in
October 2021. Rule 15c3-1 of the SEC and Rules 1.17 andPart 23 Subpart E of the CFTC specify uniform minimum
net capital requirements, as defined, for their registrants,
and also effectively require that a significant part of theregistrants’ assets be kept in relatively liquid form. GS&Co.
has elected to calculate its minimum capital requirements inaccordance with the “Alternative Net Capital
Requirement” as permitted by Rule 15c3-1 of the SEC.

Goldman Sachs 2021 Form 10-K

85

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
GS&Co. had regulatory net capital, as defined byRule 15c3-1, of $22.18 billion as of December 2021 and$22.38 billion as of December 2020, which exceeded theamount required by $17.74 billion as of December 2021
and $18.45 billion as of December 2020. In addition to its
alternative minimum net capital requirements, GS&Co. is
also required to hold tentative net capital in excess of$5 billion and net capital in excess of $1 billion inaccordance with Rule 15c3-1. GS&Co. is also required to
notify the SEC in the event that its tentative net capital isless than $6 billion. As of both December 2021 andDecember 2020, GS&Co. had tentative net capital and net
capital in excess of both the minimum and the notification
requirements.
Non-U.S. Regulated Broker-Dealer Subsidiaries. Our
principal non-U.S. regulated broker-dealer subsidiaries
include GSI and GSJCL.
GSI, our U.K. broker-dealer, is regulated by the Prudential
Regulation Authority (PRA) and the Financial Conduct
Authority (FCA). GSI is subject to the U.K. capitalframework, which is predominantly aligned with the E.U.
capital framework prescribed in the amended E.U. Capital
Requirements Directive (CRD) and the E.U. Capital
Requirements Regulation (CRR). These capital regulations
are largely based on the Basel Committee on Banking
Supervision’s (Basel Committee) capital framework forstrengthening international capital standards (Basel III).
The table below presents GSI’s risk-based capitalrequirements.
As of December

Risk-based capital requirements
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

2021

2020

8.1%
9.9%
12.4%

8.1%
10.0%
12.5%

In the table above, the risk-based capital requirements
incorporate capital guidance received from the PRA andcould change in the future.
The table below presents information about GSI’s riskbased capital ratios.
As of December$ in millions

2021

2020

Risk-based capital and risk-weighted assets
CET1 capital$ 28,810
Tier 1 capital$ 37,110
Tier 2 capital$ 5,377
Total capital$ 42,487
RWAs$269,762$ 26,962$ 35,262$ 5,377$ 40,639$252,355

Risk-based capital ratios
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
86

Goldman Sachs 2021 Form 10-K

10.7%
13.8%
15.7%

10.7%
14.0%
16.1%

In the table above, the risk-based capital ratios as ofDecember 2021 reflected GSI’s profits after foreseeable
charges for the three months ended December 2021 (which
will not be finalized until verification by GSI’s external
auditors and approval by GSI’s Board of Directors forinclusion in risk-based capital). These profits contributed
approximately 16 basis points to the CET1 capital ratio.
GSI is also subject to the leverage ratio framework
established by the PRA. This framework sets the minimum
leverage ratio requirement at 3.25% that will apply to GSI
from January 1, 2023. GSI had a leverage ratio of 4.2% asof December 2021 and 4.7% as of December 2020. The
leverage ratio as of December 2021 reflected GSI’s profits
after foreseeable charges for the three months ended
December 2021 (which will not be finalized until
verification by GSI’s external auditors and approval by
GSI’s Board of Directors for inclusion in risk-based capital).
These profits contributed approximately 7 basis points tothe leverage ratio.
GSI is a registered swap dealer with the CFTC and,beginning in the fourth quarter of 2021, also became aregistered security-based swap dealer with the SEC. As of
December 2021, GSI was subject to and in compliance withapplicable capital requirements for swap dealers andsecurity-based swap dealers.
GSI is also subject to a minimum requirement for own
funds and eligible liabilities issued to affiliates. Thisrequirement is subject to a transitional period which beganto phase in from January 2019 and became fully effective
beginning in January 2022. As of both December 2021 andDecember 2020, GSI was in compliance with thisrequirement.
GSJCL, our Japanese broker-dealer, is regulated by Japan’s
Financial Services Agency. GSJCL and certain othernon-U.S. subsidiaries are also subject to capitalrequirements promulgated by authorities of the countries inwhich they operate. As of both December 2021 andDecember 2020, these subsidiaries were in compliance with
their local capital requirements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Regulatory and Other Matters
Regulatory Matters
Our businesses are subject to extensive regulation andsupervision worldwide. Regulations have been adopted orare being considered by regulators and policy makers
worldwide. Given that many of the new and proposed rules
are highly complex, the full impact of regulatory reform
will not be known until the rules are implemented andmarket practices develop under the final regulations.
See “Business — Regulation” in Part I, Item 1 of thisForm 10-K for further information about the laws, rules
and regulations and proposed laws, rules and regulations
that apply to us and our operations.
Other Matters
Replacement of Interbank Offered Rates (IBORs),
including LIBOR. On January 1, 2022, the publication of
all EUR, CHF, JPY and GBP LIBOR (non-USD LIBOR)
settings along with certain USD LIBOR settings ceased. The
publication of the most commonly used USD LIBOR
settings will cease after June 2023. The FCA has allowed
the publication and use of synthetic rates for certain GBP
and JPY LIBOR settings in legacy GBP or JPY LIBORbased derivative contracts through December 2022. The
U.S. federal banking agencies’ guidance strongly
encourages banking organizations to cease using USD
LIBOR.
The International Swaps and Derivatives Association(ISDA) 2020 IBOR Fallbacks Protocol (IBOR Protocol) has
provided derivatives market participants with amended
fallbacks for legacy and new derivative contracts tomitigate legal or economic uncertainty. Both counterparties
have to adhere to the IBOR Protocol or engage in bilateralamendments for the terms to be effective for derivative
contracts. ISDA confirmed that the FCA’s formal
announcement in March 2021 fixed the spread adjustment
for all LIBOR rates and that fallbacks will automaticallyoccur for outstanding derivative contracts that incorporate
the relevant terms. In April 2021, the State of New Yorkapproved legislation intended to minimize legal andeconomic uncertainty for contracts that are governed by
New York law and have no fallback provisions or havefallback provisions that are based on USD LIBOR by
providing a statutory framework to replace USD LIBOR
with a benchmark rate based on the Secured Overnight
Financing Rate (SOFR).
We have facilitated an orderly transition from non-USD
LIBORs to alternative risk-free reference rates for us andour clients and continue to make progress on our transition
program as it relates to USD LIBOR.

Our non-USD LIBOR risk exposure was substantially all inconnection
withderivative
contracts.
Asof
December 2021, substantially all of our non-USD LIBORbased derivative contracts were with central clearing
counterparties or exchanges which had incorporated
fallbacks consistent with the IBOR Protocol in theirrulebooks or were under bilateral agreements subject to the
IBOR Protocol. The remainder were converted to synthetic
rates as permitted by the FCA. The notional amount ofderivatives converted to synthetic rates was not material.
Our risk exposure to USD LIBOR is primarily inconnection with our derivative contracts and to a lesser
extent our unsecured debt, preferred stock and loan
portfolio. As of December 2021, the notional amount of
our USD LIBOR-based derivative contracts wasapproximately $10.0 trillion, of which approximately$5.5 trillion will mature after June 2023 based on theircontractual terms. A majority of such derivative contracts
are with counterparties under bilateral agreements subject
to the IBOR Protocol, or with central clearing
counterparties or exchanges which have incorporated
fallbacks consistent with the IBOR Protocol in theirrulebooks and have announced that they plan to convert
USD LIBOR contracts to alternative risk-free reference
rates. Our benchmark unsecured debt and preferred stockwith USD LIBOR exposure was approximately$34.5 billion as of December 2021, of which $29.4 billion
will contractually mature after June 2023 or is perpetualand has no stated maturity date. A large portion of suchdebt and preferred stock represents our fixed-to-floating
rate instruments, currently in the fixed-rate period, withcall options before the LIBOR exposure begins. We
continue to monitor industry and legislative developments
as they relate to unsecured debt and preferred stock andwill take actions designed to facilitate an orderly transition.
In addition, we are also engaging with our clients in orderto remediate our loan agreements through bilateralamendments.
We have also issued debt and deposits linked to SOFR andSterling Overnight Index Average (SONIA) and executed
SOFR- and SONIA-based derivative contracts to makemarkets and facilitate client activities. When appropriate,
we continue to execute transactions in the market to reduce
our USD LIBOR exposures arising from hedges to our
fixed-rate debt issuances and replace them with alternativerisk-free reference rate exposures.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Our LIBOR transition program continues to make progresswith a focus on:‰ Evaluating and monitoring the impacts of USD LIBOR
settings across our businesses, including transactions andproducts;‰ Ensuring that legacy financial instruments and contracts
that continue to be impacted by the transition alreadycontain appropriate fallback language or are being
amended, either through bilateral negotiation or using
industry-wide tools, such as protocols;‰ Enhancements to infrastructure (for example, models andsystems) to prepare for a smooth transition from USD
LIBOR to alternative risk-free reference rates;‰ Ensuring operational readiness to offer and support
various alternative risk-free reference rate products;‰ Active participation in central bank and sector working
groups, including responding to industry consultations;and‰ Client education and communication.
Impact of COVID-19 Pandemic. Infection rates in many
parts of the world spiked toward the end of 2021 and into
early 2022, as the highly transmissible Omicron variant
emerged in the fourth quarter and spread rapidly, while theDelta variant also remained a concern. The surge of
infections has led to a renewed emphasis globally on safetymeasures and restrictions, as well as a greater sense ofurgency regarding the distribution of vaccines and vaccine
boosters, and has created a greater degree of uncertainty
regarding the prospects for economic growth in 2022.

We have continued to successfully execute on our BCP
strategy since initially activating it in the first quarter of2020 in response to the emergence of the COVID-19
pandemic. Our priority has been to safeguard our
employees and to seek to ensure continuity of business
operations on behalf of our clients. Our business continuity
response to the COVID-19 pandemic is managed by acentral team, which is led by our chief administrative officer
and chief medical officer, and includes senior management
within Risk and the chief operating officers across all
regions and businesses. We remain focused on ensuring that
our employees are able to safely work from our offices,where circumstances permit. During 2021, we madesubstantial progress in facilitating the safe return of
employees to our offices and employees in a number of our
locations around the world returned to the office to varying
degrees. Given that the situation regarding COVID-19 is
fluid and varies geographically, our approach totransitioning back to the office is flexible and evolves as the
specific conditions and requirements of each location
change. For instance, in light of the rapid spread of theOmicron variant late in 2021, we took the step of having
the vast majority of employees in the U.S., the U.K. and insome of our other locations work remotely at the outset of2022.
Our systems and infrastructure have been robust
throughout the COVID-19 pandemic, enabling us to
conduct our activities without disruption. Communication
throughout our organization has remained active during
the pandemic and our risk management processes havecontinued to operate in a rigorous and disciplined manner.
We maintained high liquidity levels during 2021, as our
GCLA averaged $335 billion for the year. We havecontinued to access our traditional funding sources in thenormal course and service our debt and other obligations
on a timely basis. See “Balance Sheet and Funding Sources”
and “Risk Management — Liquidity Risk Management”
for further information.
Accounting estimates, particularly those made inconnection with determining the allowance for credit losses
and the fair value of certain level 3 assets, are sensitive toassumptions regarding future economic conditions.
Predicting the trajectory of the economic recovery is highly
judgmental given the uncertainty as to how the pandemic
will evolve, as it will largely depend on the duration of theOmicron wave, the possible emergence of other variants
and further progress in the distribution of vaccines andvaccine boosters.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
In general, the market backdrop continued to beconstructive during 2021 and activity levels remained solid.
Volatility increased toward the end of the year as a result of
the spike in infections, while accelerating inflation, driven
by supply chain disruptions and labor shortages, and more
moderated growth expectations, were key macroeconomic
considerations heading into 2022. We continued to deploy
our balance sheet to intermediate risk and to support theneeds of clients. We have maintained our proactive
approach to managing market risk levels, which entails
ongoing review and monitoring of exposures and focusing
on ways to mitigate risk. As the economic recovery
progressed in 2021, credit risk continued to abate from thelow point of the pandemic. However, we continue toclosely monitor those industries that have been most
severely challenged by the pandemic.

Off-Balance Sheet Arrangements

While the global economy continued on the path torecovery during 2021, it is vulnerable to the risk that the
Omicron variant, or other possible variants, could impede
the recovery going forward by precipitating adverse
economic consequences, such as a softening in consumer
and business confidence and spending, a worsening of
supply chain constraints, and an intensification of
inflationary pressures. If the future effects of the pandemic
were to lead to a sustained period of economic weakness,our businesses would be negatively impacted. This would
have a negative impact on factors that are important to ouroperating performance, such as the level of client activity,
creditworthiness of counterparties and borrowers, and theamount of our AUS. We will continue to closely monitor
the rollout of vaccines across regions, as well as the impact
of new variants of the virus, and will take further actions, asnecessary, in order to best serve the interests of ouremployees, clients and counterparties. For further
information about the risks associated with the COVID-19
pandemic, see “Risk Factors” in Part I, Item 1A of thisForm 10-K.

‰ Providing guarantees, indemnifications, commitments,
letters of credit and representations and warranties.

In the ordinary course of business, we enter into various
types of off-balance sheet arrangements. Our involvementin these arrangements can take many different forms,
including:‰ Purchasing or retaining residual and other interests inspecial purpose entities, such as mortgage-backed andother asset-backed securitization vehicles;‰ Holding senior and subordinated debt, interests in limited
and general partnerships, and preferred and common
stock in other nonconsolidated vehicles;‰ Entering into interest rate, foreign currency, equity,commodity and credit derivatives, including total returnswaps; andWe enter into these arrangements for a variety of businesspurposes, including securitizations. The securitization
vehicles that purchase mortgages, corporate bonds andother types of financial assets are critical to the functioningof several significant investor markets, including the
mortgage-backed and other asset-backed securities
markets, since they offer investors access to specific cash
flows and risks created through the securitization process.
We also enter into these arrangements to underwrite client
securitization transactions; provide secondary market
liquidity; make investments in performing andnonperforming debt, distressed loans, power-related assets,
equity securities, real estate and other assets; and provide
investors with credit-linked and asset-repackaged notes.
The table below presents where information about ourvarious off-balance sheet arrangements may be found in
this Form 10-K. In addition, see Note 3 to the consolidated
financial statements for information about ourconsolidation policies.
Off-Balance Sheet Arrangement

Disclosure in Form 10-K

Variable interests and otherobligations, including contingent
obligations, arising from variableinterests in nonconsolidated
variable interest entities (VIEs)

See Note 17 to the consolidated
financial statements.

Guarantees, and lending and othercommitments

See Note 18 to the consolidated
financial statements.

Derivatives

See “Risk Management — Credit
Risk Management — Credit
Exposures — OTC Derivatives”
and Notes 4, 5, 7 and 18 to theconsolidated financial statements.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Risk Management
Risks are inherent in our businesses and include liquidity,
market, credit, operational, model, legal, compliance,
conduct, regulatory and reputational risks. Our risks
include the risks across our risk categories, regions or global
businesses, as well as those which have uncertain outcomes
and have the potential to materially impact our financial
results, our liquidity and our reputation. For further
information about our risk management processes, see“Overview and Structure of Risk Management,” and for
information about our areas of risk, see “Liquidity Risk
Management,” “Market Risk Management,” “Credit Risk
Management,” “Operational Risk Management” and“Model Risk Management” and “Risk Factors” in Part I,
Item 1A of this Form 10-K.

Overview and Structure of Risk Management
Overview
We believe that effective risk management is critical to our
success. Accordingly, we have established an enterprise risk
management framework that employs a comprehensive,
integrated approach to risk management, and is designed toenable comprehensive risk management processes throughwhich we identify, assess, monitor and manage the risks weassume in conducting our activities. Our risk management
structure is built around three core components:
governance, processes and people.
Governance. Risk management governance starts with theBoard, which both directly and through its committees,
including its Risk Committee, oversees our risk
management policies and practices implemented throughthe enterprise risk management framework. The Board isalso responsible for the annual review and approval of ourrisk appetite statement. The risk appetite statement
describes the levels and types of risk we are willing to accept
or to avoid, in order to achieve our objectives included inour strategic business plan, while remaining in compliancewith regulatory requirements. The Board reviews our
strategic business plan and is ultimately responsible foroverseeing and providing direction about our strategy andrisk appetite.

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The Board receives regular briefings on firmwide risks,
including liquidity risk, market risk, credit risk, operationalrisk and model risk, from our independent risk oversightand control functions, including the chief risk officer, andon compliance risk and conduct risk from Compliance, on
legal and regulatory enforcement matters from the chief
legal officer, and on other matters impacting our reputationfrom the chair of our Firmwide Client and BusinessStandards Committee and our Firmwide Reputational Risk
Committee. The chief risk officer reports to our chief
executive officer and to the Risk Committee of the Board.
As part of the review of the firmwide risk portfolio, thechief risk officer regularly advises the Risk Committee of
the Board of relevant risk metrics and material exposures,
including risk limits and thresholds established in our risk
appetite statement.
The implementation of our risk governance structure andcore risk management processes are overseen by EnterpriseRisk, which reports to our chief risk officer, and is
responsible for ensuring that our enterprise risk
management framework provides the Board, our risk
committees and senior management with a consistent andintegrated approach to managing our various risks in amanner consistent with our risk appetite.
Our revenue-producing units, as well as Treasury,
Engineering, Human Capital Management, Operations,and Corporate and Workplace Solutions, are considered
our first line of defense. They are accountable for theoutcomes of our risk-generating activities, as well as forassessing and managing those risks within our risk appetite.
Our independent risk oversight and control functions are
considered our second line of defense and provide
independent assessment, oversight and challenge of therisks taken by our first line of defense, as well as lead andparticipate in risk committees. Independent risk oversightand control functions include Compliance, Conflicts
Resolution, Controllers, Legal, Risk and Tax.
Internal Audit is considered our third line of defense, andour director of Internal Audit reports to the Audit
Committee of the Board and administratively to our chief
executive officer. Internal Audit includes professionals witha broad range of audit and industry experience, including
risk management expertise. Internal Audit is responsible forindependently assessing and validating the effectiveness of
key controls, including those within the risk management
framework, and providing timely reporting to the Audit
Committee of the Board, senior management andregulators.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The three lines of defense structure promotes theaccountability of first line risk takers, provides aframework for effective challenge by the second line andempowers independent review from the third line.
Processes. We maintain various processes that are criticalcomponents of our risk management framework, including(i) risk identification and assessment, (ii) risk appetite, limit
and threshold setting, (iii) risk reporting and monitoring,and (iv) risk decision-making.
‰ Risk Identification and Assessment. We believe thatthe identification and assessment of our risks is a criticalstep in providing our Board and senior managementtransparency and insight into the range and materiality of
our risks. We have a comprehensive data collection
process, including firmwide policies and procedures that
require all employees to report and escalate risk events.
Our approach for risk identification and assessment iscomprehensive across all risk types, is dynamic andforward-looking to reflect and adapt to our changing risk
profile and business environment, leverages subject
matter expertise, and allows for prioritization of our mostcritical risks.
To effectively assess our risks, we maintain a daily
discipline of marking substantially all of our inventory tocurrent market levels. We carry our inventory at fairvalue, with changes in valuation reflected immediately in
our risk management systems and in net revenues. We doso because we believe this discipline is one of the mosteffective tools for assessing and managing risk and that itprovides transparent and realistic insight into ourinventory exposures.
An important part of our risk management process isfirmwide stress testing. It allows us to quantify our
exposure to tail risks, highlight potential loss
concentrations, undertake risk/reward analysis, andassess and mitigate our risk positions. Firmwide stresstests are performed on a regular basis and are designed toensure a comprehensive analysis of our vulnerabilities
and idiosyncratic risks combining financial andnonfinancial risks, including, but not limited to, credit,
market, liquidity and funding, operational andcompliance, strategic, systemic and emerging risks into asingle combined scenario. We also perform ad hoc stresstests in anticipation of market events or conditions. Stresstests are also used to assess capital adequacy as part ofour capital planning and stress testing process. See“Capital Management and Regulatory Capital — CapitalManagement” for further information.

‰ Risk Appetite, Limit and Threshold Setting. We apply
a rigorous framework of limits and thresholds to control
and monitor risk across transactions, products,
businesses and markets. The Board, directly or indirectly
through its Risk Committee, approves limits andthresholds included in our risk appetite statement at
firmwide, business and product levels. In addition, theFirmwide Enterprise Risk Committee is responsible forapproving our risk limits framework, subject to theoverall limits approved by the Risk Committee of theBoard, and monitoring these limits.
The Risk Governance Committee is responsible forapproving limits at firmwide, business and product levels.
Certain limits may be set at levels that will require
periodic adjustment, rather than at levels that reflect our
maximum risk appetite. This fosters an ongoing dialogue
about risk among our first and second lines of defense,
committees and senior management, as well as rapid
escalation of risk-related matters. Additionally, throughdelegated authority from the Risk GovernanceCommittee, Market Risk sets limits at certain productand desk levels, and Credit Risk sets limits for individual
counterparties, counterparties and their subsidiaries,
industries and countries. Limits are reviewed regularly
and amended on a permanent or temporary basis toreflect changing market conditions, business conditions
or risk tolerance.
‰ Risk Reporting and Monitoring. Effective risk
reporting and risk decision-making depends on ourability to get the right information to the right people atthe right time. As such, we focus on the rigor andeffectiveness of our risk systems, with the objective ofensuring that our risk management technology systems
provide us with complete, accurate and timely
information. Our risk reporting and monitoring processes
are designed to take into account information about both
existing and emerging risks, thereby enabling our risk
committees and senior management to perform their
responsibilities with the appropriate level of insight intorisk exposures. Furthermore, our limit and thresholdbreach processes provide means for timely escalation. We
evaluate changes in our risk profile and our businesses,
including changes in business mix or jurisdictions inwhich we operate, by monitoring risk factors at a
firmwide level.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis‰ Risk Decision-Making. Our governance structure
provides the protocol and responsibility fordecision-making on risk management issues and ensures
implementation of those decisions. We make extensive
use of risk committees that meet regularly and serve as animportant means to facilitate and foster ongoing
discussions to manage and mitigate risks.
We maintain strong and proactive communication aboutrisk and we have a culture of collaboration in decisionmaking among our first and second lines of defense,
committees and senior management. While our first lineof defense is responsible for management of their risk, we
dedicate extensive resources to our second line of defense
in order to ensure a strong oversight structure and an
appropriate segregation of duties. We regularly reinforce
our strong culture of escalation and accountability acrossall functions.
People. Even the best technology serves only as a tool for
helping to make informed decisions in real time about therisks we are taking. Ultimately, effective risk management
requires our people to interpret our risk data on an ongoing
and timely basis and adjust risk positions accordingly. The
experience of our professionals, and their understanding of
the nuances and limitations of each risk measure, guides us
in assessing exposures and maintaining them within
prudent levels.
We reinforce a culture of effective risk management,
consistent with our risk appetite, in our training anddevelopment programs, as well as in the way we evaluate
performance, and recognize and reward our people. Our
training and development programs, including certain
sessions led by our most senior leaders, are focused on theimportance of risk management, client relationships andreputational excellence. As part of our performance review
process, we assess reputational excellence, including how
an employee exercises good risk management andreputational judgment, and adheres to our code of conductand compliance policies. Our review and reward processes
are designed to communicate and reinforce to our
professionals the link between behavior and how people arerecognized, the need to focus on our clients and our
reputation, and the need to always act in accordance with
our highest standards.

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Structure
Ultimate oversight of risk is the responsibility of our Board.
The Board oversees risk both directly and through its
committees, including its Risk Committee. We have a seriesof committees with specific risk management mandates thathave oversight or decision-making responsibilities for risk
management activities. Committee membership generally
consists of senior managers from both our first and secondlines of defense. We have established procedures for thesecommittees to ensure that appropriate information barriers
are in place. Our primary risk committees, most of which
also have additional sub-committees, councils or working
groups, are described below. In addition to thesecommittees, we have other risk committees that provide
oversight for different businesses, activities, products,
regions and entities. All of our committees have
responsibility for considering the impact on our reputationof the transactions and activities that they oversee.
Membership of our risk committees is reviewed regularly
and updated to reflect changes in the responsibilities of thecommittee members. Accordingly, the length of time thatmembers serve on the respective committees varies as
determined by the committee chairs and based on the
responsibilities of the members.
The chart below presents an overview of our risk
management governance structure.
Corporate Oversight
Board of Directors
Board Commiees
Senior Management OversightChief Execuve Oﬃcer
President/Chief Operang Oﬃcer
Chief Financial Oﬃcer
Director ofInternal Audit
Firmwide Enterprise Risk
CommieeCommiee OversightManagement Commiee
Firmwide Client and BusinessStandards Commiee

Chief Risk Oﬃcer
Firmwide Asset Liability
Commiee

Management Committee. The Management Committee
oversees our global activities. It provides this oversightdirectly and through authority delegated to committees it
has established. This committee consists of our most seniorleaders, and is chaired by our chief executive officer. Most
members of the Management Committee are also membersof other committees. The following are the committees thatare principally involved in firmwide risk management.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Firmwide Enterprise Risk Committee. The Firmwide
Enterprise Risk Committee is responsible for overseeing allof our financial and nonfinancial risks. As part of suchoversight, the committee is responsible for the ongoing
review, approval and monitoring of our enterprise risk
management framework, as well as our risk limits
framework. This committee is co-chaired by our chief
financial officer and our chief risk officer, who areappointed as chairs by our chief executive officer, andreports to the Management Committee. The following are
the primary committees or councils that report to the
Firmwide Enterprise Risk Committee:‰ Firmwide Conduct Committee. The Firmwide
Conduct Committee is responsible for the ongoingapproval and monitoring of the frameworks and policies
which govern our conduct risks. Conduct risk is the riskthat our people fail to act in a manner consistent with ourBusiness Principles and related core values, policies orcodes, or applicable laws or regulations, thereby fallingshort in fulfilling their responsibilities to us, our clients,
colleagues, other market participants or the broader
community. This committee is chaired by our chief legal
officer, who is appointed as chair by the chairs of the
Firmwide Enterprise Risk Committee.

‰ Firmwide Risk Council. The Firmwide Risk Council is
responsible for the ongoing monitoring of relevant
financial risks and related risk limits at the firmwide,business and product levels. This council is co-chaired by
the chairs of the Firmwide Enterprise Risk Committee.

‰ Risk Governance Committee. The Risk GovernanceCommittee (through delegated authority from the
Firmwide Enterprise Risk Committee) is responsible forthe ongoing approval and monitoring of risk frameworks,
policies and parameters related to our core risk
management processes, as well as limits, at firmwide,business and product levels. In addition, this committee
reviews the results of stress tests and scenario analyses. To
assist the Risk Governance Committee in carrying out its
mandate, a number of other risk committees withdedicated oversight for stress testing, model risks andVolcker Rule compliance report into the Risk
Governance Committee. This committee is chaired by ourchief risk officer, who is appointed as chair by the chairsof the Firmwide Enterprise Risk Committee.

‰ Firmwide New Activity Committee. The Firmwide
New Activity Committee is responsible for reviewing newactivities and for establishing a process to identify andreview previously approved activities that are significant
and that have changed in complexity and/or structure orpresent different reputational and suitability concerns
over time to consider whether these activities remain
appropriate. This committee is co-chaired by thecontroller and chief accounting officer, and our chief
administrative officer, who are appointed as chairs by thechairs of the Firmwide Enterprise Risk Committee.
‰ Firmwide Operational Risk and Resilience
Committee. The Firmwide Operational Risk andResilience Committee is responsible for overseeing
operational risk, and for ensuring our business andoperational resilience. To assist the Firmwide
Operational Risk and Resilience Committee in carryingout its mandate, other risk committees with dedicatedoversight for technology-related risks, including cybersecurity matters, report into the Firmwide Operational
Risk and Resilience Committee. This committee isco-chaired by our chief administrative officer and thehead of Operational Risk, who are appointed as chairs by
the chairs of the Firmwide Enterprise Risk Committee.

Firmwide Client and Business Standards Committee.
The Firmwide Client and Business Standards Committee is
responsible for overseeing relationships with our clients,
client service and experience, and related businessstandards, as well as client-related reputational matters.
This committee is chaired by our president and chief
operating officer, who is appointed as chair by the chief
executive officer, and reports to the Management
Committee. This committee periodically provides updates
to, and receives guidance from, the Public Responsibilities
Committee of the Board.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The following committees report jointly to the Firmwide
Enterprise Risk Committee and the Firmwide Client andBusiness Standards Committee:‰ Firmwide Reputational Risk Committee. The
Firmwide Reputational Risk Committee is responsible forassessing reputational risks arising from transactions thathave been identified as having potential heightened
reputational risk pursuant to the criteria established by
the Firmwide Reputational Risk Committee and as
determined by committee leadership. This committee ischaired by our president and chief operating officer, who
is appointed as chair by the chief executive officer, andthe vice-chairs are our chief legal officer and the former
chair of Conflicts Resolution (now a senior advisor to thefirm), who are appointed as vice-chairs by the chair of the
Firmwide Reputational Risk Committee. This committee
periodically provides updates to, and receives guidance
from, the Public Responsibilities Committee of the Board.
‰ Firmwide Suitability Committee. The Firmwide
Suitability Committee is responsible for setting standards
and policies for product, transaction and client suitability
and providing a forum for consistency across functions,regions and products on suitability assessments. This
committee also reviews suitability matters escalated fromother committees. This committee is co-chaired by ourchief compliance officer, and a co-head of EMEA FICC
sales, who are appointed as chairs by the chair of the
Firmwide Client and Business Standards Committee.
‰ Firmwide Investment Policy Committee. The
Firmwide Investment Policy Committee periodicallyreviews our investing and lending activities on a portfolio
basis, including review of risk management and controls,
and sets business standards and policies for these types ofinvestments. This committee is co-chaired by a co-head of
our Asset Management Division, a co-head of our Global
Markets Division and our chief risk officer, who areappointed as chairs by our president and chief operating
officer and our chief financial officer.
‰ Firmwide Capital Committee. The Firmwide CapitalCommittee provides approval and oversight of debtrelated transactions, including principal commitments ofour capital. This committee aims to ensure that business,
reputational and suitability standards for underwritingsand capital commitments are maintained on a global
basis. This committee is co-chaired by the head of Credit
Risk and the head of Americas Leveraged Finance, who
are appointed as chairs by the chairs of the Firmwide
Enterprise Risk Committee.

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Goldman Sachs 2021 Form 10-K

‰ Firmwide Commitments Committee. The Firmwide
Commitments Committee reviews our underwriting anddistribution activities with respect to equity and equityrelated product offerings, and sets and maintains policies
and procedures designed to ensure that legal,
reputational, regulatory and business standards aremaintained on a global basis. In addition to reviewing
specific transactions, this committee periodicallyconducts general strategic reviews of sectors and products
and establishes policies in connection with transaction
practices. This committee is co-chaired by the chief
underwriting officer for EMEA, the chief equity
underwriting officer for the Americas, a co-chairman of
the Global Financial Institutions Group and a co-head of
the Industrials Group in our Investment Banking
Division, who are appointed as chairs by the chair of the
Firmwide Client and Business Standards Committee.
Firmwide Asset Liability Committee. The Firmwide
Asset Liability Committee reviews and approves thestrategic direction for our financial resources, including
capital, liquidity, funding and balance sheet. This
committee has oversight responsibility for asset liability
management, including interest rate and currency risk,
funds transfer pricing, capital allocation and incentives, andcredit ratings. This committee makes recommendations as
to any adjustments to asset liability management andfinancial resource allocation in light of current events, risks,
exposures, and regulatory requirements and approves
related policies. This committee is co-chaired by our chief
financial officer and our global treasurer, who areappointed as chairs by our chief executive officer, andreports to the Management Committee.
Conflicts Management
Conflicts of interest and our approach to dealing with them
are fundamental to our client relationships, our reputationand our long-term success. The term “conflict of interest”
does not have a universally accepted meaning, and conflicts
can arise in many forms within a business or between
businesses. The responsibility for identifying potential
conflicts, as well as complying with our policies andprocedures, is shared by all of our employees.
We have a multilayered approach to resolving conflicts andaddressing reputational risk. Our senior management
oversees policies related to conflicts resolution and, in
conjunction with Conflicts Resolution, Legal andCompliance, the Firmwide Client and Business Standards
Committee, and other internal committees, formulates
policies, standards and principles, and assists in making
judgments regarding the appropriate resolution ofparticular conflicts. Resolving potential conflicts
necessarily depends on the facts and circumstances of aparticular situation and the application of experienced andinformed judgment.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
As a general matter, Conflicts Resolution reviews financing
and advisory assignments in Investment Banking andcertain of our investing, lending and other activities. In
addition, we have various transaction oversightcommittees, such as the Firmwide Capital, Commitments
and Suitability Committees and other committees that also
review new underwritings, loans, investments andstructured products. These groups and committees workwith internal and external counsel and Compliance toevaluate and address any actual or potential conflicts. The
head of Conflicts Resolution reports to our chief legal
officer, who reports to our chief executive officer.
We regularly assess our policies and procedures that
address conflicts of interest in an effort to conduct ourbusiness in accordance with the highest ethical standards
and in compliance with all applicable laws, rules andregulations.
Climate Risk Management
We categorize climate risk into physical risk and transition
risk. Physical risk is the risk that asset values may decline oroperations may be disrupted as a result of changes in the
climate, while transition risk is the risk that asset values
may decline because of changes in climate policies orchanges in the underlying economy due to decarbonization.
As a global financial institution, climate-related risks
manifest in different ways across our businesses and wehave continued to make significant enhancements to ourclimate risk management framework, including steps tofurther integrate climate into our broader risk management
processes. We have integrated oversight of climate-relatedrisks into our risk management governance structure, fromsenior management to our Board and its committees,
including the Risk and Public Responsibilities Committees.
The Risk Committee of the Board oversees firmwide
financial and nonfinancial risks, which include climate risk,
and, as part of its oversight, receives updates on our risk
management approach to climate risk, including ourapproaches towards scenario analysis and integration into
existing risk management processes. The Public
Responsibilities Committee of the Board assists the Board
in its oversight of our firmwide sustainability strategy andsustainability issues affecting us, including with respect toclimate change. As part of its oversight, the Public
Responsibilities Committee receives periodic updates on
our sustainability strategy, and also periodically reviews
our governance and related policies and processes forsustainability and climate change-related risks. Senior
management within Risk is responsible for the developmentof our climate risk program.

We have begun incorporating climate risk into our credit
evaluation and underwriting processes for select industries.
Climate risk factors are now evaluated as part oftransaction due diligence for select loan commitments.
See “Business — Sustainability” in Part I, Item 1 and “Risk
Factors” in Part I, Item 1A of this Form 10-K for
information about our sustainability initiatives, including
in relation to climate transition.
Compliance Risk Management
Compliance risk is the risk of legal or regulatory sanctions,material financial loss or damage to our reputation arisingfrom our failure to comply with the requirements ofapplicable laws, rules and regulations, and our internal
policies and procedures. Compliance risk is inherent in all
activities through which we conduct our businesses. Our
Compliance Risk Management Program, administered byCompliance, assesses our compliance, regulatory andreputational risk; monitors for compliance with new oramended laws, rules and regulations; designs andimplements controls, policies, procedures and training;
conducts independent testing; investigates, surveils andmonitors for compliance risks and breaches; and leads our
responses to regulatory examinations, audits and inquiries.
We monitor and review business practices to assess whether
they meet or exceed minimum regulatory and legal
standards in all markets and jurisdictions in which we
conduct business.
Capital Risk Management
Capital risk is the risk that our capital is insufficient tosupport our business activities under normal and stressedmarket conditions or we face capital reductions or RWA
increases, including from new or revised rules or changes ininterpretations of existing rules, and are therefore unable tomeet our internal capital targets or external regulatory
capital requirements. Capital adequacy is of criticalimportance to us. Accordingly, we have in place acomprehensive capital management policy that provides aframework, defines objectives and establishes guidelines tomaintain an appropriate level and composition of capital inboth business-as-usual and stressed conditions. Our capitalmanagement framework is designed to provide us with theinformation needed to comprehensively manage risk, anddevelop and apply projected stress scenarios that capture
idiosyncratic vulnerabilities with a goal of holding
sufficient capital to remain adequately capitalized evenafter experiencing a severe stress event. See “CapitalManagement and Regulatory Capital” for further
information about our capital management process.

Goldman Sachs 2021 Form 10-K

95

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
We have established a comprehensive governance structure
to manage and oversee our day-to-day capital management
activities and compliance with capital rules and related
policies. Our capital management activities are overseen by
the Board and its committees. The Board is responsible forapproving our annual capital plan and the Risk Committeeof the Board approves our capital management policy. In
addition, committees and members of senior management
are responsible for the ongoing monitoring of our capital
adequacy and evaluate current and future regulatory capitalrequirements, review the results of our capital planning andstress tests processes, and the results of our capital models,review our contingency capital plan, key capital adequacy
metrics, including regulatory capital ratios, as well as
capital plan metrics, such as the payout ratio, outcomes andfindings of calculation testing, and monitor capital risk
limits and breaches.
Our process for managing capital risk also includes
independent review functions in Risk that, among otherthings, assess regulatory capital policies and related
interpretations, escalate certain interpretations to senior
management and/or the appropriate risk committee, andperform calculation testing to corroborate alignment withapplicable capital rules.

Liquidity Risk Management
Overview
Liquidity risk is the risk that we will be unable to fundourselves or meet our liquidity needs in the event of firmspecific, broader industry or market liquidity stress events.
We have in place a comprehensive and conservative set of
liquidity and funding policies. Our principal objective is tobe able to fund ourselves and to enable our core businesses
to continue to serve clients and generate revenues, evenunder adverse circumstances.
Treasury, which reports to our chief financial officer, has
primary responsibility for developing, managing andexecuting our liquidity and funding strategy within our risk
appetite.
Liquidity Risk, which is independent of our revenueproducing units and Treasury, and reports to our chief risk
officer, has primary responsibility for assessing, monitoringand managing our liquidity risk through firmwide oversightacross our global businesses and the establishment of stresstesting and limits frameworks.

96Goldman Sachs 2021 Form 10-K

Liquidity Risk Management Principles
We manage liquidity risk according to three principles:(i) hold sufficient excess liquidity in the form of GCLA tocover outflows during a stressed period, (ii) maintainappropriate Asset-Liability Management and (iii) maintaina viable Contingency Funding Plan.
GCLA. GCLA is liquidity that we maintain to meet a broad
range of potential cash outflows and collateral needs in a
stressed environment. A primary liquidity principle is topre-fund our estimated potential cash and collateral needs
during a liquidity crisis and hold this liquidity in the form of
unencumbered, highly liquid securities and cash. We believethat the securities held in our GCLA would be readily
convertible to cash in a matter of days, through liquidation,by entering into repurchase agreements or from maturities ofresale agreements, and that this cash would allow us to meet
immediate obligations without needing to sell other assets ordepend on additional funding from credit-sensitive markets.
Our GCLA reflects the following principles:‰ The first days or weeks of a liquidity crisis are the mostcritical to a company’s survival;‰ Focus must be maintained on all potential cash andcollateral outflows, not just disruptions to financing
flows. Our businesses are diverse, and our liquidity needs
are determined by many factors, including market
movements, collateral requirements and client
commitments, all of which can change dramatically in adifficult funding environment;‰ During a liquidity crisis, credit-sensitive funding,including unsecured debt, certain deposits and some typesof secured financing agreements, may be unavailable, andthe terms (e.g., interest rates, collateral provisions andtenor) or availability of other types of secured financing
may change and certain deposits may be withdrawn; and‰ As a result of our policy to pre-fund liquidity that we
estimate may be needed in a crisis, we hold more
unencumbered securities and have larger fundingbalances than our businesses would otherwise require.
We believe that our liquidity is stronger with greaterbalances of highly liquid unencumbered securities, eventhough it increases our total assets and our funding costs.
We maintain our GCLA across Group Inc., Goldman Sachs
Funding LLC (Funding IHC) and Group Inc.’s major
broker-dealer and bank subsidiaries, asset types andclearing agents to provide us with sufficient operating
liquidity to ensure timely settlement in all major markets,
even in a difficult funding environment. In addition to the
GCLA, we maintain cash balances and securities in severalof our other entities, primarily for use in specific currencies,
entities or jurisdictions where we do not have immediate
access to parent company liquidity.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Asset-Liability Management. Our liquidity risk
management policies are designed to ensure we have asufficient amount of financing, even when funding markets
experience persistent stress. We manage the maturities anddiversity of our funding across markets, products andcounterparties, and seek to maintain a diversified funding
profile with an appropriate tenor, taking into consideration
the characteristics and liquidity profile of our assets.
Our approach to asset-liability management includes:‰ Conservatively managing the overall characteristics of
our funding book, with a focus on maintaining long-term,
diversified sources of funding in excess of our current
requirements. See “Balance Sheet and Funding Sources —Funding Sources” for further information;‰ Actively managing and monitoring our asset base, withparticular focus on the liquidity, holding period andability to fund assets on a secured basis. We assess ourfunding requirements and our ability to liquidate assets ina stressed environment while appropriately managing
risk. This enables us to determine the most appropriate
funding products and tenors. See “Balance Sheet andFunding Sources — Balance Sheet Management” forfurther information about our balance sheet management
process and “— Funding Sources — Secured Funding”
for further information about asset classes that may beharder to fund on a secured basis; and‰ Raising secured and unsecured financing that has a longtenor relative to the liquidity profile of our assets. This
reduces the risk that our liabilities will come due inadvance of our ability to generate liquidity from the saleof our assets. Because we maintain a highly liquid balance
sheet, the holding period of certain of our assets may bematerially shorter than their contractual maturity dates.
Our goal is to ensure that we maintain sufficient liquidity tofund our assets and meet our contractual and contingent
obligations in normal times, as well as during periods ofmarket stress. Through our dynamic balance sheet
management process, we use actual and projected asset
balances to determine secured and unsecured funding
requirements. Funding plans are reviewed and approved by
the Firmwide Asset Liability Committee. In addition, our
independent risk oversight and control functions analyze,
and the Firmwide Asset Liability Committee reviews, ourconsolidated total capital position (unsecured long-termborrowings plus total shareholders’ equity) so that we
maintain a level of long-term funding that is sufficient tomeet our long-term financing requirements. In a liquidity
crisis, we would first use our GCLA in order to avoid
reliance on asset sales (other than our GCLA). However, we
recognize that orderly asset sales may be prudent ornecessary in a severe or persistent liquidity crisis.

Subsidiary Funding Policies
The majority of our unsecured funding is raised by Group
Inc., which provides the necessary funds to Funding IHC
and other subsidiaries, some of which are regulated, to meettheir asset financing, liquidity and capital requirements. In
addition, Group Inc. provides its regulated subsidiaries
with the necessary capital to meet their regulatory
requirements. The benefits of this approach to subsidiaryfunding are enhanced control and greater flexibility to meetthe funding requirements of our subsidiaries. Funding is
also raised at the subsidiary level through a variety of
products, including deposits, secured funding andunsecured borrowings.
Our intercompany funding policies assume that a
subsidiary’s funds or securities are not freely available to its
parent, Funding IHC or other subsidiaries unless (i) legallyprovided for and (ii) there are no additional regulatory, tax
or other restrictions. In particular, many of our subsidiaries
are subject to laws that authorize regulatory bodies to blockor reduce the flow of funds from those subsidiaries toGroup Inc. or Funding IHC. Regulatory action of that kind
could impede access to funds that Group Inc. needs to makepayments on its obligations. Accordingly, we assume thatthe capital provided to our regulated subsidiaries is notavailable to Group Inc. or other subsidiaries and any otherfinancing provided to our regulated subsidiaries is notavailable to Group Inc. or Funding IHC until the maturityof such financing.
Group Inc. has provided substantial amounts of equity andsubordinated indebtedness, directly or indirectly, to its
regulated subsidiaries. For example, as of December 2021,
Group Inc. had $38.08 billion of equity and subordinatedindebtedness invested in GS&Co., its principal U.S.
registered broker-dealer; $44.44 billion invested in GSI, aregulated U.K. broker-dealer; $2.50 billion invested in
GSJCL, a regulated Japanese broker-dealer; $46.17 billion
invested in GS Bank USA, a regulated New York Statechartered bank; and $4.28 billion invested in GSIB, aregulated U.K. bank. Group Inc. also provides financing,
directly or indirectly, in the form of: $95.74 billion of
unsubordinated loans (including secured loans of$41.91 billion) and $17.68 billion of collateral and cash
deposits to these entities as of December 2021. In addition,
as of December 2021, Group Inc. had significant amountsof capital invested in and loans to its other regulated
subsidiaries.

Goldman Sachs 2021 Form 10-K

97

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Contingency Funding Plan. We maintain a contingency
funding plan to provide a framework for analyzing andresponding to a liquidity crisis situation or periods ofmarket stress. Our contingency funding plan outlines a listof potential risk factors, key reports and metrics that are
reviewed on an ongoing basis to assist in assessing theseverity of, and managing through, a liquidity crisis and/or
market dislocation. The contingency funding plan also
describes in detail our potential responses if ourassessments indicate that we have entered a liquidity crisis,
which include pre-funding for what we estimate will be ourpotential cash and collateral needs, as well as utilizing
secondary sources of liquidity. Mitigants and action items
to address specific risks which may arise are also describedand assigned to individuals responsible for execution.
The contingency funding plan identifies key groups ofindividuals and their responsibilities, which include fostering
effective coordination, control and distribution of information,
implementing liquidity maintenance activities and managing
internal and external communication, all of which are criticalin the management of a crisis or period of market stress.
Stress Tests
In order to determine the appropriate size of our GCLA, we
model liquidity outflows over a range of scenarios and time
horizons. One of our primary internal liquidity risk models,referred to as the Modeled Liquidity Outflow, quantifies our
liquidity risks over a 30-day stress scenario. We also consider
other factors, including, but not limited to, an assessment ofour potential intraday liquidity needs through an additional
internal liquidity risk model, referred to as the Intraday
Liquidity Model, the results of our long-term stress testingmodels, our resolution liquidity models and other applicableregulatory requirements and a qualitative assessment of ourcondition, as well as the financial markets. The results of theModeled Liquidity Outflow, the Intraday Liquidity Model,
the long-term stress testing models and the resolution
liquidity models are reported to senior management on aregular basis. We also perform firmwide stress tests. See“Overview and Structure of Risk Management” for
information about firmwide stress tests.
Modeled Liquidity Outflow. Our Modeled Liquidity
Outflow is based on conducting multiple scenarios that
include combinations of market-wide and firm-specificstress. These scenarios are characterized by the following
qualitative elements:‰ Severely challenged market environments, which includes
low consumer and corporate confidence, financial andpolitical instability, and adverse changes in market values,
including potential declines in equity markets andwidening of credit spreads; and‰ A firm-specific crisis potentially triggered by material losses,
reputational damage, litigation and/or a ratings downgrade.
98

Goldman Sachs 2021 Form 10-K

The following are key modeling elements of our Modeled
Liquidity Outflow:‰ Liquidity needs over a 30-day scenario;‰ A two-notch downgrade of our long-term seniorunsecured credit ratings;‰ Changing conditions in funding markets, which limit ouraccess to unsecured and secured funding;‰ No support from additional government funding
facilities. Although we have access to various central bankfunding programs, we do not assume reliance on
additional sources of funding in a liquidity crisis; and‰ A combination of contractual outflows and contingent
outflows arising from both our on- and off-balance sheet
arrangements. Contractual outflows include, among
other things, upcoming maturities of unsecured debt,
term deposits and secured funding. Contingent outflows
include, among other things, the withdrawal of customer
credit balances in our prime brokerage business, increasein variation margin requirements due to adverse changes
in the value of our exchange-traded and OTC-cleared
derivatives, draws on unfunded commitments andwithdrawals of deposits that have no contractual
maturity. See notes to the consolidated financial
statements for further information about contractual
outflows, including Note 11 for collateralized financings,
Note 13 for deposits, Note 14 for unsecured long-termborrowings and Note 15 for operating lease payments,
and “Off-Balance Sheet Arrangements” for further
information about our various types of off-balance sheet
arrangements.
Intraday Liquidity Model. Our Intraday Liquidity Modelmeasures our intraday liquidity needs using a scenario
analysis characterized by the same qualitative elements as
our Modeled Liquidity Outflow. The model assesses therisk of increased intraday liquidity requirements during a
scenario where access to sources of intraday liquidity may
become constrained.
Long-Term Stress Testing. We utilize longer-term stresstests to take a forward view on our liquidity position
through prolonged stress periods in which we experience a
severe liquidity stress and recover in an environment that
continues to be challenging. We are focused on ensuringconservative asset-liability management to prepare for a
prolonged period of potential stress, seeking to maintain adiversified funding profile with an appropriate tenor,
taking into consideration the characteristics and liquidity
profile of our assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Resolution Liquidity Models. In connection with ourresolution planning efforts, we have established ourResolution Liquidity Adequacy and Positioning
framework, which estimates liquidity needs of our major
subsidiaries in a stressed environment. The liquidity needs
are measured using our Modeled Liquidity Outflow
assumptions and include certain additional inter-affiliate
exposures. We have also established our Resolution
Liquidity Execution Need framework, which measures theliquidity needs of our major subsidiaries to stabilize andwind-down following a Group Inc. bankruptcy filing inaccordance with our preferred resolution strategy.
In addition, we have established a triggers and alerts
framework, which is designed to provide the Board withinformation needed to make an informed decision onwhether and when to commence bankruptcy proceedingsfor Group Inc.
LimitsWe use liquidity risk limits at various levels and acrossliquidity risk types to manage the size of our liquidity
exposures. Limits are measured relative to acceptable levelsof risk given our liquidity risk tolerance. See “Overview andStructure of Risk Management” for information about thelimit approval process.
Limits are monitored by Treasury and Liquidity Risk.
Liquidity Risk is responsible for identifying and escalating
to senior management and/or the appropriate risk
committee, on a timely basis, instances where limits havebeen exceeded.
GCLA and Unencumbered Metrics
GCLA. Based on the results of our internal liquidity risk
models, described above, as well as our consideration ofother factors, including, but not limited to, a qualitative
assessment of our condition, as well as the financial
markets, we believe our liquidity position as of both
December 2021 and December 2020 was appropriate. We
strictly limit our GCLA to a narrowly defined list of
securities and cash because they are highly liquid, even in adifficult funding environment. We do not include otherpotential sources of excess liquidity in our GCLA, such asless liquid unencumbered securities or committed credit
facilities.

The table below presents information about our GCLA.
Average for theThree Months
Ended December$ in millions

Denomination
U.S. dollar
Non-U.S. dollar
Total

2021

2020

Year Ended
December
2021

2020

$230,720 $190,735 $217,797 $181,949
122,401 107,106 116,723 101,182$353,121 $297,841 $334,520 $283,131

Asset Class
Overnight cash deposits$188,223 $108,345 $173,000 $100,489
U.S. government obligations
107,898 125,060 108,260 113,531
U.S. agency obligations
13,154
7,059
10,183 12,017
Non-U.S. government obligations 43,846 57,377
43,077 57,094
Total$353,121 $297,841 $334,520 $283,131
Entity TypeGroup Inc. and Funding IHC$ 54,489 $ 36,737 $ 53,205 $ 41,705
Major broker-dealer subsidiaries 107,279 100,891 104,326 99,798
Major bank subsidiaries
191,353 160,213 176,989 141,628
Total$353,121 $297,841 $334,520 $283,131

In the table above:‰ The U.S. dollar-denominated GCLA consists of(i) unencumbered U.S. government and agency
obligations (including highly liquid U.S. agency
mortgage-backed obligations), all of which are eligible as
collateral in Federal Reserve open market operations and(ii) certain overnight U.S. dollar cash deposits.
‰ The non-U.S. dollar-denominated GCLA consists of
non-U.S. government obligations (only unencumbered
German, French, Japanese and U.K. government
obligations) and certain overnight cash deposits in highly
liquid currencies.
We maintain our GCLA to enable us to meet current andpotential liquidity requirements of our parent company,
Group Inc., and its subsidiaries. Our Modeled Liquidity
Outflow and Intraday Liquidity Model incorporate arequirement for Group Inc., as well as a standalone
requirement for each of our major broker-dealer and banksubsidiaries. Funding IHC is required to provide thenecessary liquidity to Group Inc. during the ordinary courseof business, and is also obligated to provide capital andliquidity support to major subsidiaries in the event of ourmaterial financial distress or failure. Liquidity held directlyin each of our major broker-dealer and bank subsidiaries isintended for use only by that subsidiary to meet its liquidity
requirements and is assumed not to be available to Group
Inc. or Funding IHC unless (i) legally provided for and(ii) there are no additional regulatory, tax or otherrestrictions. In addition, the Modeled Liquidity Outflow
and Intraday Liquidity Model also incorporate a broader
assessment of standalone liquidity requirements for othersubsidiaries and we hold a portion of our GCLA directly atGroup Inc. or Funding IHC to support such requirements.

Goldman Sachs 2021 Form 10-K

99

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Other Unencumbered Assets. In addition to our GCLA,
we have a significant amount of other unencumbered cash
and financial instruments, including other government
obligations, high-grade money market securities, corporate
obligations, marginable equities, loans and cash deposits
not included in our GCLA. The fair value of our
unencumbered assets averaged $271.65 billion for the threemonths ended December 2021, $214.06 billion for thethree months ended December 2020, $249.32 billion forthe year ended December 2021 and $207.60 billion for theyear ended December 2020. We do not consider these assets
liquid enough to be eligible for our GCLA.
Liquidity Regulatory Framework
As a BHC, we are subject to a minimum Liquidity Coverage
Ratio (LCR) under the LCR rule approved by the U.S.
federal bank regulatory agencies. The LCR rule requiresorganizations to maintain an adequate ratio of eligible
high-quality liquid assets (HQLA) to expected net cash
outflows under an acute, short-term liquidity stressscenario. Eligible HQLA excludes HQLA held bysubsidiaries that is in excess of their minimum requirement
and is subject to transfer restrictions. We are required tomaintain a minimum LCR of 100%. We expect thatfluctuations in client activity, business mix and the market
environment will impact our LCR.
The table below presents information about our average
daily LCR.
Average for theThree Months Ended$ in millions

December
2021

September
2021

December
2020

Total HQLA
Eligible HQLANet cash outflows$342,047$248,570$203,623$344,351$249,915$196,664$291,393$212,614$166,551

122%

127%

128%

LCR

In October 2020, the U.S. federal bank regulatory agencies
issued a final rule that established a net stable funding ratio(NSFR) requirement for large U.S. banking organizations.
This rule became effective on July 1, 2021 and requires
banking organizations to ensure they have access to stable
funding over a one-year time horizon. The rule also requires
disclosure of the ratio on a semi-annual basis and a
description of the banking organization’s stable funding
sources beginning in 2023. Our NSFR as of December 2021
exceeded the minimum requirement.

100 Goldman Sachs 2021 Form 10-K

The following provides information about our subsidiaryliquidity regulatory requirements:‰ GS Bank USA. GS Bank USA is subject to a minimum
LCR of 100% under the LCR rule approved by the U.S.
federal bank regulatory agencies. As of December 2021,
GS Bank USA’s LCR exceeded the minimum requirement.
The NSFR requirement described above also applies to
GS Bank USA. As of December 2021, GS Bank USA’s
NSFR exceeded the minimum requirement.
‰ GSI and GSIB. GSI and GSIB are subject to a minimum
LCR of 100% under the LCR rule approved by the U.K.
regulatory authorities. GSI’s and GSIB’s average monthly
LCR for the trailing twelve-month period ended
December 2021 exceeded the minimum requirement. GSI
and GSIB are subject to the applicable NSFR requirementin the U.K., which became effective in January 2022. Asof December 2021, both GSI’s and GSIB’s NSFR
exceeded the minimum requirement.
‰ GSBE. GSBE is subject to a minimum LCR of 100%
under the LCR rule approved by the European Parliamentand Council. GSBE’s average monthly LCR for the
trailing twelve-month period ended December 2021
exceeded the minimum requirement. GSBE is subject tothe applicable NSFR requirement in the E.U., whichbecame effective in June 2021. As of December 2021,
GSBE’s NSFR exceeded the minimum requirement.
‰ Other Subsidiaries. We monitor local regulatory
liquidity requirements of our subsidiaries to ensurecompliance. For many of our subsidiaries, theserequirements either have changed or are likely to change
in the future due to the implementation of the BaselCommittee’s framework for liquidity risk measurement,
standards and monitoring, as well as other regulatory
developments.
The implementation of these rules and any amendments
adopted by the regulatory authorities could impact our
liquidity and funding requirements and practices in the
future.
Credit Ratings
We rely on the short- and long-term debt capital markets tofund a significant portion of our day-to-day operations andthe cost and availability of debt financing is influenced byour credit ratings. Credit ratings are also important when
we are competing in certain markets, such as OTC
derivatives, and when we seek to engage in longer-termtransactions. See “Risk Factors” in Part I, Item 1A of thisForm 10-K for information about the risks associated witha reduction in our credit ratings.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents the unsecured credit ratings andoutlook of Group Inc.
As of December 2021
DBRS

Fitch

Moody’s

R&I

S&P

Short-term debt
R-1 (middle)
Long-term debt
A (high)
Subordinated debt
A
Trust preferredA
Preferred stock
BBB (high)Ratings outlook
StableF1ABBB+
BBBBBBStable

P-1
A2
Baa2
Baa3
Ba1
Stable

a-1
A
AN/A
N/A
Stable

A-2
BBB+
BBB
BB+
BB+
StableWe believe our credit ratings are primarily based on thecredit rating agencies’ assessment of:‰ Our liquidity, market, credit and operational risk
management practices;‰ Our level and variability of earnings;‰ Our capital base;‰ Our franchise, reputation and management;

In the table above:‰ Our corporate governance; and‰ The ratings and outlook are by DBRS, Inc. (DBRS), Fitch,
Inc. (Fitch), Moody’s Investors Service (Moody’s), Rating
and Investment Information, Inc. (R&I), and Standard &Poor’s Ratings Services (S&P).

‰ The external operating and economic environment,
including, in some cases, the assumed level of government
support or other systemic considerations, such as
potential resolution.

‰ The ratings for trust preferred relate to the guaranteed
preferred beneficial interests issued by Goldman Sachs
Capital I.

Certain of our derivatives have been transacted underbilateral agreements with counterparties who may require
us to post collateral or terminate the transactions based onchanges in our credit ratings. We manage our GCLA toensure we would, among other potential requirements, beable to make the additional collateral or termination
payments that may be required in the event of a two-notch
reduction in our long-term credit ratings, as well as
collateral that has not been called by counterparties, but isavailable to them.

‰ The DBRS, Fitch, Moody’s and S&P ratings for preferredstock include the APEX issued by Goldman Sachs
Capital II and Goldman Sachs Capital III.
The table below presents the unsecured credit ratings andoutlook of GS Bank USA, GSIB, GSBE, GS&Co. and GSI.
As of December 2021

GS Bank USA
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
GSIB
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
GSBE
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
GS&Co.
Short-term debt
Long-term debt
Ratings outlook
GSI
Short-term debt
Long-term debt
Ratings outlook

Fitch

Moody’s

S&P

F1
A+
F1+
AAStable

P-1
A1
P-1
A1
Stable

A-1
A+
N/A
N/A
StableF1A+
F1A+
Stable

P-1
A1
P-1
A1
Stable

A-1
A+
N/A
N/A
Stable

F1
A
N/A
N/A
Stable

P-1
A1
P-1
A1
Stable

A-1
A+
N/A
N/A
StableF1
A+
Stable

N/A
N/A
N/A

A-1
A+
StableF1
A+
StableP-1
A1
StableA-1
A+
StableSee Note 7 to the consolidated financial statements forfurther information about derivatives with credit-related
contingent features and the additional collateral or
termination payments related to our net derivative
liabilities under bilateral agreements that could have beencalled by counterparties in the event of a one- or two-notch
downgrade in our credit ratings.
Cash FlowsAs a global financial institution, our cash flows are complex
and bear little relation to our net earnings and net assets.
Consequently, we believe that traditional cash flow analysis
is less meaningful in evaluating our liquidity position thanthe liquidity and asset-liability management policies
described above. Cash flow analysis may, however, be
helpful in highlighting certain macro trends and strategic
initiatives in our businesses.

Goldman Sachs 2021 Form 10-K 101

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Year Ended December 2021. Our cash and cash
equivalents increased by $105.19 billion to $261.04 billion
at the end of 2021, primarily due to net cash provided byfinancing activities, partially offset by net cash used forinvesting activities. The net cash provided by financing
activities primarily reflected an increase in net deposits,reflecting increases across channels, and net issuances of
unsecured long-term borrowings. The net cash used forinvesting activities primarily reflected purchases ofinvestments and an increase in net lending activities,
partially offset by sales and paydowns of investments.

‰ Equity price risk: results from exposures to changes inprices and volatilities of individual equities, baskets ofequities and equity indices;Year Ended December 2020. Our cash and cash
equivalents increased by $22.30 billion to $155.84 billion at
the end of 2020, primarily due to net cash provided byfinancing activities, partially offset by net cash used forinvesting activities and operating activities. The net cash
provided by financing activities primarily reflected anincrease in net deposits, reflecting increases in consumer,transaction banking and private bank deposits. The net cashused for investing activities primarily reflected an increase in
net purchases of investments, reflecting an increase in U.S.
government obligations accounted for as available-for-saleand an increase in net lending activities. The net cash used for
operating activities primarily reflected an increase in trading
assets, net customer and other receivables and payables, andcollateralized transactions (an increase in collateralized
agreements, partially offset by an increase in collateralized
financings), partially offset by an increase in trading liabilities
as a result of our and our clients’ activities.

Market Risk, which is independent of our revenueproducing units and reports to our chief risk officer, has
primary responsibility for assessing, monitoring andmanaging our market risk through firmwide oversightacross our global businesses.

For an analysis of cash flows for the year ended
December 2019, see Part II, Item 7 “Management’s
Discussion and Analysis of Financial Condition and Resultsof Operations” in our Annual Report on Form 10-K for theyear ended December 31, 2020.

‰ Monitoring compliance with established market risk
limits and reporting our exposures;Market Risk Management
Overview
Market risk is the risk of loss in the value of our inventory,
investments, loans and other financial assets and liabilities
accounted for at fair value due to changes in market
conditions. We hold such positions primarily for market
making for our clients and for our investing and financing
activities, and therefore, these positions change based onclient demands and our investment opportunities. Since
these positions are accounted for at fair value, theyfluctuate on a daily basis, with the related gains and losses
included in the consolidated statements of earnings. We
employ a variety of risk measures, each described in therespective sections below, to monitor market risk.
Categories of market risk include the following:‰ Interest rate risk: results from exposures to changes in thelevel, slope and curvature of yield curves, the volatilities
of interest rates, prepayment speeds and credit spreads;
102 Goldman Sachs 2021 Form 10-K

‰ Currency rate risk: results from exposures to changes inspot prices, forward prices and volatilities of currency
rates; and‰ Commodity price risk: results from exposures to changes
in spot prices, forward prices and volatilities ofcommodities, such as crude oil, petroleum products,
natural gas, electricity, and precious and base metals.

Managers in revenue-producing units and Market Risk
discuss market information, positions and estimated loss
scenarios on an ongoing basis. Managers in revenueproducing units are accountable for managing risk withinprescribed limits. These managers have in-depth knowledgeof their positions, markets and the instruments available tohedge their exposures.
Market Risk Management Process
Our process for managing market risk includes the criticalcomponents of our risk management framework describedin the “Overview and Structure of Risk Management,” aswell as the following:‰ Diversifying exposures;‰ Controlling position sizes; and‰ Evaluating mitigants, such as economic hedges in related
securities or derivatives.
Our market risk management systems enable us to perform
an independent calculation of Value-at-Risk (VaR) andstress measures, capture risk measures at individual
position levels, attribute risk measures to individual risk
factors of each position, report many different views of therisk measures (e.g., by desk, business, product type orentity) and produce ad hoc analyses in a timely manner.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Risk Measures
We produce risk measures and monitor them against
established market risk limits. These measures reflect anextensive range of scenarios and the results are aggregatedat product, business and firmwide levels.
We use a variety of risk measures to estimate the size of
potential losses for both moderate and more extreme
market moves over both short- and long-term time
horizons. Our primary risk measures are VaR, which isused for shorter-term periods, and stress tests. Our risk
reports detail key risks, drivers and changes for each deskand business, and are distributed daily to senior
management of both our revenue-producing units and our
independent risk oversight and control functions.
Value-at-Risk. VaR is the potential loss in value due toadverse market movements over a defined time horizon
with a specified confidence level. For assets and liabilities
included in VaR, see “Financial Statement Linkages toMarket Risk Measures.” We typically employ a one-day
time horizon with a 95% confidence level. We use a single
VaR model, which captures risks, including interest rates,
equity prices, currency rates and commodity prices. As
such, VaR facilitates comparison across portfolios ofdifferent risk characteristics. VaR also captures thediversification of aggregated risk at the firmwide level.
We are aware of the inherent limitations to VaR and
therefore use a variety of risk measures in our market risk
management process. Inherent limitations to VaR include:‰ VaR does not estimate potential losses over longer time
horizons where moves may be extreme;‰ VaR does not take account of the relative liquidity ofdifferent risk positions; and‰ Previous moves in market risk factors may not produce
accurate predictions of all future market moves.
To comprehensively capture our exposures and relevantrisks in our VaR calculation, we use historical simulations
with full valuation of market factors at the position level bysimultaneously shocking the relevant market factors forthat position. These market factors include spot prices,credit spreads, funding spreads, yield curves, volatility andcorrelation, and are updated periodically based on changes
in the composition of positions, as well as variations inmarket conditions. We sample from five years of historical
data to generate the scenarios for our VaR calculation. The
historical data is weighted so that the relative importance ofthe data reduces over time. This gives greater importance tomore recent observations and reflects current asset
volatilities, which improves the accuracy of our estimates ofpotential loss. As a result, even if our positions included in
VaR were unchanged, our VaR would increase withincreasing market volatility and vice versa.

Given its reliance on historical data, VaR is most effective inestimating risk exposures in markets in which there are no
sudden fundamental changes or shifts in market conditions.
Our VaR measure does not include:‰ Positions that are best measured and monitored using
sensitivity measures; and‰ The impact of changes in counterparty and our own
credit spreads on derivatives, as well as changes in ourown credit spreads on financial liabilities for which thefair value option was elected.
We perform daily backtesting of our VaR model (i.e.,comparing daily net revenues for positions included in VaR
to the VaR measure calculated as of the prior business day)at the firmwide level and for each of our businesses andmajor regulated subsidiaries.
Stress Testing. Stress testing is a method of determining
the effect of various hypothetical stress scenarios. We use
stress testing to examine risks of specific portfolios, as wellas the potential impact of our significant risk exposures. We
use a variety of stress testing techniques to calculate thepotential loss from a wide range of market moves on our
portfolios, including firmwide stress tests, sensitivity
analysis and scenario analysis. The results of our various
stress tests are analyzed together for risk management
purposes. See “Overview and Structure of Risk
Management” for information about firmwide stress tests.
Sensitivity analysis is used to quantify the impact of amarket move in a single risk factor across all positions (e.g.,
equity prices or credit spreads) using a variety of definedmarket shocks, ranging from those that could be expected
over a one-day time horizon up to those that could takemany months to occur. We also use sensitivity analysis toquantify the impact of the default of any single entity,
which captures the risk of large or concentrated exposures.
Scenario analysis is used to quantify the impact of a
specified event, including how the event impacts multiple
risk factors simultaneously. For example, for sovereign
stress testing we calculate potential direct exposure
associated with our sovereign positions, as well as thecorresponding debt, equity and currency exposuresassociated with our non-sovereign positions that may be
impacted by the sovereign distress. When conducting
scenario analysis, we often consider a number of possible
outcomes for each scenario, ranging from moderate toseverely adverse market impacts. In addition, these stresstests are constructed using both historical events andforward-looking hypothetical scenarios.

Goldman Sachs 2021 Form 10-K 103

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis

LimitsWe use market risk limits at various levels to manage thesize of our market exposures. These limits are set based on
VaR and on a range of stress tests relevant to our exposures.
See “Overview and Structure of Risk Management” for
information about the limit approval process.
Market Risk is responsible for monitoring these limits, andidentifying and escalating to senior management and/or theappropriate risk committee, on a timely basis, instanceswhere limits have been exceeded (e.g., due to positionalchanges or changes in market conditions, such as increased
volatilities or changes in correlations). Such instances are
remediated by a reduction in the positions we hold and/or atemporary or permanent increase to the limit, if warranted.
Metrics
We analyze VaR at the firmwide level and a variety of moredetailed levels, including by risk category, business andregion. Diversification effect in the tables below represents
the difference between total VaR and the sum of the VaRs
for the four risk categories. This effect arises because thefour market risk categories are not perfectly correlated.
The table below presents our average daily VaR.
Year Ended December$ in millions

2021

2020

Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Diversification effect
Total

$ 60
43
13
25
(55)
$ 86

$ 71
55
23
20
(75)
$ 94

Our average daily VaR decreased to $86 million in 2021
from $94 million in 2020, due to lower levels of volatility,
partially offset by increased exposures. The total decreaseof $8 million was driven by decreases in the equity prices,interest rates and currency rates categories, partially offset
by a decrease in the diversification effect and an increase in
the commodity prices category.

The table below presents our period-end VaR.
As of December$ in millions

2021

2020

Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Diversification effect
Total

$ 69
31
19
30
(58)
$ 91

$ 60
50
11
16
(46)
$ 91

Our period-end VaR was $91 million as of December 2021,
unchanged compared with December 2020, reflecting
increased exposures, offset by lower levels of volatility. Thiswas driven by increases in the commodity prices, interest
rates and currency rates categories, offset by a decrease in
the equity prices category and an increase in thediversification effect.
During 2021, the firmwide VaR risk limit was notexceeded, raised or reduced, and there were no permanentor temporary changes to the firmwide VaR risk limit.
During 2020, the firmwide VaR risk limit was exceeded on
16 occasions (all of which occurred during the first half of2020), primarily due to higher levels of volatility. There
were no permanent changes to the firmwide VaR risk limit
during this period. However, there were temporary
increases to the firmwide VaR risk limit as a result of themarket environment in 2020.
The table below presents our high and low VaR.
Year Ended December
2021

2020

$ in millions

High

Low

High

Low

Categories
Interest rates
Equity prices
Currency rates
Commodity prices

$ 74
$ 71
$ 20
$ 45

$49
$30
$ 8
$14

$120
$116
$ 53
$ 54

$46
$23
$ 8
$ 9

Firmwide
VaR

$105

$69

$195

$58

The chart below presents our daily VaR for 2021.
210

180

150

Daily VaR(in millions)

Unlike VaR measures, which have an implied probability
because they are calculated at a specified confidence level,
there may not be an implied probability that our stresstesting scenarios will occur. Instead, stress testing is used tomodel both moderate and more extreme moves inunderlying market factors. When estimating potential loss,
we generally assume that our positions cannot be reducedor hedged (although experience demonstrates that we are
generally able to do so).

120

90

60

30

0

First Quarter
2021

104 Goldman Sachs 2021 Form 10-K

Second Quarter
2021

Third Quarter
2021

Fourth Quarter2021

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents, by number of business days, thefrequency distribution of our daily net revenues for
positions included in VaR.
Year Ended December$ in millions

2021

2020

>$100
$75 - $100
$50 - $75
$25 - $50
$0 - $25$(25) - $0$(50) - $(25)$(75) - $(50)$(100) - $(75)<$(100)
Total

53
45
42
33
45
24
6
2
1
1
252

50
37
48
51
43
11
8
3
2
–
253

Daily net revenues for positions included in VaR arecompared with VaR calculated as of the end of the priorbusiness day. Net losses incurred on a single day for such
positions exceeded our 95% one-day VaR (i.e., a VaR
exception) on one occasion during 2021 and on two
occasions during 2020.
During periods in which we have significantly more positive
net revenue days than net revenue loss days, we expect to havefewer VaR exceptions because, under normal conditions, ourbusiness model generally produces positive net revenues. In
periods in which our franchise revenues are adversely affected,
we generally have more loss days, resulting in more VaR
exceptions. The daily net revenues for positions included in
VaR used to determine VaR exceptions reflect the impact of
any intraday activity, including bid/offer net revenues, which
are more likely than not to be positive by their nature.
Sensitivity Measures
Certain portfolios and individual positions are not includedin VaR because VaR is not the most appropriate risk
measure. Other sensitivity measures we use to analyze
market risk are described below.
10% Sensitivity Measures. The table below presents ourmarket risk by asset category for positions accounted for atfair value, that are not included in VaR.
As of December$ in millions

Equity
Debt
Total

2021

2020

$1,953
2,244$4,197$1,8542,516$4,370In the table above:‰ The market risk of these positions is determined byestimating the potential reduction in net revenues of a
10% decline in the value of these positions.
‰ Equity positions relate to private and restricted public
equity securities, including interests in funds that invest in
corporate equities and real estate and interests in hedge
funds.

‰ Debt positions include interests in funds that invest in
corporate mezzanine and senior debt instruments, loans
backed by commercial and residential real estate,
corporate bank loans and other corporate debt, including
acquired portfolios of distressed loans.
‰ Funded equity and debt positions are included in ourconsolidated balance sheets in investments and loans. See
Note 8 to the consolidated financial statements forfurther information about investments and Note 9 to theconsolidated financial statements for further information
about loans.
‰ These measures do not reflect the diversification effectacross asset categories or across other market risk
measures.
Credit and Funding Spread Sensitivity on Derivatives
and Financial Liabilities. VaR excludes the impact ofchanges in counterparty credit spreads, our own credit
spreads and unsecured funding spreads on derivatives, aswell as changes in our own credit spreads (debt valuation
adjustment) on financial liabilities for which the fair value
option was elected. The estimated sensitivity to a one basis
point increase in credit spreads (counterparty and our own)
and unsecured funding spreads on derivatives (including
hedges) was a loss of $1 million as of December 2021 and$3 million as of December 2020. In addition, the estimatedsensitivity to a one basis point increase in our own credit
spreads on financial liabilities for which the fair value
option was elected was a gain of $33 million as ofDecember 2021 and $22 million as of December 2020.
However, the actual net impact of a change in our own
credit spreads is also affected by the liquidity, duration andconvexity (as the sensitivity is not linear to changes inyields) of those financial liabilities for which the fair value
option was elected, as well as the relative performance ofany hedges undertaken.
Interest Rate Sensitivity. Loans accounted for atamortized cost were $139.93 billion as of December 2021
and $99.69 billion as of December 2020, substantially all ofwhich had floating interest rates. The estimated sensitivity to
a 100 basis point increase in interest rates on such loans was$1.07 billion as of December 2021 and $737 million as ofDecember 2020 of additional interest income over a twelvemonth period, which does not take into account the potential
impact of an increase in costs to fund such loans. See Note 9
to the consolidated financial statements for further
information about loans accounted for at amortized cost.
Other Market Risk Considerations
We make investments in securities that are accounted for as
available-for-sale, held-to-maturity or under the equity
method which are included in investments in the
consolidated balance sheets. See Note 8 to the consolidated
financial statements for further information.
Goldman Sachs 2021 Form 10-K 105

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Direct investments in real estate are accounted for at costless accumulated depreciation. See Note 12 to theconsolidated financial statements for further information
about other assets.
Financial Statement Linkages to Market Risk
MeasuresWe employ a variety of risk measures, each described in therespective sections above, to monitor market risk across theconsolidated balance sheets and consolidated statements ofearnings. The related gains and losses on these positions areincluded in market making, other principal transactions,interest income and interest expense in the consolidated
statements of earnings, and debt valuation adjustment in
the consolidated statements of comprehensive income.
The table below presents certain assets and liabilities in ourconsolidated balance sheets and the market risk measuresused to assess those assets and liabilities.
Assets or Liabilities

Market Risk Measures

Collateralized agreements, at fair value

VaR

Customer and other receivables, at fair value

10% Sensitivity Measures

Trading assets

VaR
Credit Spread Sensitivity

Investments, at fair value

VaR
10% Sensitivity Measures

Loans

VaR
10% Sensitivity Measures
Interest Rate Sensitivity

Deposits, at fair value

VaR
Credit Spread Sensitivity

Collateralized financings, at fair value

VaR

Trading liabilities

VaR
Credit Spread Sensitivity

Unsecured borrowings, at fair value

VaR
Credit Spread Sensitivity

Credit Risk Management
Overview
Credit risk represents the potential for loss due to thedefault or deterioration in credit quality of a counterparty(e.g., an OTC derivatives counterparty or a borrower) or anissuer of securities or other instruments we hold. Our
exposure to credit risk comes mostly from clienttransactions in OTC derivatives and loans and lending
commitments. Credit risk also comes from cash placed withbanks, securities financing transactions (i.e., resale andrepurchase agreements and securities borrowing andlending activities) and customer and other receivables.

106 Goldman Sachs 2021 Form 10-K

Credit Risk, which is independent of our revenueproducing units and reports to our chief risk officer, has
primary responsibility for assessing, monitoring andmanaging our credit risk through firmwide oversight acrossour global businesses. In addition, we hold other positions
that give rise to credit risk (e.g., bonds and secondary bankloans). These credit risks are captured as a component ofmarket risk measures, which are monitored and managed
by Market Risk. We also enter into derivatives to manage
market risk exposures. Such derivatives also give rise tocredit risk, which is monitored and managed by Credit
Risk.
Credit Risk Management Process
Our process for managing credit risk includes the criticalcomponents of our risk management framework describedin the “Overview and Structure of Risk Management,” aswell as the following:‰ Monitoring compliance with established credit risk limits
and reporting our credit exposures and credit
concentrations;‰ Establishing or approving underwriting standards;‰ Assessing the likelihood that a counterparty will default
on its payment obligations;‰ Measuring our current and potential credit exposure andlosses resulting from a counterparty default;‰ Using credit risk mitigants, including collateral andhedging; and‰ Maximizing recovery through active workout andrestructuring of claims.
We also perform credit reviews, which include initial andongoing analyses of our counterparties. For substantially allof our credit exposures, the core of our process is an annual
counterparty credit review. A credit review is anindependent analysis of the capacity and willingness of acounterparty to meet its financial obligations, resulting in
an internal credit rating. The determination of internal
credit ratings also incorporates assumptions with respect tothe nature of and outlook for the counterparty’s industry,
and the economic environment. Senior personnel, withexpertise in specific industries, inspect and approve credit
reviews and internal credit ratings.
Our risk assessment process may also include, whereapplicable, reviewing certain key metrics, including, but notlimited to, delinquency status, collateral values, FICO
credit scores and other risk factors.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Our credit risk management systems capture credit
exposure to individual counterparties and on an aggregate
basis to counterparties and their subsidiaries. These systems
also provide management with comprehensive information
about our aggregate credit risk by product, internal credit
rating, industry, country and region.
Risk Measures
We measure our credit risk based on the potential loss in theevent of non-payment by a counterparty using current andpotential exposure. For derivatives and securities financing
transactions, current exposure represents the amountpresently owed to us after taking into account applicablenetting and collateral arrangements, while potential
exposure represents our estimate of the future exposurethat could arise over the life of a transaction based onmarket movements within a specified confidence level.
Potential exposure also takes into account netting andcollateral arrangements. For loans and lending
commitments, the primary measure is a function of thenotional amount of the position.
Stress Tests
We conduct regular stress tests to calculate the credit
exposures, including potential concentrations that would
result from applying shocks to counterparty credit ratingsor credit risk factors (e.g., currency rates, interest rates,
equity prices). These shocks cover a wide range of moderate
and more extreme market movements, including shocks tomultiple risk factors, consistent with the occurrence of asevere market or economic event. In the case of sovereigndefault, we estimate the direct impact of the default on oursovereign credit exposures, changes to our credit exposuresarising from potential market moves in response to thedefault, and the impact of credit market deterioration on
corporate borrowers and counterparties that may result
from the sovereign default. Unlike potential exposure,which is calculated within a specified confidence level,stress testing does not generally assume a probability ofthese events occurring. We also perform firmwide stresstests. See “Overview and Structure of Risk Management”
for information about firmwide stress tests.
To supplement these regular stress tests, as described above,
we also conduct tailored stress tests on an ad hoc basis in
response to specific market events that we deem significant.
We also utilize these stress tests to estimate the indirect
impact of certain hypothetical events on our country
exposures, such as the impact of credit market deteriorationon corporate borrowers and counterparties along with theshocks to the risk factors described above. The parametersof these shocks vary based on the scenario reflected in eachstress test. We review estimated losses produced by thestress tests in order to understand their magnitude,highlight potential loss concentrations, and assess andmitigate our exposures where necessary.

LimitsWe use credit risk limits at various levels, as well as
underwriting standards to manage the size and nature of
our credit exposures. Limits for industries and countries are
based on our risk appetite and are designed to allow for
regular monitoring, review, escalation and management ofcredit risk concentrations. See “Overview and Structure of
Risk Management” for information about the limit
approval process.
Credit Risk is responsible for monitoring these limits, andidentifying and escalating to senior management and/or theappropriate risk committee, on a timely basis, instanceswhere limits have been exceeded.
Risk Mitigants
To reduce our credit exposures on derivatives and securities
financing transactions, we may enter into netting
agreements with counterparties that permit us to offset
receivables and payables with such counterparties. We may
also reduce credit risk with counterparties by entering into
agreements that enable us to obtain collateral from them onan upfront or contingent basis and/or to terminatetransactions if the counterparty’s credit rating falls below a
specified level. We monitor the fair value of the collateral toensure that our credit exposures are appropriately
collateralized. We seek to minimize exposures where there
is a significant positive correlation between thecreditworthiness of our counterparties and the market
value of collateral we receive.
For loans and lending commitments, depending on thecredit quality of the borrower and other characteristics ofthe transaction, we employ a variety of potential risk
mitigants. Risk mitigants include collateral provisions,guarantees, covenants, structural seniority of the bank loan
claims and, for certain lending commitments, provisions in
the legal documentation that allow us to adjust loan
amounts, pricing, structure and other terms as market
conditions change. The type and structure of risk mitigants
employed can significantly influence the degree of credit
risk involved in a loan or lending commitment.
When we do not have sufficient visibility into a
counterparty’s financial strength or when we believe a
counterparty requires support from its parent, we may
obtain third-party guarantees of the counterparty’s
obligations. We may also mitigate our credit risk using
credit derivatives or participation agreements.

Goldman Sachs 2021 Form 10-K 107

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Credit Exposures
As of December 2021, our aggregate credit exposure
increased as compared with December 2020, primarilyreflecting increases in cash deposits with central banks andloans and lending commitments. The percentage of ourcredit exposures arising from non-investment-grade
counterparties (based on our internally determined public
rating agency equivalents) decreased as compared with
December 2020, primarily reflecting an increase ininvestment-grade credit exposure related to cash deposits
with central banks. Our credit exposures are describedfurther below.
Cash and Cash Equivalents. Our credit exposure on cash
and cash equivalents arises from our unrestricted cash, andincludes both interest-bearing and non-interest-bearing
deposits. To mitigate the risk of credit loss, we placesubstantially all of our deposits with highly rated banks andcentral banks.
The table below presents our credit exposure fromunrestricted cash and cash equivalents, and theconcentration by industry, region and internally determinedpublic rating agency equivalents.
As of December$ in millions

2021

2020

$236,168$131,324

Industry
Financial Institutions
Sovereign
Total

5%
95%
100%

11%
89%
100%

RegionAmericas
EMEA
Asia
Total

55%
36%
9%
100%

45%
41%
14%
100%

Credit Quality (Credit Rating Equivalent)
AAA
AA
A
BBB
Total

64%
24%
11%
1%
100%

44%
38%
17%
1%
100%

Cash and Cash Equivalents

The table above excludes cash segregated for regulatory
and other purposes of $24.87 billion as of December 2021
and $24.52 billion as of December 2020.
OTC Derivatives. Our credit exposure on OTC derivatives
arises primarily from our market-making activities. As amarket maker, we enter into derivative transactions toprovide liquidity to clients and to facilitate the transfer andhedging of their risks. We also enter into derivatives tomanage market risk exposures. We manage our credit
exposure on OTC derivatives using the credit risk process,measures, limits and risk mitigants described above.

108 Goldman Sachs 2021 Form 10-K

We generally enter into OTC derivatives transactions underbilateral collateral arrangements that require the daily
exchange of collateral. As credit risk is an essential
component of fair value, we include a credit valuation
adjustment (CVA) in the fair value of derivatives to reflect
counterparty credit risk, as described in Note 7 to theconsolidated financial statements. CVA is a function of thepresent value of expected exposure, the probability ofcounterparty default and the assumed recovery upon default.
The table below presents our net credit exposure from OTC
derivatives and the concentration by industry and region.
As of December$ in millions

2021

2020

$ 58,637(17,245)$ 41,392$ 64,850(18,990)$ 45,860

Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Municipalities & Nonprofit
Natural Resources & Utilities
Sovereign
Technology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total

2%
10%
15%
13%
1%
5%
33%
8%
8%
5%
100%

4%
23%
12%
12%
2%
6%
11%
14%
12%
4%
100%

RegionAmericas
EMEA
Asia
Total

53%
37%
10%
100%

62%
30%
8%
100%

OTC derivative assets
Collateral (not netted under U.S. GAAP)Net credit exposure

Our credit exposure (before any potential recoveries) to
OTC derivative counterparties that defaulted during 2021
remained low, representing less than 2% of our total credit
exposure from OTC derivatives.
In the table above:‰ OTC derivative assets, included in the consolidatedbalance sheets, are reported on a net-by-counterparty basis(i.e., the net receivable for a given counterparty) when alegal right of setoff exists under an enforceable netting
agreement (counterparty netting) and are accounted for atfair value, net of cash collateral received under enforceablecredit support agreements (cash collateral netting).
‰ Collateral represents cash collateral and the fair value of
securities collateral, primarily U.S. and non-U.S.
government and agency obligations, received under credit
support agreements, that we consider when determining
credit risk, but such collateral is not eligible for netting
under U.S. GAAP.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents the distribution of our net credit
exposure from OTC derivatives by tenor.
$ in millions

InvestmentGrade

Non-InvestmentGrade / Unrated

Total

As of December 2021
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 27,668
21,74664,670114,084(89,244)$ 24,840$ 11,203
9,515
6,590
27,308(10,756)$ 16,552$ 38,871
31,261
71,260141,392(100,000)$ 41,392

As of December 2020
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 22,332
23,92777,653
123,912(101,691)$ 22,221$ 12,507
16,486
8,958
37,951(14,312)$ 23,639$ 34,839
40,41386,611
161,863(116,003)$ 45,860‰ Tenor is based on remaining contractual maturity.
‰ Netting includes counterparty netting across tenor
categories and collateral that we consider when determining
credit risk (including collateral that is not eligible for netting
under U.S. GAAP). Counterparty netting within the sametenor category is included within such tenor category.
The tables below present the distribution of our net credit
exposure from OTC derivatives by tenor and internallydetermined public rating agency equivalents.
Investment-GradeAAA

AA

As of December 2021
Less than 1 year
$ 1,017 $ 4,926
1 - 5 years
1,150
3,071
Greater than 5 years
13,777
5,421
Total
15,944 13,418
Netting(13,535) (9,501)
Net credit exposure $ 2,409 $ 3,917
As of December 2020
Less than 1 year$
532 $ 4,146
1 - 5 years
1,069
4,189
Greater than 5 years
16,550
7,403
Total
18,151 15,738
Netting(14,364) (11,230)
Net credit exposure $ 3,787 $ 4,508

A

BBB

Total

$ 12,481 $ 9,244 $ 27,668
8,298
9,227
21,74623,867 21,605
64,67044,646 40,076 114,084(36,005) (30,203) (89,244)$ 8,641 $ 9,873 $ 24,840$ 11,440 $ 6,214 $ 22,332
10,976
7,693
23,92728,410 25,290
77,65350,826 39,197 123,912(44,529) (31,568) (101,691)$ 6,297 $ 7,629 $ 22,221
Non-Investment-Grade / Unrated$ in millions

The table below presents our loans and lending
commitments.

$ in millions

In the table above:$ in millions

Lending Activities. We manage our lending activities
using the credit risk process, measures, limits and risk
mitigants described above. Other lending positions,
including secondary trading positions, are risk-managed as
a component of market risk.

BB or lower

UnratedLoans

Lending
Commitments

Total

As of December 2021
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

$ 55,927
43,99825,883
15,913$155,930
4,094
5,813
3,396

$211,857
48,092
31,696
19,309

3,672
8,212
8,530
$162,135935,932
6,378$211,552

3,681
44,144
14,908$373,687

Allowance for loan losses$ (3,573)

$

(776)

$ (4,349)

As of December 2020
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

$ 48,659
33,023
20,2905,750$135,818
3,103
4,268
1,900

$184,477
36,12624,558
7,650

3,823
4,270
4,174
$119,989

4
21,6404,842$171,575

3,827
25,9109,016$291,564

Allowance for loan losses$ (3,874)$$ (4,431)(557)

See Note 9 to the consolidated financial statements for
information about net charge-offs on wholesale andconsumer loans, as well as past due and nonaccrual loans
accounted for at amortized cost.
Corporate. Corporate loans and lending commitments
include term loans, revolving lines of credit, letter of credit
facilities and bridge loans, and are principally used for
operating and general corporate purposes, or in connection
with acquisitions. Corporate loans may be secured or
unsecured, depending on the loan purpose, the risk profileof the borrower and other factors.

Total

As of December 2021
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 10,446 $757 $ 11,203
9,210
305
9,515
6,320
270
6,590
25,976
1,332
27,308(10,683)(73) (10,756)$ 15,293 $ 1,259 $ 16,552

As of December 2020
Less than 1 year
1 - 5 years
Greater than 5 years
Total
Netting
Net credit exposure$ 11,541 $966 $ 12,507
16,274212
16,486
8,844
114
8,958
36,6591,292
37,951(14,114)(198) (14,312)$ 22,545 $ 1,094 $ 23,639

Goldman Sachs 2021 Form 10-K 109

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
The table below presents our credit exposure from
corporate loans and lending commitments, and theconcentration by industry, region, internally determinedpublic rating agency equivalents and other credit metrics.

$ in millions

As of December 2021
Corporate

Lending
Loans Commitments$55,927

Total$155,930 $211,857

Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Natural Resources & Utilities
Real EstateTechnology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total

8%
13%
8%
21%
7%
9%
8%
18%
8%
100%

13%
16%
7%
4%
9%
17%
5%
24%
5%
100%

12%
15%
7%
8%
9%
14%
6%
23%
6%
100%

RegionAmericas
EMEA
Asia
Total

54%
38%
8%
100%

76%
21%
3%
100%

70%
26%
4%
100%

Credit Quality (Credit Rating Equivalent)
AAA
–
AA
1%
A
5%
BBB
22%
BB or lower
72%
Total
100%

1%
5%
16%
38%
40%
100%

1%
3%
13%
34%
49%
100%

As of December 2020
Corporate$48,659

The table below presents our credit exposure from wealthmanagement loans and lending commitments, and theconcentration by region, internally determined public
rating agency equivalents and other credit metrics.

$ in millions

As of December 2021
Wealth Management
RegionAmericas
EMEA
Asia
Total

Lending
Loans Commitments$43,998

Total$4,094 $48,092

87%
10%
3%
100%

98%
2%
–
100%

88%
9%
3%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade72%
Non-investment-grade
13%
Other metrics/unrated
15%
Total
100%

67%
19%
14%
100%

71%
14%
15%
100%

As of December 2020
Wealth Management$3,103 $36,126$33,023$135,818 $184,477

Industry
Consumer & Retail
7%
Diversified Industrials
17%
Financial Institutions
10%
Funds
13%
Healthcare
7%
Natural Resources & Utilities
12%
Real Estate
8%
Technology, Media & Telecommunications
17%
Other (including Special Purpose Vehicles)
9%
Total
100%

14%
17%
6%
3%
12%
18%
6%
19%
5%
100%

12%
17%
7%
6%
11%
16%
6%
19%
6%
100%

RegionAmericas
EMEA
Asia
Total

60%
31%
9%
100%

70%
28%
2%
100%

67%
29%
4%
100%

Credit Quality (Credit Rating Equivalent)
AAA
–
AA
–
A
6%
BBB
13%
BB or lower
80%
Other metrics/unrated
1%
Total
100%

1%
5%
19%
36%
38%
1%
100%

1%
4%
15%
30%
49%
1%
100%

In the table above, credit exposure excludes $4.14 billion asof December 2021 and $3.20 billion as of December 2020
relating to issued letters of credit which are classified as
guarantees in our consolidated financial statements. See
Note 18 to the consolidated financial statements for further
information about guarantees.
110 Goldman Sachs 2021 Form 10-K

Wealth Management. Wealth management loans andlending commitments are extended to private bank clients,
including wealth management and other clients. Theseloans are used to finance investments in both financial andnonfinancial assets, bridge cash flow timing gaps or provide
liquidity for other needs. Substantially all of such loans are
secured by securities, residential real estate, commercial realestate or other assets.

RegionAmericas
EMEA
Asia
Total

88%
10%
2%
100%

99%
1%
–
100%

89%
9%
2%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade67%
Non-investment-grade
16%
Other metrics/unrated
17%
Total
100%

58%
21%
21%
100%

66%
17%
17%
100%

In the table above, other metrics/unrated loans primarily
include loans backed by residential real estate. Our risk
assessment process for such loans include reviewing certain
key metrics, such as loan-to-value ratio and delinquency
status.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Commercial Real Estate. Commercial real estate loans
and lending commitments include originated loans andlending commitments (other than those extended to privatebank clients) that are directly or indirectly secured byhotels, retail stores, multifamily housing complexes andcommercial and industrial properties. Commercial realestate loans and lending commitments also includes loans
and lending commitments extended to clients who
warehouse assets that are directly or indirectly backed bycommercial real estate. In addition, commercial real estateincludes loans purchased by us.

Residential Real Estate. Residential real estate loans andlending commitments are extended to clients (other thanthose extended to private bank clients) who warehouseassets that are directly or indirectly secured by residential
real estate and also includes loans purchased by us.

The table below presents our credit exposure fromcommercial real estate loans and lending commitments, andthe concentration by region, internally determined public
rating agency equivalents and other credit metrics.

$ in millions$ in millions

As of December 2021
Commercial Real Estate
RegionAmericas
EMEA
Asia
Total

Lending
Loans Commitments$25,883
80%
15%
5%
100%

Total

$5,813 $31,696
75%
11%
14%
100%

79%
14%
7%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
15%
Non-investment-grade
83%
Other metrics/unrated
2%
Total
100%

10%
90%
–
100%

As of December 2020
Commercial Real Estate$4,268 $24,558

RegionAmericas
EMEA
Asia
Total

$20,290

14%
85%
1%
100%

71%
19%
10%
100%

65%
10%
25%
100%

70%
18%
12%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
9%
Non-investment-grade
86%
Other metrics/unrated
5%
Total
100%

13%
87%
–
100%

10%
86%
4%
100%

In the table above, credit exposure includes loans andlending commitments of $11.65 billion as ofDecember 2021 and $7.88 billion as of December 2020
which are extended to clients who warehouse assets that are
directly or indirectly backed by commercial real estate.
In addition, we also have credit exposure to certain
commercial real estate loans held for securitization of$922 million as of December 2021 and $503 million as ofDecember 2020. Such loans are included in trading assets in
our consolidated balance sheets.

The table below presents our credit exposure fromresidential real estate loans and lending commitments, andthe concentration by region, internally determined public
rating agency equivalents and other credit metrics.

As of December 2021
Residential Real Estate
RegionAmericas
EMEA
Asia
Total

Lending
Loans Commitments$15,913

Total$3,396 $19,309

95%
2%
3%
100%

79%
19%
2%
100%

92%
5%
3%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
7%
Non-investment-grade
87%
Other metrics/unrated
6%
Total
100%

24%
74%
2%
100%

10%
84%
6%
100%

As of December 2020
Residential Real Estate$1,900 $ 7,650

RegionAmericas
EMEA
Asia
Total

$ 5,750
88%
9%
3%
100%

98%
2%
–
100%

91%
7%
2%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade11%
Non-investment-grade
67%
Other metrics/unrated
22%
Total
100%

2%
93%
5%
100%

9%
73%
18%
100%

In the table above:‰ Credit exposure includes loans and lending commitments
of $16.89 billion as of December 2021 and $5.71 billion
as of December 2020 which are extended to clients who
warehouse assets that are directly or indirectly secured byresidential real estate.
‰ Other metrics/unrated primarily includes loans purchasedby us. Our risk assessment process for such loans includes
reviewing certain key metrics, such as loan-to-value ratio,delinquency status, collateral values, expected cash flows
and other risk factors.
In addition, we also have exposure to residential real estateloans held for securitization of $11.57 billion as ofDecember 2021 and $5.57 billion as of December 2020.
Such loans are included in trading assets in ourconsolidated balance sheets.

Goldman Sachs 2021 Form 10-K 111

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Installment and Credit Card Lending. We originate
unsecured installment loans and credit card loans (pursuant
to revolving lines of credit) to consumers in the Americas.
The credit card lines are cancellable by us and therefore do
not result in credit exposure.
The table below presents our credit exposure fromoriginated installment and credit card funded loans, and theconcentration by the ten most concentrated U.S. states.
As of December$ in millions

2021

2020

Installment$3,672$3,823

California
Texas
FloridaNew York
Illinois
New Jersey
Pennsylvania
Georgia
Ohio
Virginia
Other
Total

11%
9%
7%
7%
4%
4%
4%
3%
3%
3%
45%
100%

11%
9%
7%
7%
4%
4%
4%
3%
3%
3%
45%
100%

Credit Cards$8,212$4,270

California
Texas
New York
FloridaNew Jersey
Illinois
Pennsylvania
Georgia
Ohio
Virginia
Other
Total

18%
9%
8%
8%
4%
4%
3%
3%
3%
2%
38%
100%

19%
9%
8%
8%
4%
4%
3%
3%
3%
3%
36%
100%

See Note 9 to the consolidated financial statements forfurther information about the credit quality indicators of
installment and credit card loans.
Other. Other loans and lending commitments are extended
to clients who warehouse assets that are directly or
indirectly secured by consumer loans, including auto loans
and private student loans, and other assets. Other loans
also includes unsecured consumer and credit card loans
purchased by us.

The table below presents our credit exposure from otherloans and lending commitments, and the concentration byregion, internally determined public rating agency
equivalents and other credit metrics.

$ in millions

Lending
Loans Commitments

Total

As of December 2021
Other

$8,530$6,378 $14,908

RegionAmericas
EMEA
Asia
Total

84%
15%
1%
100%

98%
–
2%
100%

90%
9%
1%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
34%
Non-investment-grade
37%
Other metrics/unrated
29%
Total
100%

90%
9%
1%
100%

58%
25%
17%
100%

As of December 2020
Other

$4,174$4,842 $ 9,016

RegionAmericas
EMEA
Asia
Total

81%
17%
2%
100%

98%
–
2%
100%

90%
8%
2%
100%

Credit Quality (Credit Rating Equivalent)
Investment-grade
44%
Non-investment-grade
23%
Other metrics/unrated
33%
Total
100%

94%
6%
–
100%

71%
14%
15%
100%

In the table above:‰ Credit exposure includes loans and lending commitments
extended to clients who warehouse assets of$11.09 billion as of December 2021 and $7.28 billion asof December 2020.
‰ Other metrics/unrated primarily includes consumer andcredit card loans purchased by us. Our risk assessment
process for such loans includes reviewing certain key
metrics, such as expected cash flows, delinquency status
and other risk factors.
In addition, we also have exposure to other loans held for
securitization of $467 million as of December 2021 and$420 million as of December 2020. Such loans are included
in trading assets in our consolidated balance sheets.
Credit Hedges. To mitigate the credit risk associated with
our lending activities, we obtain credit protection on certain
loans and lending commitments through credit default
swaps, both single-name and index-based contracts, andthrough the issuance of credit-linked notes.

112 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Securities Financing Transactions. We enter into
securities financing transactions in order to, among otherthings, facilitate client activities, invest excess cash, acquire
securities to cover short positions and finance certain
activities. We bear credit risk related to resale agreements
and securities borrowed only to the extent that cash
advanced or the value of securities pledged or delivered tothe counterparty exceeds the value of the collateral
received. We also have credit exposure on repurchaseagreements and securities loaned to the extent that thevalue of securities pledged or delivered to the counterparty
for these transactions exceeds the amount of cash orcollateral received. Securities collateral for thesetransactions primarily includes U.S. and non-U.S.
government and agency obligations.

Other Credit Exposures. We are exposed to credit risk
from our receivables from brokers, dealers and clearingorganizations and customers and counterparties.
Receivables from brokers, dealers and clearingorganizations primarily consist of initial margin placedwith clearing organizations and receivables related to salesof securities which have traded, but not yet settled. These
receivables generally have minimal credit risk due to thelow probability of clearing organization default and theshort-term nature of receivables related to securities
settlements. Receivables from customers and counterparties
generally consist of collateralized receivables related tocustomer securities transactions and generally haveminimal credit risk due to both the value of the collateral
received and the short-term nature of these receivables.

The table below presents our credit exposure fromsecurities financing transactions and the concentration byindustry, region and internally determined public rating
agency equivalents.

The table below presents our other credit exposures and theconcentration by industry, region and internally determinedpublic rating agency equivalents.
As of December

As of December$ in millions

2021

2020

Other Credit Exposures$34,505$30,190

Industry
Financial Institutions
Funds
Municipalities & Nonprofit
Sovereign
Other (including Special Purpose Vehicles)
Total

34%
23%
5%
35%
3%
100%

39%
24%
5%
30%
2%
100%

RegionAmericas
EMEA
Asia
Total

36%
44%
20%
100%

33%
46%
21%
100%

Credit Quality (Credit Rating Equivalent)
AAA
AA
A
BBB
BB or lower
Unrated
Total

19%
28%
33%
9%
11%
–
100%

15%
28%
40%
10%
5%
2%
100%

$ in millions

Securities Financing Transactions

The table above reflects both netting agreements andcollateral that we consider when determining credit risk.

2021

2020

$61,187$56,429

Industry
Financial Institutions
Funds
Other (including Special Purpose Vehicles)
Total

86%
9%
5%
100%

85%
9%
6%
100%

RegionAmericas
EMEA
Asia
Total

50%
43%
7%
100%

54%
35%
11%
100%

Credit Quality (Credit Rating Equivalent)
AAA
AA
A
BBB
BB or lower
Unrated
Total

4%
47%
29%
6%
13%
1%
100%

5%
48%
27%
8%
11%
1%
100%

The table above reflects collateral that we consider when
determining credit risk.
Selected Exposures
We have credit and market exposures, as described below,that have had heightened focus given recent events andbroad market concerns. Credit exposure represents thepotential for loss due to the default or deterioration incredit quality of a counterparty or borrower. Market
exposure represents the potential for loss in value of ourlong and short positions due to changes in market prices.

Goldman Sachs 2021 Form 10-K 113

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Country Exposures. High external funding needs andinconsistent monetary policy have led to significant
depreciation of the Turkish Lira, prompting concerns about
foreign exchange reserves and economic instability. As of
December 2021, our total credit exposure to Turkey was$1.39 billion, which was to non-sovereign counterparties orborrowers. Such exposure consisted of $663 million related to
OTC derivatives, $160 million related to loans and lending
commitments and $567 million related to secured receivables.
After taking into consideration the benefit of hedges andTurkish corporate and sovereign collateral, and other risk
mitigants provided by Turkish counterparties, our net credit
exposure was $290 million. In addition, our total market
exposure to Turkey as of December 2021 was $105 million,
primarily to non-sovereign issuers or underliers. Such exposure
consisted of $179 million related to debt, $(156) million related
to credit derivatives and $82 million related to equities.
The potential for further sanctions on Russia has led toconcerns about its economic and financial stability. As of
December 2021, our total credit exposure to Russia was$650 million, substantially all of which was tonon-sovereign counterparties or borrowers. Such exposure
consisted of $134 million related to OTC derivatives,$177 million related to loans and lending commitments and$339 million related to secured receivables. After taking into
consideration the benefit of Russian corporate andsovereign collateral, and other risk mitigants provided by
Russian counterparties, our net credit exposure was$293 million. In addition, our total market exposure to
Russia as of December 2021 was $414 million, primarily tonon-sovereign issuers or underliers. Such exposure consistedof $258 million related to debt, $(531) million related tocredit derivatives and $687 million related to equities.
Liquidity pressures prompted the Argentine government todefault and restructure local and foreign obligations in
2020. Economic challenges persist and the country stillneeds to secure new financial terms with the IMF. As of
December 2021, our total credit exposure to Argentina was$102 million, which was to non-sovereign counterparties orborrowers, and was primarily related to loans and lending
commitments. In addition, our total market exposure toArgentina as of December 2021 was $91 million, primarily
to sovereign issuers or underliers. Such exposure consistedof $70 million related to debt, $(14) million related to credit
derivatives and $35 million related to equities.
Escalating geopolitical conflict has led to concerns about
Ukraine’s political and financial stability. As of
December 2021, our total credit exposure to Ukraine was
not material. Our total market exposure to Ukraine as ofDecember 2021 was $236 million, primarily to sovereignissuers or underliers. Such exposure consisted of$164 million related to debt, $30 million related to credit
derivatives and $42 million related to equities.
114 Goldman Sachs 2021 Form 10-K

Lebanon’s sovereign debt default and sharp currency
depreciation have led to concerns about its financial andpolitical stability. As of December 2021, our total credit
and market exposure to Lebanon was not material.
Zambia’s sovereign debt default and liquidity pressuresaggravated by the COVID-19 pandemic have led to concerns
about the country’s financial stability. As of December 2021, ourtotal credit and market exposure to Zambia was not material.
Venezuela has delayed payments on its sovereign debt andis experiencing deep economic and social crises. As of
December 2021, our total credit and market exposure to
Venezuela was not material.
Escalating political unrest in Ethiopia has led to concerns
about the country’s political, economic and financial
stability. As of December 2021, our total credit and market
exposure to Ethiopia was not material.
We have a comprehensive framework to monitor, measure
and assess our country exposures and to determine our risk
appetite. We determine the country of risk by the locationof the counterparty, issuer or underlier’s assets, where theygenerate revenue, the country in which they areheadquartered, the jurisdiction where a claim against them
could be enforced, and/or the government whose policies
affect their ability to repay their obligations. We monitor
our credit exposure to a specific country both at theindividual counterparty level, as well as at the aggregate
country level. See “Stress Tests” for information about
stress tests that are designed to estimate the direct andindirect impact of events involving the above countries.

Operational Risk Management
Overview
Operational risk is the risk of an adverse outcome resulting
from inadequate or failed internal processes, people,
systems or from external events. Our exposure tooperational risk arises from routine processing errors, aswell as extraordinary incidents, such as major systems
failures or legal and regulatory matters.
Potential types of loss events related to internal and external
operational risk include:‰ Execution, delivery and process management;‰ Business disruption and system failures;‰ Employment practices and workplace safety;‰ Clients, products and business practices;‰ Damage to physical assets;‰ Internal fraud; and‰ External fraud.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Operational Risk, which is independent of our revenueproducing units and reports to our chief risk officer, has
primary responsibility for developing and implementing aformalized framework for assessing, monitoring andmanaging operational risk with the goal of maintaining our
exposure to operational risk at levels that are within ourrisk appetite.
Operational Risk Management Process
Our process for managing operational risk includes thecritical components of our risk management frameworkdescribed in the “Overview and Structure of Risk
Management,” including a comprehensive data collection
process, as well as firmwide policies and procedures, for
operational risk events.
We combine top-down and bottom-up approaches tomanage and measure operational risk. From a top-down
perspective, our senior management assesses firmwide andbusiness-level operational risk profiles. From a bottom-up
perspective, our first and second lines of defense areresponsible for risk identification and risk management on
a day-to-day basis, including escalating operational risks
and risk events to senior management.
We maintain a comprehensive control framework designed
to provide a well-controlled environment to minimize
operational risks. The Firmwide Operational Risk andResilience Committee is responsible for overseeing
operational risk, and for ensuring our business andoperational resilience.
Our operational risk management framework is designed tocomply with the operational risk measurement rules under
the Capital Framework and has evolved based on thechanging needs of our businesses and regulatory guidance.
We have established policies that require all employees toreport and escalate operational risk events. When
operational risk events are identified, our policies requirethat the events be documented and analyzed to determine
whether changes are required in our systems and/or
processes to further mitigate the risk of future events.
We use operational risk management applications tocapture, analyze, aggregate and report operational risk
event data and key metrics. One of our key risk
identification and assessment tools is an operational risk
and control self-assessment process, which is performed byour managers. This process consists of the identification
and rating of operational risks, on a forward-looking basis,and the related controls. The results from this process areanalyzed to evaluate operational risk exposures andidentify businesses, activities or products with heightenedlevels of operational risk.

Risk Measurement
We measure our operational risk exposure using both
statistical modeling and scenario analyses, which involve
qualitative and quantitative assessments of internal andexternal operational risk event data and internal control
factors for each of our businesses. Operational risk
measurement also incorporates an assessment of businessenvironment factors, including:‰ Evaluations of the complexity of our business activities;‰ The degree of automation in our processes;‰ New activity information;‰ The legal and regulatory environment; and‰ Changes in the markets for our products and services,
including the diversity and sophistication of ourcustomers and counterparties.
The results from these scenario analyses are used tomonitor changes in operational risk and to determine
business lines that may have heightened exposure tooperational risk. These analyses are used in thedetermination of the appropriate level of operational risk
capital to hold. We also perform firmwide stress tests. See“Overview and Structure of Risk Management” for
information about firmwide stress tests.
Types of Operational Risks
Increased reliance on technology and third-party
relationships has resulted in increased operational risks,such as information and cyber security risk, third-party risk
and business resilience risk. We manage those risks asfollows:
Information and Cyber Security Risk. Information andcyber security risk is the risk of compromising theconfidentiality, integrity or availability of our data andsystems, leading to an adverse impact to us, our reputation,
our clients and/or the broader financial system. We seek tominimize the occurrence and impact of unauthorizedaccess, disruption or use of information and/or information
systems. We deploy and operate preventive and detective
controls and processes to mitigate emerging and evolving
information security and cyber security threats, including
monitoring our network for known vulnerabilities andsigns of unauthorized attempts to access our data andsystems. There is increased information risk throughdiversification of our data across external service providers,
including use of a variety of cloud-provided or -hosted
services and applications. See “Risk Factors” in Part I,
Item 1A of this Form 10-K for further information about
information and cyber security risk.

Goldman Sachs 2021 Form 10-K 115

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESManagement’s Discussion and Analysis
Third-Party Risk. Third-party risk, including vendor risk,
is the risk of an adverse impact due to reliance on third
parties performing services or activities on our behalf.
These risks may include legal, regulatory, information
security, reputational, operational or any other risks
inherent in engaging a third party. We identify, manage andreport key third-party risks and conduct due diligenceacross multiple risk domains, including information
security and cyber security, resilience and additional thirdparty dependencies. The Third-Party Risk Program
monitors, reviews and reassesses third-party risks on an
ongoing basis. See “Risk Factors” in Part I, Item 1A of thisForm 10-K for further information about third-party risk.
Business Resilience Risk. Business resilience risk is therisk of disruption to our critical processes. We monitor
threats and assess risks and seek to ensure our state ofreadiness in the event of a significant operational disruption
to the normal operations of our critical functions or theirdependencies, such as critical facilities, systems, third
parties, data and/or personnel. We approach BCP throughthe lens of business and operational resilience. The
resilience framework defines the fundamental principles for
BCP and crisis management to ensure that critical functions
can continue to operate in the event of a disruption. The
business continuity program is comprehensive, consistentfirmwide and up-to-date, incorporating new information,techniques and technologies as and when they become
available, and our resilience recovery plans incorporate andtest specific and measurable recovery time objectives inaccordance with local market best practices and regulatory
requirements, and under specific scenarios. See “Regulatory
and Other Matters — Other Matters” for information
about the impact of the COVID-19 pandemic. See“Business — Business Continuity and Information
Security” in Part I, Item 1 of this Form 10-K for further
information about business continuity.

Model Risk Management
Overview
Model risk is the potential for adverse consequences fromdecisions made based on model outputs that may beincorrect or used inappropriately. We rely on quantitativemodels across our business activities primarily to value
certain financial assets and liabilities, to monitor andmanage our risk, and to measure and monitor our
regulatory capital.
Model Risk, which is independent of our revenue-producing
units, model developers, model owners and model users, andreports to our chief risk officer, has primary responsibility forassessing, monitoring and managing our model risk throughfirmwide oversight across our global businesses, andprovides periodic updates to senior management, risk
committees and the Risk Committee of the Board.
116 Goldman Sachs 2021 Form 10-K

Our model risk management framework is managed
through a governance structure and risk management
controls, which encompass standards designed to ensure we
maintain a comprehensive model inventory, including risk
assessment and classification, sound model development
practices, independent review and model-specific usage
controls. The Firmwide Model Risk Control Committee
oversees our model risk management framework.
Model Review and Validation Process
Model Risk consists of quantitative professionals who
perform an independent review, validation and approval of
our models. This review includes an analysis of the model
documentation, independent testing, an assessment of theappropriateness of the methodology used, and verificationofcompliance
with
model
development
andimplementation standards.
We regularly refine and enhance our models to reflectchanges in market or economic conditions and our businessmix. All models are reviewed on an annual basis, and newmodels or significant changes to existing models and theirassumptions are approved prior to implementation.
The model validation process incorporates a review ofmodels and trade and risk parameters across a broad rangeof scenarios (including extreme conditions) in order tocritically evaluate and verify:‰ The model’s conceptual soundness, including thereasonableness of model assumptions, and suitability for
intended use;
‰ The testing strategy utilized by the model developers toensure that the models function as intended;‰ The suitability of the calculation techniques incorporated
in the model;‰ The model’s accuracy in reflecting the characteristics ofthe related product and its significant risks;‰ The model’s consistency with models for similar
products; and‰ The model’s sensitivity to input parameters andassumptions.
See “Critical Accounting Policies — Fair Value — Review
of Valuation Models,” “Liquidity Risk Management,”“Market Risk Management,” “Credit Risk Management”
and “Operational Risk Management” for further
information about our use of models within these areas.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Item 7A. Quantitative and Qualitative
Disclosures About Market Risk
Quantitative and qualitative disclosures about market risk
are set forth in “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — Risk
Management” in Part II, Item 7 of this Form 10-K.

Item 8. Financial Statements andSupplementary DataManagement’s Report on Internal Control
over Financial Reporting
Management of The Goldman Sachs Group, Inc., together
with its consolidated subsidiaries (the firm), is responsible
for establishing and maintaining adequate internal control
over financial reporting. The firm’s internal control overfinancial reporting is a process designed under thesupervision of the firm’s principal executive and principal
financial officers to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
the firm’s financial statements for external reporting
purposes in accordance with U.S. generally accepted
accounting principles.

Our internal control over financial reporting includes
policies and procedures that pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly
reflect transactions and dispositions of assets; provide
reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements inaccordance with U.S. generally accepted accounting
principles, and that receipts and expenditures are being
made only in accordance with authorizations ofmanagement and the directors of the firm; and provide
reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
the firm’s assets that could have a material effect on our
financial statements.
The firm’s internal control over financial reporting as ofDecember
31,
2021
has
been
auditedbyPricewaterhouseCoopers LLP (PCAOB ID 238), an
independent registered public accounting firm, as stated intheir report appearing on pages 118 to 120, which
expresses an unqualified opinion on the effectiveness of thefirm’s internal control over financial reporting as ofDecember 31, 2021.

As of December 31, 2021, management conducted anassessment of the firm’s internal control over financial
reporting based on the framework established in Internal
Control — Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on this assessment,
management has determined that the firm’s internal control
over financial reporting as of December 31, 2021 was
effective.

Goldman Sachs 2021 Form 10-K 117

Report of Independent Registered Public
Accounting Firm
To the Board of Directors and Shareholders of The
Goldman Sachs Group, Inc.:
Opinions on the Financial Statements and Internal
Control over Financial Reporting
We have audited the accompanying consolidated balance
sheets of The Goldman Sachs Group, Inc. and its
subsidiaries (the Company) as of December 31, 2021 and2020, and the related consolidated statements of earnings,
of comprehensive income, of changes in shareholders’equity and of cash flows for each of the three years in the
period ended December 31, 2021, including the related
notes (collectively referred to as the “consolidated financial
statements”). We also have audited the Company’s internal
control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control —Integrated Framework (2013) issued by the Committee ofSponsoring Organizations of the Treadway Commission(COSO).
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, thefinancial position of the Company as of December 31, 2021
and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended
December 31, 2021 in conformity with accounting
principles generally accepted in the United States ofAmerica. Also in our opinion, the Company maintained, inall material respects, effective internal control over financial
reporting as of December 31, 2021, based on criteria
established in Internal Control — Integrated Framework(2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 3 to the consolidated financial
statements, the Company changed the manner in which it
accounts for credit losses on certain financial instruments in
2020.

118 Goldman Sachs 2021 Form 10-K

Basis for Opinions
The Company’s management is responsible for these
consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its
assessment of the effectiveness of internal control overfinancial reporting, included in Management’s Report on
Internal Control over Financial Reporting appearing on
page 117. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the
Company’s internal control over financial reporting basedon our audits. We are a public accounting firm registeredwith the Public Company Accounting Oversight Board(United States) (PCAOB) and are required to be
independent with respect to the Company in accordancewith the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the standardsof the PCAOB. Those standards require that we plan andperform the audits to obtain reasonable assurance about
whether the consolidated financial statements are free ofmaterial misstatement, whether due to error or fraud, andwhether effective internal control over financial reporting
was maintained in all material respects.
Our audits of the consolidated financial statements
included performing procedures to assess the risks ofmaterial misstatement of the consolidated financial
statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding theamounts and disclosures in the consolidated financial
statements. Our audits also included evaluating theaccounting principles used and significant estimates madeby management, as well as evaluating the overall
presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included
obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design andoperating effectiveness of internal control based on theassessed risk. Our audits also included performing suchother procedures as we considered necessary in thecircumstances. We believe that our audits provide a
reasonable basis for our opinions.

Report of Independent Registered Public
Accounting Firm
Definition and Limitations of Internal Control overFinancial Reporting
A company’s internal control over financial reporting is aprocess designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation offinancial statements for external purposes in accordancewith generally accepted accounting principles. A company’s
internal control over financial reporting includes thosepolicies and procedures that (i) pertain to the maintenanceof records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of thecompany; (ii) provide reasonable assurance thattransactions are recorded as necessary to permit
preparation of financial statements in accordance withgenerally accepted accounting principles, and that receipts
and expenditures of the company are being made only inaccordance with authorizations of management anddirectors of the company; and (iii) provide reasonableassurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on thefinancial statements.
Because of its inherent limitations, internal control overfinancial reporting may not prevent or detect
misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in
conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are mattersarising from the current period audit of the consolidated
financial statements that were communicated or required tobe communicated to the audit committee and that (i) relate
to accounts or disclosures that are material to theconsolidated financial statements and (ii) involved ourespecially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alterin any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, bycommunicating the critical audit matters below, providing
separate opinions on the critical audit matters or on theaccounts or disclosures to which they relate.

Valuation of Certain Level 3 Financial Instruments
As described in Notes 4 through 10 to the consolidated
financial statements, as of December 31, 2021, theCompany carries financial instruments at fair value, which
includes $24.1 billion of financial assets and $29.2 billionof financial liabilities classified in Level 3 of the fair value
hierarchy, as one or more inputs to the financial
instrument’s valuation technique are significant andunobservable. Significant unobservable inputs used bymanagement to value certain of these Level 3 financial
instruments included (i) industry multiples and publiccomparables, (ii) credit spreads or (iii) correlation.
The principal considerations for our determination that
performing procedures relating to the valuation of thesecertain Level 3 financial instruments is a critical audit
matter are (i) the significant judgment by management invaluing the financial instruments, which in turn led to ahigh degree of auditor judgment, subjectivity, and effort inperforming procedures and evaluating audit evidence
related to the aforementioned significant unobservable
inputs used in the valuation of certain Level 3 financial
instruments, and (ii) the audit effort involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures andevaluating audit evidence in connection with forming ouroverall opinion on the consolidated financial statements.
These procedures included testing the effectiveness ofcontrols relating to the valuation of financial instruments,
including controls over the methods and significant
unobservable inputs used in the valuation of certain Level 3
financial instruments. These procedures also included,
among others, for a sample of financial instruments, theinvolvement of professionals with specialized skill andknowledge to assist in (i) developing an independent
estimate of fair value or (ii) testing management’s process todetermine the fair value of these financial instruments.
Developing the independent estimate involved (i) testing thecompleteness and accuracy of data provided bymanagement, (ii) evaluating and utilizing management’s
significant unobservable inputs or developing independentsignificant unobservable inputs, and (iii) comparing
management’s estimate to the independently developed
estimate of fair value. Testing management’s processincluded evaluating the reasonableness of theaforementioned significant unobservable inputs, evaluating
the appropriateness of the techniques used, and testing thecompleteness and accuracy of data used by management todetermine the fair value of these instruments.

Goldman Sachs 2021 Form 10-K 119

Report of Independent Registered Public
Accounting Firm
Allowance for Loan Losses — Wholesale Loan Portfolio
As described in Note 9 to the consolidated financial
statements, the Company’s allowance for loan losses for thewholesale loan portfolio reflects management’s estimate ofloan losses over the remaining expected life of the loans andalso considers forecasts of future economic conditions. As
of December 31, 2021, $2.1 billion of the allowance forloan losses and $131.6 billion of the loans accounted for atamortized cost related to the wholesale loan portfolio. The
allowance for loan losses for the wholesale loan portfolio ismeasured on a collective basis for loans that exhibit similarrisk characteristics using a modeled approach and assetspecific basis for loans that do not share similar risk
characteristics. In addition, it includes qualitative
components to reflect the uncertain nature of economic
forecasting, capture uncertainty regarding model inputs,
and account for model imprecision and concentration risk.
The wholesale models determine the probability of default
and loss given default based on various risk factors,
including internal credit ratings, industry default and loss
data, expected life, macroeconomic indicators, theborrower’s capacity to meet its financial obligations, theborrower’s country of risk and industry, loan seniority andcollateral type. The most significant inputs to the forecast
model for wholesale loans include forecasted U.S.
unemployment rates, GDP, credit spreads, commercial andindustrial delinquency rates, short- and long-term interest
rates, and oil prices.
The principal considerations for our determination that
performing procedures relating to the allowance for loan
losses for the wholesale loan portfolio is a critical audit
matter are (i) the significant judgment and estimation by
management in the determinations of internal credit ratings
and the forecasted U.S. unemployment rates, which in turnled to a high degree of auditor judgment, subjectivity, andeffort in performing procedures and evaluating audit
evidence related to management’s determinations, and(ii) the audit effort involved the use of professionals withspecialized skill and knowledge.

120 Goldman Sachs 2021 Form 10-K

Addressing the matter involved performing procedures andevaluating audit evidence in connection with forming ouroverall opinion on the consolidated financial statements.
These procedures included testing the effectiveness ofcontrols relating to the Company’s allowance for loan
losses for the wholesale loan portfolio, including controls
over the model, certain data, and significant assumptions.
These procedures also included, among others, testing
management’s process for estimating the allowance for loan
losses for the wholesale loan portfolio using a modeled
approach, which involved evaluating the appropriateness ofthe methodology and testing the completeness and accuracyof certain data used in estimating the allowance for loan
losses. The procedures also involved the use of
professionals with specialized skill and knowledge to assistin evaluating (i) the appropriateness of the model andmethodology and (ii) the reasonableness of the internal
credit ratings and the forecasted U.S. unemployment rates
used in estimating the allowance for loan losses for thewholesale loan portfolio.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 24, 2022
We have served as the Company’s auditor since 1922.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings
Year Ended December
2021

2020

2019

Revenues
Investment banking
Investment management
Commissions and fees
Market making
Other principal transactions
Total non-interest revenues

in millions, except per share amounts$14,168
8,059
3,619
15,352
11,671
52,869$ 9,141
6,923
3,548
15,546
4,651
39,809$ 6,7986,189
2,988
10,157
6,052
32,184

Interest income
Interest expense
Net interest income
Total net revenues

12,1205,650
6,470
59,33913,6898,938
4,751
44,56021,73817,376
4,362
36,546

357

3,098

1,065

Operating expenses
Compensation and benefits
Transaction based
Market development
Communications and technology
Depreciation and amortization
Occupancy
Professional fees
Other expenses
Total operating expenses

17,719
4,710
553
1,573
2,015
981
1,648
2,739
31,93813,309
4,141
401
1,347
1,902
960
1,306
5,617
28,983

12,353
3,513
739
1,167
1,704
1,029
1,316
3,077
24,898Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings applicable to common shareholders

27,044
5,409
21,635484$21,151

12,479
3,020
9,459
544
$ 8,915

10,583
2,117
8,466
569
$ 7,897

Earnings per common share
Basic
Diluted$ 60.25$ 59.45$ 24.94$ 24.74$ 21.18$ 21.03

350.5
355.8

356.4
360.3

371.6
375.5

Provision for credit losses

Average common shares
Basic
DilutedConsolidated Statements of Comprehensive Income
Year Ended December$ in millions

Net earnings
Other comprehensive income/(loss) adjustments, net of tax:
Currency translation
Debt valuation adjustment
Pension and postretirement liabilities
Available-for-sale securities
Other comprehensive income/(loss)
Comprehensive income

2021

2020

2019

$21,635$ 9,459$ 8,466

(42)
322
41
(955)
(634)
$21,001

(80)
(261)
(26)
417
50
$ 9,5095(2,079)(261)
158(2,177)$ 6,289

The accompanying notes are an integral part of these consolidated financial statements.

Goldman Sachs 2021 Form 10-K 121

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets
As of December$ in millions

AssetsCash and cash equivalents
Collateralized agreements:
Securities purchased under agreements to resell (at fair value)
Securities borrowed (includes $39,955 and $28,898 at fair value)
Customer and other receivables (includes $42 and $82 at fair value)
Trading assets (at fair value and includes $68,208 and $69,031 pledged as collateral)
Investments (includes $83,427 and $82,778 at fair value, and $12,840 and $13,375 pledged as collateral)
Loans (net of allowance of $3,573 and $3,874, and includes $10,769 and $13,625 at fair value)
Other assets
Total assets
Liabilities and shareholders’ equity
Deposits (includes $35,425 and $16,176 at fair value)
Collateralized financings:
Securities sold under agreements to repurchase (at fair value)
Securities loaned (includes $9,170 and $1,053 at fair value)
Other secured financings (includes $17,074 and $24,126 at fair value)
Customer and other payables
Trading liabilities (at fair value)
Unsecured short-term borrowings (includes $29,832 and $26,750 at fair value)
Unsecured long-term borrowings (includes $52,390 and $40,911 at fair value)
Other liabilities (includes $359 and $263 at fair value)
Total liabilities

2021

2020

$ 261,036 $ 155,842
205,703108,060
178,771
142,160
160,673
121,331375,916
393,630
88,71988,445
158,562
116,115
34,60837,445$1,463,988 $1,163,028$ 364,227 $ 259,962
165,883
126,571
46,505
21,621
18,54425,755251,931
190,658
181,424
153,727
46,95552,870254,092
213,481
24,501
22,451
1,354,062 1,067,096

Commitments, contingencies and guarantees
Shareholders’ equity
Preferred stock; aggregate liquidation preference of $10,703 and $11,203
10,703
11,203
Common stock; 906,430,314 and 901,692,039 shares issued, and 333,573,254 and 344,088,725 shares outstanding
9
9
Share-based awards
4,211
3,468
Nonvoting common stock; no shares issued and outstanding––
Additional paid-in capital
56,39655,679Retained earnings
131,811
112,947
Accumulated other comprehensive loss
(2,068)(1,434)
Stock held in treasury, at cost; 572,857,062 and 557,603,316 shares(91,136)(85,940)
Total shareholders’ equity
109,926
95,932
Total liabilities and shareholders’ equity$1,463,988 $1,163,028

The accompanying notes are an integral part of these consolidated financial statements.

122 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity
Year Ended December$ in millions

Preferred stock
Beginning balanceIssuedRedeemedEnding balanceCommon stock
Beginning balanceIssuedEnding balance
Share-based awards
Beginning balance
Issuance and amortization of share-based awards
Delivery of common stock underlying share-based awards
Forfeiture of share-based awards
Ending balance
Additional paid-in capital
Beginning balance
Delivery of common stock underlying share-based awards
Cancellation of share-based awards in satisfaction of withholding tax requirements
Issuance costs of redeemed preferred stock
Other
Ending balance
Retained earnings
Beginning balance, as previously reported
Cumulative effect of change in accounting principle for:
Current expected credit losses, net of tax
Leases, net of tax
Beginning balance, adjusted
Net earnings
Dividends and dividend equivalents declared on common stock and share-based awards
Dividends declared on preferred stock
Preferred stock redemption premiumEnding balance
Accumulated other comprehensive income/(loss)
Beginning balance
Other comprehensive income/(loss)
Ending balance
Stock held in treasury, at cost
Beginning balance
Repurchased
Reissued
Other
Ending balance
Total shareholders’ equity

2021

2020

2019

$ 11,203
2,175(2,675)
10,703$ 11,203
350(350)
11,203$ 11,203
1,100(1,100)
11,203

9
–
9

9
–
9

9
–
9

3,468
2,527
(1,626)
(158)
4,211

3,195
1,967
(1,601)
(93)
3,468

2,845
2,073
(1,623)
(100)
3,195

55,679
1,678
(984)
24
(1)
56,39654,883
1,619
(829)
–
6
55,67954,005
1,617
(743)
4
–
54,883112,947

106,465

100,100––
112,947
21,635(2,287)(443)(41)
131,811(638)–
105,827
9,459(1,795)(543)(1)
112,947–
12
100,1128,466(1,544)(560)(9)
106,465(1,434)(634)(2,068)(1,484)50(1,434)693(2,177)(1,484)(85,940)(5,200)11(7)(91,136)$109,926(84,006)(1,928)11(17)(85,940)$ 95,932(78,670)(5,335)12(13)(84,006)$ 90,265

The accompanying notes are an integral part of these consolidated financial statements.

Goldman Sachs 2021 Form 10-K 123

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows
Year Ended December$ in millions

2021

Cash flows from operating activities
Net earnings$ 21,635
Adjustments to reconcile net earnings to net cash provided by/(used for) operating activities:
Depreciation and amortization
2,015
Deferred income taxes
5
Share-based compensation
2,348
Gain related to extinguishment of unsecured borrowings–
Provision for credit losses
357
Changes in operating assets and liabilities:
Customer and other receivables and payables, net
21,971
Collateralized transactions (excluding other secured financings), net(70,058)
Trading assets
15,232
Trading liabilities
26,616Loans held for sale, net(5,556)
Other, net(13,644)
Net cash provided by/(used for) operating activities
921
Cash flows from investing activities
Purchase of property, leasehold improvements and equipment(4,667)
Proceeds from sales of property, leasehold improvements and equipment
3,933
Net cash used for business acquisitions–
Purchase of investments(39,912)
Proceeds from sales and paydowns of investments
45,701Loans (excluding loans held for sale), net(35,520)
Net cash used for investing activities(30,465)
Cash flows from financing activities
Unsecured short-term borrowings, net
2,137
Other secured financings (short-term), net(1,320)
Proceeds from issuance of other secured financings (long-term)
4,795
Repayment of other secured financings (long-term), including the current portion(6,590)Purchase of Trust Preferred securities–
Proceeds from issuance of unsecured long-term borrowings
92,717
Repayment of unsecured long-term borrowings, including the current portion(52,608)
Derivative contracts with a financing element, net
1,121
Deposits, net
103,538
Preferred stock redemption(2,675)
Common stock repurchased(5,200)
Settlement of share-based awards in satisfaction of withholding tax requirements(985)
Dividends and dividend equivalents paid on common stock, preferred stock and share-based awards(2,725)
Proceeds from issuance of preferred stock, net of issuance costs
2,172
Other financing, net
361
Net cash provided by financing activities
134,738
Net increase in cash and cash equivalents
105,194
Cash and cash equivalents, beginning balance
155,842
Cash and cash equivalents, ending balance$261,036
Supplemental disclosures:
Cash payments for interest, net of capitalized interest
Cash payments for income taxes, net
See Notes 12 and 16 for information about non-cash activities.

The accompanying notes are an integral part of these consolidated financial statements.

124 Goldman Sachs 2021 Form 10-K

$
$

5,521
6,195

2020

$

9,459

2019

$

8,466

1,902
(833)
1,920
(1)
3,098

1,704
(334)
2,018
(20)
1,065

(30,895)(13,007)(33,405)
44,892
1,820
1,322(13,728)(7,693)
94,991(68,682)(231)(1,458)(5,958)23,868(6,309)2,970(231)(48,670)
29,057(11,173)(34,356)(8,443)
6,632(803)(29,773)
17,812(9,661)(24,236)

7,707
2,861
8,073
(4,137)(11)
47,250(55,040)
1,037
67,343(350)(1,928)(830)(2,336)349
392
70,38022,296
133,546$155,842

14(2,050)7,257(7,468)(206)
22,381(43,936)
3,952
31,214(1,100)(5,335)(745)(2,104)
1,098
395
3,367
2,999
130,547$133,546$$$ 18,645$ 1,266

9,091
2,754

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 1.

Description of Business
The Goldman Sachs Group, Inc. (Group Inc. or parent
company), a Delaware corporation, together with its
consolidated subsidiaries (collectively, the firm), is a leading
global financial institution that delivers a broad range offinancial services across investment banking, securities,
investment management and consumer banking to a large
and diversified client base that includes corporations,financial institutions, governments and individuals.
Founded in 1869, the firm is headquartered in New Yorkand maintains offices in all major financial centers aroundthe world.
The firm reports its activities in four business segments:
Investment Banking
The firm provides a broad range of investment banking
services to a diverse group of corporations, financial
institutions, investment funds and governments. Services
include strategic advisory assignments with respect tomergers and acquisitions, divestitures, corporate defense
activities, restructurings and spin-offs, and equity and debt
underwriting of public offerings and private placements.
The firm also provides lending to corporate clients,
including relationship lending, middle-market lending andacquisition financing. The firm also provides transaction
banking services to certain corporate clients.
Global Markets
The firm facilitates client transactions and makes markets
in fixed income, equity, currency and commodity productswith institutional clients, such as corporations, financial
institutions, investment funds and governments. The firm
also makes markets in and clears institutional clienttransactions on major stock, options and futures exchanges
worldwide and provides prime brokerage and other equities
financing activities, including securities lending, margin
lending and swaps. The firm also provides financing toclients through securities purchased under agreements toresell (resale agreements), and through structured credit,
warehouse and asset-backed lending.

Asset Management
The firm manages assets and offers investment products(primarily through separately managed accounts andcommingled vehicles, such as mutual funds and private
investment funds) across all major asset classes to a diverse
set of institutional clients and a network of third-party
distributors around the world. The firm makes equity
investments, which include alternative investing activities
related to public and private equity investments incorporate, real estate and infrastructure assets, as well as
investments through consolidated investment entities,
substantially all of which are engaged in real estate
investment activities. The firm also invests in corporate
debt and provides financing for real estate and other assets.
Consumer & Wealth Management
The firm provides investing and wealth advisory solutions,
including financial planning and counseling, executing
brokerage transactions and managing assets for individuals
in its wealth management business. The firm also provides
loans, accepts deposits and provides investing services
through its consumer banking digital platform, Marcus byGoldman Sachs, and through its private bank, as well as
issues credit cards to consumers.
Note 2.

Basis of Presentation
These consolidated financial statements are prepared inaccordance with accounting principles generally accepted in
the United States (U.S. GAAP) and include the accounts ofGroup Inc. and all other entities in which the firm has acontrolling financial interest. Intercompany transactions
and balances have been eliminated.
All references to 2021, 2020 and 2019 refer to the firm’s
years ended, or the dates, as the context requires,
December 31, 2021, December 31, 2020 and
December 31, 2019, respectively. Any reference to a futureyear refers to a year ending on December 31 of that year.
Certain reclassifications have been made to previously
reported amounts to conform to the current presentation.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 3.

Significant Accounting Policies
The firm’s significant accounting policies include when andhow to measure the fair value of assets and liabilities,
measuring the allowance for credit losses on loans andlending commitments accounted for at amortized cost, andwhen to consolidate an entity. See Note 4 for policies onfair value measurements, Note 9 for policies on theallowance for credit losses, and below and Note 17 forpolicies on consolidation accounting. All other significant
accounting policies are either described below or includedin the following footnotes:
Fair Value Measurements

Note 4

Trading Assets and Liabilities

Note 5

Trading Cash Instruments

Note 6

Derivatives and Hedging Activities

Note 7

Investments

Note 8Loans

Note 9Fair Value Option

Note 10

Collateralized Agreements and Financings

Note 11

Other Assets

Note 12

Deposits

Note 13

Unsecured Borrowings

Note 14

Other Liabilities

Note 15

Securitization Activities

Note 16

Variable Interest Entities

Note 17

Commitments, Contingencies and Guarantees

Note 18

Shareholders’ Equity

Note 19

Regulation and Capital Adequacy

Note 20

Earnings Per Common Share

Note 21Transactions with Affiliated Funds

Note 22

Interest Income and Interest Expense

Note 23

Income Taxes

Note 24

Business Segments

Note 25

Credit Concentrations

Note 26

Legal Proceedings

Note 27

Employee Benefit Plans

Note 28

Employee Incentive Plans

Note 29

Parent Company

Note 30

126 Goldman Sachs 2021 Form 10-K

Consolidation
The firm consolidates entities in which the firm has acontrolling financial interest. The firm determines whether
it has a controlling financial interest in an entity by firstevaluating whether the entity is a voting interest entity or avariable interest entity (VIE).
Voting Interest Entities. Voting interest entities areentities in which (i) the total equity investment at risk is
sufficient to enable the entity to finance its activities
independently and (ii) the equity holders have the power todirect the activities of the entity that most significantly
impact its economic performance, the obligation to absorb
the losses of the entity and the right to receive the residual
returns of the entity. The usual condition for a controlling
financial interest in a voting interest entity is ownership of amajority voting interest. If the firm has a controllingmajority voting interest in a voting interest entity, the entity
is consolidated.
Variable Interest Entities. A VIE is an entity that lacks
one or more of the characteristics of a voting interest entity.
The firm has a controlling financial interest in a VIE when
the firm has a variable interest or interests that provide itwith (i) the power to direct the activities of the VIE thatmost significantly impact the VIE’s economic performanceand (ii) the obligation to absorb losses of the VIE or theright to receive benefits from the VIE that could potentiallybe significant to the VIE. See Note 17 for further
information about VIEs.
Equity-Method Investments. When the firm does nothave a controlling financial interest in an entity but canexert significant influence over the entity’s operating andfinancial policies, the investment is generally accounted forat fair value by electing the fair value option available under
U.S. GAAP. Significant influence generally exists when thefirm owns 20% to 50% of the entity’s common stock or
in-substance common stock.
In certain cases, the firm applies the equity method of
accounting to new investments that are strategic in natureor closely related to the firm’s principal business activities,
when the firm has a significant degree of involvement in the
cash flows or operations of the investee or when costbenefit considerations are less significant. See Note 8 forfurther information about equity-method investments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Investment Funds. The firm has formed investment fundswith third-party investors. These funds are typicallyorganized as limited partnerships or limited liability
companies for which the firm acts as general partner ormanager. Generally, the firm does not hold a majority ofthe economic interests in these funds. These funds areusually voting interest entities and generally are notconsolidated because third-party investors typically haverights to terminate the funds or to remove the firm as
general partner or manager. Investments in these funds are
generally measured at net asset value (NAV) and areincluded in investments. See Notes 8, 18 and 22 for further
information about investments in funds.
Use of Estimates
Preparation of these consolidated financial statements
requires management to make certain estimates andassumptions, the most important of which relate to fairvalue measurements, the allowance for credit losses onloans and lending commitments accounted for at amortized
cost, accounting for goodwill and identifiable intangible
assets, provisions for losses that may arise from litigation
and regulatory proceedings (including governmental
investigations), and accounting for income taxes. Theseestimates and assumptions are based on the best available
information but actual results could be materially different.
Revenue Recognition
Financial Assets and Liabilities at Fair Value. Trading
assets and liabilities and certain investments are carried atfair value either under the fair value option or in accordancewith other U.S. GAAP. In addition, the firm has elected toaccount for certain of its loans and other financial assets
and liabilities at fair value by electing the fair value option.
The fair value of a financial instrument is the amount thatwould be received to sell an asset or paid to transfer aliability in an orderly transaction between market
participants at the measurement date. Financial assets aremarked to bid prices and financial liabilities are marked tooffer prices. Fair value measurements do not include
transaction costs. Fair value gains or losses are generally
included in market making or other principal transactions.
See Note 4 for further information about fair value
measurements.

Revenue from Contracts with Clients. The firm
recognizes revenue earned from contracts with clients forservices, such as investment banking, investment
management, and execution and clearing (contracts withclients), when the performance obligations related to theunderlying transaction are completed.
Revenues from contracts with clients represent
approximately 45% of total non-interest revenues for both2021 and 2020 (including approximately 90% ofinvestment banking revenues, approximately 95% ofinvestment management revenues and all commissions andfees), and approximately 45% of total non-interest
revenues for 2019 (including approximately 85% ofinvestment banking revenues, approximately 95% ofinvestment management revenues and all commissions andfees). See Note 25 for information about net revenues bybusiness segment.
Investment Banking
Advisory. Fees from financial advisory assignments arerecognized in revenues when the services related to theunderlying transaction are completed under the terms of theassignment. Non-refundable deposits and milestone
payments in connection with financial advisory
assignments are recognized in revenues upon completion of
the underlying transaction or when the assignment isotherwise concluded.
Expenses associated with financial advisory assignments
are recognized when incurred and are included intransaction based expenses. Client reimbursements for such
expenses are included in investment banking revenues.
Underwriting. Fees from underwriting assignments arerecognized in revenues upon completion of the underlying
transaction based on the terms of the assignment.
Expenses associated with underwriting assignments are
generally deferred until the related revenue is recognized or
the assignment is otherwise concluded. Such expenses areincluded in transaction based expenses for completed
assignments.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Investment Management
The firm earns management fees and incentive fees forinvestment management services, which are included ininvestment management revenues. The firm makes
payments to brokers and advisors related to the placementof the firm’s investment funds (distribution fees), which areincluded in transaction based expenses.
Management Fees. Management fees for mutual funds
are calculated as a percentage of daily net asset value andare received monthly. Management fees for hedge funds
and separately managed accounts are calculated as apercentage of month-end net asset value and are generally
received quarterly. Management fees for private equity
funds are calculated as a percentage of monthly invested
capital or committed capital and are received quarterly,
semi-annually or annually, depending on the fund.
Management fees are recognized over time in the period theservices are provided.
Distribution fees paid by the firm are calculated based oneither a percentage of the management fee, the investment
fund’s net asset value or the committed capital. Such fees
are included in transaction based expenses.
Incentive Fees. Incentive fees are calculated as apercentage of a fund’s or separately managed account’s
return, or excess return above a specified benchmark orother performance target. Incentive fees are generally basedon investment performance over a twelve-month period orover the life of a fund. Fees that are based on performanceover a twelve-month period are subject to adjustment prior
to the end of the measurement period. For fees that are
based on investment performance over the life of the fund,future investment underperformance may require fees
previously distributed to the firm to be returned to the fund.
Incentive fees earned from a fund or separately managed
account are recognized when it is probable that a significant
reversal of such fees will not occur, which is generally whensuch fees are no longer subject to fluctuations in the market
value of investments held by the fund or separately
managed account. Therefore, incentive fees recognized
during the period may relate to performance obligations
satisfied in previous periods.

128 Goldman Sachs 2021 Form 10-K

Commissions and Fees
The firm earns commissions and fees from executing andclearing client transactions on stock, options and futures
markets, as well as over-the-counter (OTC) transactions.
Commissions and fees are recognized on the day the trade is
executed. The firm also provides third-party researchservices to clients in connection with certain soft-dollar
arrangements. Third-party research costs incurred by thefirm in connection with such arrangements are presented
net within commissions and fees.
Remaining Performance Obligations
Remaining performance obligations are services that thefirm has committed to perform in the future in connection
with its contracts with clients. The firm’s remaining
performance obligations are generally related to its
financial advisory assignments and certain investment
management activities. Revenues associated with remaining
performance obligations relating to financial advisory
assignments cannot be determined until the outcome of thetransaction. For the firm’s investment management
activities, where fees are calculated based on the net asset
value of the fund or separately managed account, future
revenues associated with such remaining performanceobligations cannot be determined as such fees are subject tofluctuations in the market value of investments held by thefund or separately managed account.
The firm is able to determine the future revenues associatedwith management fees calculated based on committed
capital. As of December 2021, substantially all future net
revenues associated with such remaining performanceobligations will be recognized through 2029. Annual
revenues associated with such performance obligations
average less than $250 million through 2029.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when
the firm has relinquished control over the assets transferred.
For transfers of financial assets accounted for as sales, any
gains or losses are recognized in net revenues. Assets or
liabilities that arise from the firm’s continuing involvementwith transferred financial assets are initially recognized atfair value. For transfers of financial assets that are notaccounted for as sales, the assets are generally included in
trading assets and the transfer is accounted for as acollateralized financing, with the related interest expense
recognized over the life of the transaction. See Note 11 forfurther information about transfers of financial assets
accounted for as collateralized financings and Note 16 forfurther information about transfers of financial assets
accounted for as sales.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Cash and Cash Equivalents
The firm defines cash equivalents as highly liquid overnight
deposits held in the ordinary course of business. Cash andcash equivalents included cash and due from banks of$10.14 billion as of December 2021 and $11.95 billion asof December 2020. Cash and cash equivalents also included
interest-bearing deposits with banks of $250.90 billion asof December 2021 and $143.89 billion as ofDecember 2020.
The firm segregates cash for regulatory and other purposes
related to client activity. Cash and cash equivalents
segregated for regulatory and other purposes were
$24.87 billion as of December 2021 and $24.52 billion asof December 2020. In addition, the firm segregatessecurities for regulatory and other purposes related to client
activity. See Note 11 for further information about
segregated securities.
Customer and Other Receivables
Customer and other receivables included receivables from
customers and counterparties of $103.82 billion as ofDecember 2021 and $82.39 billion as of December 2020,
and receivables from brokers, dealers and clearingorganizations of $56.85 billion as of December 2021 and$38.94 billion as of December 2020. Such receivables
primarily consist of customer margin loans, receivables
resulting from unsettled transactions and collateral posted
in connection with certain derivative transactions.
Substantially all of these receivables are accounted for atamortized cost net of any allowance for credit losses, which
generally approximates fair value. As these receivables are
not accounted for at fair value, they are not included in thefirm’s fair value hierarchy in Notes 4 through 10. Had thesereceivables been included in the firm’s fair value hierarchy,
substantially all would have been classified in level 2 as ofboth December 2021 and December 2020. See Note 10 for
further information about customer and other receivables
accounted for at fair value under the fair value option.
Interest on customer and other receivables is recognizedover the life of the transaction and included in interest
income.
Customer and other receivables includes receivables fromcontracts with clients and contract assets. Contract assets
represent the firm’s right to receive consideration forservices provided in connection with its contracts withclients for which collection is conditional and not merely
subject to the passage of time. The firm’s receivables fromcontracts with clients were $3.01 billion as ofDecember 2021 and $2.60 billion as of December 2020. Asof both December 2021 and December 2020 contract assets
were not material.

Customer and Other Payables
Customer and other payables included payables tocustomers and counterparties of $241.93 billion as ofDecember 2021 and $183.57 billion as of December 2020,and payables to brokers, dealers and clearing organizationsof $10.00 billion as of December 2021 and $7.09 billion asof December 2020. Such payables primarily consist ofcustomer credit balances related to the firm’s prime
brokerage activities. Customer and other payables areaccounted for at cost plus accrued interest, which generally
approximates fair value. As these payables are notaccounted for at fair value, they are not included in thefirm’s fair value hierarchy in Notes 4 through 10. Had thesepayables been included in the firm’s fair value hierarchy,
substantially all would have been classified in level 2 as ofboth December 2021 and December 2020. Interest on
customer and other payables is recognized over the life of
the transaction and included in interest expense.
Offsetting Assets and Liabilities
To reduce credit exposures on derivatives and securities
financing transactions, the firm may enter into masternetting agreements or similar arrangements (collectively,
netting agreements) with counterparties that permit it tooffset receivables and payables with such counterparties. A
netting agreement is a contract with a counterparty that
permits net settlement of multiple transactions with thatcounterparty, including upon the exercise of terminationrights by a non-defaulting party. Upon exercise of suchtermination rights, all transactions governed by the netting
agreement are terminated and a net settlement amount iscalculated. In addition, the firm receives and posts cash andsecurities collateral with respect to its derivatives andsecurities financing transactions, subject to the terms of therelated credit support agreements or similar arrangements(collectively, credit support agreements). An enforceablecredit support agreement grants the non-defaulting party
exercising termination rights the right to liquidate thecollateral and apply the proceeds to any amounts owed. Inorder to assess enforceability of the firm’s right of setoff
under netting and credit support agreements, the firm
evaluates various factors, including applicable bankruptcy
laws, local statutes and regulatory provisions in thejurisdiction of the parties to the agreement.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Derivatives are reported on a net-by-counterparty basis(i.e., the net payable or receivable for derivative assets andliabilities for a given counterparty) in the consolidatedbalance sheets when a legal right of setoff exists under anenforceable netting agreement. Resale agreements andsecurities sold under agreements to repurchase (repurchaseagreements) and securities borrowed and loaned
transactions with the same term and currency are presented
on a net-by-counterparty basis in the consolidated balance
sheets when such transactions meet certain settlement
criteria and are subject to netting agreements.
In the consolidated balance sheets, derivatives are reported
net of cash collateral received and posted under enforceablecredit support agreements, when transacted under anenforceable netting agreement. In the consolidated balance
sheets, resale and repurchase agreements, and securities
borrowed and loaned, are not reported net of the related
cash and securities received or posted as collateral. See
Note 11 for further information about collateral received
and pledged, including rights to deliver or repledge
collateral. See Notes 7 and 11 for further information about
offsetting assets and liabilities.
Foreign Currency Translation
Assets and liabilities denominated in non-U.S. currencies
are translated at rates of exchange prevailing on the date of
the consolidated balance sheets and revenues and expenses
are translated at average rates of exchange for the period.
Foreign currency remeasurement gains or losses ontransactions in nonfunctional currencies are recognized inearnings. Gains or losses on translation of the financial
statements of a non-U.S. operation, when the functional
currency is other than the U.S. dollar, are included, net ofhedges and taxes, in the consolidated statements ofcomprehensive income.
Recent Accounting Developments
Measurement of Credit Losses on Financial
Instruments (ASC 326). In June 2016, the FASB issued
ASU No. 2016-13, “Financial Instruments — Credit Losses(Topic 326) — Measurement of Credit Losses on Financial
Instruments.” This ASU amends several aspects of themeasurement of credit losses on certain financial
instruments, including replacing the existing incurred credit
loss model and other models with the Current Expected
Credit Losses (CECL) model and amending certain aspectsof accounting for purchased financial assets withdeterioration in credit quality since origination.

130 Goldman Sachs 2021 Form 10-K

The firm adopted this ASU in January 2020 under amodified retrospective approach. As a result of adopting
this ASU, the firm’s allowance for credit losses on financial
assets and commitments that are measured at amortizedcost reflects management’s estimate of credit losses over theremaining expected life of such assets. Expected credit
losses for newly recognized financial assets andcommitments, as well as changes to expected credit losses
during the period, are recognized in earnings. These
expected credit losses are measured based on historicalexperience, current conditions and forecasts that affect thecollectability of the reported amount.
The cumulative effect of measuring the allowance under
CECL as a result of adopting this ASU as ofJanuary 1, 2020 was an increase in the allowance for credit
losses of $848 million. The increase in the allowance isdriven by the fact that the allowance under CECL covers
expected credit losses over the full expected life of the loan
portfolios and also takes into account forecasts of expected
future economic conditions. In addition, in accordance with
the ASU, the firm elected the fair value option for loans thatwere previously accounted for as Purchased Credit
Impaired (PCI), which resulted in a decrease to theallowance for PCI loans of $169 million. The cumulative
effect of adopting this ASU was a decrease to retained
earnings of $638 million (net of tax).
Facilitation of the Effects of Reference Rate Reform on
Financial Reporting (ASC 848). In March 2020, the FASB
issued ASU No. 2020-04, “Reference Rate Reform —Facilitation of the Effects of Reference Rate Reform on
Financial Reporting.” This ASU provides optional relief
from applying generally accepted accounting principles tocontracts, hedging relationships and other transactions
affected by reference rate reform. In addition, in
January 2021 the FASB issued ASU No. 2021-01,“Reference Rate Reform — Scope,” which clarified thescope of ASC 848 relating to contract modifications. The
firm adopted these ASUs upon issuance and elected to apply
the relief available to certain modified derivatives. The
adoption of these ASUs did not have a material impact on
the firm’s consolidated financial statements.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 4.

Fair Value Measurements
The fair value of a financial instrument is the amount thatwould be received to sell an asset or paid to transfer aliability in an orderly transaction between market
participants at the measurement date. Financial assets aremarked to bid prices and financial liabilities are marked tooffer prices. Fair value measurements do not include
transaction costs. The firm measures certain financial assets
and liabilities as a portfolio (i.e., based on its net exposure
to market and/or credit risks).
The best evidence of fair value is a quoted price in an active
market. If quoted prices in active markets are not available,
fair value is determined by reference to prices for similar
instruments, quoted prices or recent transactions in lessactive markets, or internally developed models thatprimarily use market-based or independently sourced
inputs, including, but not limited to, interest rates,
volatilities, equity or debt prices, foreign exchange rates,
commodity prices, credit spreads and funding spreads (i.e.,the spread or difference between the interest rate at which aborrower could finance a given financial instrument relative
to a benchmark interest rate).
U.S. GAAP has a three-level hierarchy for disclosure of fairvalue measurements. This hierarchy prioritizes inputs to thevaluation techniques used to measure fair value, giving thehighest priority to level 1 inputs and the lowest priority tolevel 3 inputs. A financial instrument’s level in thishierarchy is based on the lowest level of input that issignificant to its fair value measurement. In evaluating thesignificance of a valuation input, the firm considers, among
other factors, a portfolio’s net risk exposure to that input.
The fair value hierarchy is as follows:
Level 1. Inputs are unadjusted quoted prices in active
markets to which the firm had access at the measurement
date for identical, unrestricted assets or liabilities.
Level 2. Inputs to valuation techniques are observable,
either directly or indirectly.
Level 3. One or more inputs to valuation techniques are
significant and unobservable.

The fair values for substantially all of the firm’s financial
assets and liabilities are based on observable prices andinputs and are classified in levels 1 and 2 of the fair value
hierarchy. Certain level 2 and level 3 financial assets andliabilities may require valuation adjustments that a market
participant would require to arrive at fair value for factors,
such as counterparty and the firm’s credit quality, funding
risk, transfer restrictions, liquidity and bid/offer spreads.
Valuation adjustments are generally based on market
evidence.
The valuation techniques and nature of significant inputs
used to determine the fair value of the firm’s financial
instruments are described below. See Notes 5 through 10
for further information about significant unobservable
inputs used to value level 3 financial instruments.
Valuation Techniques and Significant Inputs for
Trading Cash Instruments, Investments and Loans
Level 1. Level 1 instruments include U.S. government
obligations, most non-U.S. government obligations, certain
agency obligations, certain corporate debt instruments,
certain money market instruments and actively traded listed
equities. These instruments are valued using quoted prices
for identical unrestricted instruments in active markets. The
firm defines active markets for equity instruments based on
the average daily trading volume both in absolute terms andrelative to the market capitalization for the instrument. The
firm defines active markets for debt instruments based on
both the average daily trading volume and the number ofdays with trading activity.
Level 2. Level 2 instruments include certain non-U.S.
government obligations, most agency obligations, most
mortgage-backed loans and securities, most corporate debt
instruments, most state and municipal obligations, mostmoney market instruments, most other debt obligations,
restricted or less liquid listed equities, certain private
equities, commodities and certain lending commitments.
Valuations of level 2 instruments can be verified to quoted
prices, recent trading activity for identical or similar
instruments, broker or dealer quotations or alternative
pricing sources with reasonable levels of price transparency.
Consideration is given to the nature of the quotations (e.g.,indicative or executable) and the relationship of recent
market activity to the prices provided from alternative
pricing sources.

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THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Valuation adjustments are typically made to level 2
instruments (i) if the instrument is subject to transfer
restrictions and/or (ii) for other premiums and liquidity
discounts that a market participant would require to arriveat fair value. Valuation adjustments are generally based onmarket evidence.
Level 3. Level 3 instruments have one or more significant
valuation inputs that are not observable. Absent evidence tothe contrary, level 3 instruments are initially valued attransaction price, which is considered to be the best initial
estimate of fair value. Subsequently, the firm uses othermethodologies to determine fair value, which vary based on
the type of instrument. Valuation inputs and assumptions
are changed when corroborated by substantive observableevidence, including values realized on sales.
Valuation techniques of level 3 instruments vary by
instrument, but are generally based on discounted cash flow
techniques. The valuation techniques and the nature ofsignificant inputs used to determine the fair values of eachtype of level 3 instrument are described below:
Loans and Securities Backed by Commercial Real
EstateLoans and securities backed by commercial real estate are
directly or indirectly collateralized by a single property or aportfolio of properties and may include tranches of varying
levels of subordination. Significant inputs are generally
determined based on relative value analyses and include:‰ Market yields implied by transactions of similar or related
assets and/or current levels and changes in market indices,such as the CMBX (an index that tracks the performanceof commercial mortgage bonds);‰ Transaction prices in both the underlying collateral andinstruments with the same or similar underlying
collateral;‰ A measure of expected future cash flows in a default
scenario (recovery rates) implied by the value of theunderlying collateral, which is mainly driven by current
performance of the underlying collateral andcapitalization rates. Recovery rates are expressed as apercentage of notional or face value of the instrument andreflect the benefit of credit enhancements on certain
instruments; and‰ Timing of expected future cash flows (duration) which, incertain cases, may incorporate the impact of any loan
forbearances and other unobservable inputs (e.g.,
prepayment speeds).

Loans and Securities Backed by Residential Real
EstateLoans and securities backed by residential real estate are
directly or indirectly collateralized by portfolios ofresidential real estate and may include tranches of varying
levels of subordination. Significant inputs are generally
determined based on relative value analyses, which
incorporate comparisons to instruments with similar
collateral and risk profiles. Significant inputs include:‰ Market yields implied by transactions of similar or related
assets;‰ Transaction prices in both the underlying collateral andinstruments with the same or similar underlying collateral;‰ Cumulative loss expectations, driven by default rates,
home price projections, residential property liquidation
timelines, related costs and subsequent recoveries; and‰ Duration, driven by underlying loan prepayment speeds
and residential property liquidation timelines.
Corporate Debt Instruments
Corporate debt instruments includes corporate loans, debt
securities and convertible debentures. Significant inputs forcorporate debt instruments are generally determined basedon relative value analyses, which incorporate comparisonsboth to prices of credit default swaps that reference thesame or similar underlying instrument or entity and toother debt instruments for the same or similar issuer forwhich observable prices or broker quotations are available.
Significant inputs include:‰ Market yields implied by transactions of similar or related
assets and/or current levels and trends of market indices,such as the CDX (an index that tracks the performance ofcorporate credit);‰ Current performance and recovery assumptions and,
where the firm uses credit default swaps to value therelated instrument, the cost of borrowing the underlying
reference obligation;‰ Duration; and‰ Market and transaction multiples for corporate debt
instruments with convertibility or participation options.
Equity Securities
Equity securities consists of private equities. Recent thirdparty completed or pending transactions (e.g., merger
proposals, debt restructurings, tender offers) are considered
the best evidence for any change in fair value. When these
are not available, the following valuation methodologies
are used, as appropriate:‰ Industry multiples (primarily EBITDA and revenue
multiples) and public comparables;‰ Transactions in similar instruments;

132 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Discounted cash flow techniques; and‰ Third-party appraisals.
The firm also considers changes in the outlook for the
relevant industry and financial performance of the issuer ascompared to projected performance. Significant inputs
include:‰ Market and transaction multiples;‰ Discount rates and capitalization rates; and‰ For equity securities with debt-like features, market yields
implied by transactions of similar or related assets,
current performance and recovery assumptions, andduration.
Other Trading Cash Instruments, Investments andLoans
The significant inputs to the valuation of other instruments,
such as non-U.S. government obligations and U.S. andnon-U.S. agency obligations, state and municipal
obligations, and other loans and debt obligations are
generally determined based on relative value analyses,
which incorporate comparisons both to prices of credit
default swaps that reference the same or similar underlying
instrument or entity and to other debt instruments for thesame issuer for which observable prices or broker
quotations are available. Significant inputs include:‰ Market yields implied by transactions of similar or related
assets and/or current levels and trends of market indices;‰ Current performance and recovery assumptions and,
where the firm uses credit default swaps to value therelated instrument, the cost of borrowing the underlying
reference obligation; and‰ Duration.
Valuation Techniques and Significant Inputs for
Derivatives
The firm’s level 2 and level 3 derivatives are valued using
derivative pricing models (e.g., discounted cash flow
models, correlation models and models that incorporate
option pricing methodologies, such as Monte Carlosimulations). Price transparency of derivatives can generally
be characterized by product type, as described below.
‰ Interest Rate. In general, the key inputs used to valueinterest rate derivatives are transparent, even for mostlong-dated contracts. Interest rate swaps and options
denominated in the currencies of leading industrialized
nations are characterized by high trading volumes and tightbid/offer spreads. Interest rate derivatives that referenceindices, such as an inflation index, or the shape of the yield
curve (e.g., 10-year swap rate vs. 2-year swap rate) are
more complex, but the key inputs are generally observable.

‰ Credit. Price transparency for credit default swaps,
including both single names and baskets of credits, varies
by market and underlying reference entity or obligation.
Credit default swaps that reference indices, large
corporates and major sovereigns generally exhibit themost price transparency. For credit default swaps withother underliers, price transparency varies based on credit
rating, the cost of borrowing the underlying reference
obligations, and the availability of the underlying
reference obligations for delivery upon the default of theissuer. Credit default swaps that reference loans, assetbacked securities and emerging market debt instruments
tend to have less price transparency than those thatreference corporate bonds. In addition, more complex
credit derivatives, such as those sensitive to thecorrelation between two or more underlying reference
obligations, generally have less price transparency.
‰ Currency. Prices for currency derivatives based on theexchange rates of leading industrialized nations,
including those with longer tenors, are generallytransparent. The primary difference between the pricetransparency of developed and emerging market currency
derivatives is that emerging markets tend to be only
observable for contracts with shorter tenors.
‰ Commodity. Commodity derivatives include transactions
referenced to energy (e.g., oil, natural gas and electricity),
metals (e.g., precious and base) and soft commodities (e.g.,
agricultural). Price transparency varies based on theunderlying commodity, delivery location, tenor andproduct quality (e.g., diesel fuel compared to unleaded
gasoline). In general, price transparency for commodity
derivatives is greater for contracts with shorter tenors andcontracts that are more closely aligned with major and/or
benchmark commodity indices.
‰ Equity. Price transparency for equity derivatives varies bymarket and underlier. Options on indices and thecommon stock of corporates included in major equity
indices exhibit the most price transparency. Equity
derivatives generally have observable market prices,
except for contracts with long tenors or reference pricesthat differ significantly from current market prices. Morecomplex equity derivatives, such as those sensitive to thecorrelation between two or more individual stocks,
generally have less price transparency.
Liquidity is essential to observability of all product types. If
transaction volumes decline, previously transparent prices
and other inputs may become unobservable. Conversely,
even highly structured products may at times have trading
volumes large enough to provide observability of prices andother inputs.

Goldman Sachs 2021 Form 10-K 133

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Level 1. Level 1 derivatives include short-term contracts for
future delivery of securities when the underlying security isa level 1 instrument, and exchange-traded derivatives ifthey are actively traded and are valued at their quoted
market price.
Level 2. Level 2 derivatives include OTC derivatives forwhich all significant valuation inputs are corroborated bymarket evidence and exchange-traded derivatives that are
not actively traded and/or that are valued using models thatcalibrate to market-clearing levels of OTC derivatives.
The selection of a particular model to value a derivative
depends on the contractual terms of and specific risks
inherent in the instrument, as well as the availability ofpricing information in the market. For derivatives that
trade in liquid markets, model selection does not involve
significant management judgment because outputs ofmodels can be calibrated to market-clearing levels.
Valuation models require a variety of inputs, such as
contractual terms, market prices, yield curves, discountrates (including those derived from interest rates oncollateral received and posted as specified in credit support
agreements for collateralized derivatives), credit curves,
measures of volatility, prepayment rates, loss severity rates
and correlations of such inputs. Significant inputs to thevaluations of level 2 derivatives can be verified to market
transactions, broker or dealer quotations or otheralternative pricing sources with reasonable levels of pricetransparency. Consideration is given to the nature of thequotations (e.g., indicative or executable) and therelationship of recent market activity to the prices provided
from alternative pricing sources.
Level 3. Level 3 derivatives are valued using models which
utilize observable level 1 and/or level 2 inputs, as well as
unobservable level 3 inputs. The significant unobservable
inputs used to value the firm’s level 3 derivatives aredescribed below.
‰ For level 3 interest rate and currency derivatives,
significant unobservable inputs include correlations ofcertain currencies and interest rates (e.g., the correlation
between Euro inflation and Euro interest rates) andspecific interest rate and currency volatilities.
‰ For level 3 credit derivatives, significant unobservable
inputs include illiquid credit spreads and upfront credit
points, which are unique to specific reference obligations
and reference entities, and recovery rates.

134 Goldman Sachs 2021 Form 10-K

‰ For level 3 commodity derivatives, significant
unobservable inputs include volatilities for options withstrike prices that differ significantly from current market
prices and prices or spreads for certain products for which
the product quality or physical location of the commodity
is not aligned with benchmark indices.
‰ For level 3 equity derivatives, significant unobservable
inputs generally include equity volatility inputs for
options that are long-dated and/or have strike prices thatdiffer significantly from current market prices. In
addition, the valuation of certain structured trades
requires the use of level 3 correlation inputs, such as thecorrelation of the price performance of two or moreindividual stocks or the correlation of the priceperformance for a basket of stocks to another asset class,such as commodities.
Subsequent to the initial valuation of a level 3 derivative,
the firm updates the level 1 and level 2 inputs to reflect
observable market changes and any resulting gains andlosses are classified in level 3. Level 3 inputs are changed
when corroborated by evidence, such as similar market
transactions, third-party pricing services and/or broker ordealer quotations or other empirical market data. In
circumstances where the firm cannot verify the model value
by reference to market transactions, it is possible that adifferent valuation model could produce a materiallydifferent estimate of fair value. See Note 7 for further
information about significant unobservable inputs used in
the valuation of level 3 derivatives.
Valuation Adjustments. Valuation adjustments areintegral to determining the fair value of derivative
portfolios and are used to adjust the mid-market valuations
produced by derivative pricing models to the exit pricevaluation. These adjustments incorporate bid/offer spreads,
the cost of liquidity, and credit and funding valuation
adjustments, which account for the credit and funding risk
inherent in the uncollateralized portion of derivative
portfolios. The firm also makes funding valuation
adjustments to collateralized derivatives where the terms of
the agreement do not permit the firm to deliver or repledge
collateral received. Market-based inputs are generally used
when calibrating valuation adjustments to market-clearing
levels.
In addition, for derivatives that include significant
unobservable inputs, the firm makes model or exit priceadjustments to account for the valuation uncertainty
present in the transaction.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Valuation Techniques and Significant Inputs for
Other Financial Instruments at Fair Value
In addition to trading cash instruments, derivatives, andcertain investments and loans, the firm accounts for certainof its other financial assets and liabilities at fair value under
the fair value option. Such instruments include resale andrepurchase agreements; certain securities borrowed andloaned transactions; certain customer and other receivables,
including certain margin loans; certain time deposits,
including structured certificates of deposit, which are
hybrid financial instruments; substantially all other secured
financings, including transfers of assets accounted for as
financings; certain unsecured short- and long-termborrowings, substantially all of which are hybrid financial
instruments; and certain other liabilities. These instruments
are generally valued based on discounted cash flow
techniques, which incorporate inputs with reasonable levelsof price transparency, and are generally classified in level 2
because the inputs are observable. Valuation adjustments
may be made for liquidity and for counterparty and thefirm’s credit quality. The significant inputs used to value thefirm’s other financial instruments are described below.
Resale and Repurchase Agreements and Securities
Borrowed and Loaned. The significant inputs to thevaluation of resale and repurchase agreements andsecurities borrowed and loaned are funding spreads, theamount and timing of expected future cash flows andinterest rates.
Customer and Other Receivables. The significant inputs
to the valuation of receivables are interest rates, the amountand timing of expected future cash flows and funding
spreads.
Deposits. The significant inputs to the valuation of time
deposits are interest rates and the amount and timing of
future cash flows. The inputs used to value the embedded
derivative component of hybrid financial instruments are
consistent with the inputs used to value the firm’s otherderivative instruments described above. See Note 7 forfurther information about derivatives and Note 13 forfurther information about deposits.
Other Secured Financings. The significant inputs to thevaluation of other secured financings are the amount andtiming of expected future cash flows, interest rates, funding
spreads and the fair value of the collateral delivered by thefirm (determined using the amount and timing of expected
future cash flows, market prices, market yields andrecovery assumptions). See Note 11 for further information
about other secured financings.

Unsecured Short- and Long-Term Borrowings. The
significant inputs to the valuation of unsecured short- andlong-term borrowings are the amount and timing of
expected future cash flows, interest rates, the credit spreadsof the firm and commodity prices for prepaid commodity
transactions. The inputs used to value the embedded
derivative component of hybrid financial instruments are
consistent with the inputs used to value the firm’s otherderivative instruments described above. See Note 7 forfurther information about derivatives and Note 14 forfurther information about borrowings.
Other Liabilities. The significant inputs to the valuation ofother liabilities are the amount and timing of expected
future cash flows and equity volatility and correlation
inputs. The inputs used to value the embedded derivative
component of hybrid financial instruments are consistent
with the inputs used to value the firm’s other derivative
instruments described above. See Note 7 for further
information about derivatives.
Financial Assets and Liabilities at Fair Value
The table below presents financial assets and liabilities
carried at fair value.
As of December$ in millions

2021

2020

Total level 1 financial assets
Total level 2 financial assets
Total level 3 financial assets
Investments in funds at NAVCounterparty and cash collateral netting
Total financial assets at fair value$ 255,774 $ 263,999
498,527
410,275
24,083
26,305
3,469
3,664(66,041)(77,170)$ 715,812 $ 627,073

Total assets$1,463,988 $1,163,028

Total level 3 financial assets divided by:
Total assets
Total financial assets at fair value
Total level 1 financial liabilities
Total level 2 financial liabilities
Total level 3 financial liabilities
Counterparty and cash collateral netting
Total financial liabilities at fair value

1.6%
2.3%
3.4%
4.2%
$ 110,030 $ 85,120
403,627
331,824
29,16932,930(51,269)(60,297)$ 491,557 $ 389,577

Total liabilities$1,354,062 $1,067,096

Total level 3 financial liabilities divided by:
Total liabilities
Total financial liabilities at fair value

2.2%
5.9%

3.1%
8.5%

In the table above:‰ Counterparty netting among positions classified in thesame level is included in that level.
‰ Counterparty and cash collateral netting represents theimpact on derivatives of netting across levels.

Goldman Sachs 2021 Form 10-K 135

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents a summary of level 3 financial
assets.

Gains and Losses from Market Making
The table below presents market making revenues by major
product type.

As of December$ in millions

Trading assets:
Trading cash instruments
Derivatives
Investments
Loans
Total

2021

2020

$ 1,889
5,938
13,902
2,354$24,083$ 1,237
5,967
16,423
2,678$26,305$ in millions

Level 3 financial assets as of December 2021 decreased
compared with December 2020, primarily reflecting adecrease in level 3 investments. See Notes 5 through 10 for
further information about level 3 financial assets (including
information about unrealized gains and losses related tolevel 3 financial assets and transfers in and out of level 3).
Note 5.

Trading Assets and Liabilities
Trading assets and liabilities include trading cash
instruments and derivatives held in connection with thefirm’s market-making or risk management activities. Theseassets and liabilities are carried at fair value either under thefair value option or in accordance with other U.S. GAAP,and the related fair value gains and losses are generally
recognized in the consolidated statements of earnings.
The table below presents a summary of trading assets andliabilities.
Trading
AssetsTrading
Liabilities

As of December 2021
Trading cash instruments
Derivatives
Total$311,956
63,960$375,916$129,471
51,953$181,424

As of December 2020
Trading cash instruments
Derivatives
Total$324,049
69,581$393,630$ 95,136
58,591$153,727$ in millions

See Note 6 for further information about trading cash
instruments and Note 7 for further information about
derivatives.

136 Goldman Sachs 2021 Form 10-K

Year Ended December

Interest rates
CreditCurrencies
Equities
Commodities
Total

2021

2020

2019

$ (2,669)
1,739
5,627
8,459
2,196
$15,352$ 6,191
3,250(3,257)
6,757
2,605$15,546$ 3,272
682
2,902
2,946
355
$10,157

In the table above:‰ Gains/(losses) include both realized and unrealized gains
and losses. Gains/(losses) exclude related interest income
and interest expense. See Note 23 for further information
about interest income and interest expense.
‰ Gains/(losses) included in market making are primarily
related to the firm’s trading assets and liabilities,
including both derivative and non-derivative financial
instruments.
‰ Gains/(losses) are not representative of the manner inwhich the firm manages its business activities because
many of the firm’s market-making and client facilitation
strategies utilize financial instruments across various
product types. Accordingly, gains or losses in one producttype frequently offset gains or losses in other producttypes. For example, most of the firm’s longer-term
derivatives across product types are sensitive to changes
in interest rates and may be economically hedged withinterest rate swaps. Similarly, a significant portion of thefirm’s trading cash instruments and derivatives acrossproduct types has exposure to foreign currencies and may
be economically hedged with foreign currency contracts.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 6.

Trading Cash Instruments
Trading cash instruments consists of instruments held inconnection with the firm’s market-making or risk
management activities. These instruments are carried at fairvalue and the related fair value gains and losses arerecognized in the consolidated statements of earnings.
Fair Value of Trading Cash Instruments by Level
The table below presents trading cash instruments by levelwithin the fair value hierarchy.
$ in millions

Level 1

Level 2

Level 3Total

As of December 2021
AssetsGovernment and agency obligations:U.S.
$ 63,388 $ 27,427 $– $ 90,815
Non-U.S.
35,284
13,511
19
48,814Loans and securities backed by:Commercial real estate
–
1,717
137
1,854
Residential real estate–
13,083
152
13,235
Corporate debt instruments
590
36,874 1,318
38,782
State and municipal obligations
–
568
36
604
Other debt obligations
69
1,564
66
1,699
Equity securities
105,233
2,958
156
108,347
Commodities
–
7,801
5
7,806
Total
$ 204,564 $105,503 $1,889 $ 311,956
Liabilities
Government and agency obligations:U.S.
$ (21,002) $(25) $– $ (21,027)
Non-U.S.
(39,983)(2,602)–(42,585)
Loans and securities backed by:Commercial real estate
–
(40)
(2)
(42)
Residential real estate
–
(5)
–
(5)
Corporate debt instruments(23) (15,781)(71)(15,875)
Equity securities(48,991)(915)(31)(49,937)
Total$(109,999) $ (19,368) $ (104) $(129,471)
As of December 2020
AssetsGovernment and agency obligations:U.S.
$ 93,670 $ 44,863 $– $ 138,533
Non-U.S.
46,147
11,261
15
57,423Loans and securities backed by:Commercial real estate
–
597
203
800
Residential real estate
–
6,948
131
7,079
Corporate debt instruments
915
29,639797
31,351
State and municipal obligations
–
200
–
200
Other debt obligations
338
1,055
19
1,412
Equity securities
75,3002,505
72
77,877
Commodities
–
9,374
–
9,374
Total
$ 216,370 $106,442 $1,237 $ 324,049
Liabilities
Government and agency obligations:U.S.
$ (16,880) $(13) $
Non-U.S.
(22,092)(1,792)Loans and securities backed by:Commercial real estate–(17)
Residential real estate–(1)
Corporate debt instruments(2)(7,970)State and municipal obligations–(5)
Other debt obligations––
Equity securities(45,734)
(550)
Total
$ (84,708) $ (10,348) $– $ (16,893)–(23,884)
(1)
(18)
–
(1)
(50)
(8,022)
–
(5)
(2)
(2)
(27)
(46,311)(80) $ (95,136)‰ Corporate debt instruments includes corporate loans,debt securities, convertible debentures, prepaid
commodity transactions and transfers of assets accounted
for as secured loans rather than purchases.
‰ Other debt obligations includes other asset-backed
securities and money market instruments.
‰ Equity securities includes public equities and exchangetraded funds.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value of trading
cash instruments. See Note 7 for information about hedging
activities for precious metals included in commodities andaccounted for at the lower of cost or net realizable value.
These precious metals are designated in a fair value hedging
relationship, and therefore their carrying value equals fairvalue.
Significant Unobservable Inputs
The table below presents the amount of level 3 assets, andranges and weighted averages of significant unobservable
inputs used to value level 3 trading cash instruments.
As of December 2021
$ in millions

Amount or Weighted
Range Average

As of December 2020
Amount or Weighted
Range Average

Loans and securities backed by commercial real estate
Level 3 assets
$137
$203
Yield
2.8% to 28.5%
12.3% 1.7% to 22.0%
Recovery rate
5.1% to 86.5%
55.0% 5.1% to 94.9%
Duration (years)
0.1 to 4.3
1.8
1.1 to 9.1
Loans and securities backed by residential real estate
Level 3 assets
$152
$131
Yield
0.4% to 26.6%
7.0% 0.6% to 15.7%
Cumulative loss rate 0.1% to 43.4%
17.7% 3.4% to 45.6%
Duration (years)
1.2 to 17.2
6.5
0.9 to 16.1
Corporate debt instruments
Level 3 assets$1,318$797
Yield
0.0% to 18.0%
7.1% 0.6% to 30.6%
Recovery rate
9.0% to 69.9%
52.0% 0.0% to 73.6%
Duration (years)
2.0 to 28.5
4.5
0.3 to 25.5

9.0%
57.7%
5.0

6.3%
20.8%
6.5

9.5%
58.7%
4.0

As of both December 2021 and December 2020, level 3
government and agency obligations, state and municipal
obligations, other debt obligations and commodities were
not material, and, therefore, are not included in the table
above. In addition, as of both December 2021 andDecember 2020, each of the significant unobservable inputs
for equity securities did not have a range as they pertained
to individual positions. Therefore, such unobservable
inputs are not included in the table above.

In the table above:‰ Trading cash instrument assets are shown as positive
amounts and trading cash instrument liabilities are shownas negative amounts.
Goldman Sachs 2021 Form 10-K 137

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above:

In the table above:‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of trading cash
instrument.

‰ Changes in fair value are presented for all trading cash
instruments that are classified in level 3 as of the end of
the period.

‰ Weighted averages are calculated by weighting each input
by the relative fair value of the trading cash instruments.

‰ Net unrealized gains/(losses) relates to trading cash
instruments that were still held at period-end.

‰ The ranges and weighted averages of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one trading cash
instrument. For example, the highest recovery rate forcorporate debt instruments is appropriate for valuing a
specific corporate debt instrument, but may not beappropriate for valuing any other corporate debt
instrument. Accordingly, the ranges of inputs do not
represent uncertainty in, or possible ranges of, fair value
measurements of level 3 trading cash instruments.

‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a trading cash instrument was transferred tolevel 3 during a reporting period, its entire gain or loss forthe period is classified in level 3.

‰ Increases in yield, duration or cumulative loss rate used in
the valuation of level 3 trading cash instruments would
have resulted in a lower fair value measurement, while
increases in recovery rate would have resulted in a higher
fair value measurement as of both December 2021 andDecember 2020. Due to the distinctive nature of eachlevel 3 trading cash instrument, the interrelationship of
inputs is not necessarily uniform within each producttype.
‰ Trading cash instruments are valued using discounted
cash flows.
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 trading cash instruments.
Year Ended December$ in millions

Total trading cash instrument assets
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance
Total trading cash instrument liabilities
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

138 Goldman Sachs 2021 Form 10-K

2021

2020

$1,237
80
52
1,241
(456)
(273)
272
(264)
$1,889$1,242
66
(143)
796
(411)
(266)
156
(203)
$1,237$$ (273)
–
(15)
34
(38)
9
(27)
230
$ (80)

(80)
6
(5)
36
(64)
13
(16)
6
$ (104)‰ For level 3 trading cash instrument assets, increases areshown as positive amounts, while decreases are shown as
negative amounts. For level 3 trading cash instrument
liabilities, increases are shown as negative amounts, while
decreases are shown as positive amounts.
‰ Level 3 trading cash instruments are frequently
economically hedged with level 1 and level 2 trading cash
instruments and/or level 1, level 2 or level 3 derivatives.
Accordingly, gains or losses that are classified in level 3
can be partially offset by gains or losses attributable tolevel 1 or level 2 trading cash instruments and/or level 1,
level 2 or level 3 derivatives. As a result, gains or losses
included in the level 3 rollforward below do notnecessarily represent the overall impact on the firm’s
results of operations, liquidity or capital resources.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents information, by product type, forassets included in the summary table above.
Year Ended December$ in millions

2021

2020

Loans and securities backed by commercial real estate
Beginning balance$ 203
Net realized gains/(losses)
7
Net unrealized gains/(losses)(16)
Purchases
67
Sales
(31)
Settlements(18)
Transfers into level 3
14Transfers out of level 3(89)
Ending balance
$ 137

$191
11
(33)
110
(19)
(64)
25
(18)
$203

Loans and securities backed by residential real estate
Beginning balance$ 131
Net realized gains/(losses)
5
Net unrealized gains/(losses)
19
Purchases
68
Sales
(44)
Settlements(35)
Transfers into level 3
28
Transfers out of level 3(20)
Ending balance
$ 152

$231
11
23
69
(80)
(40)
5
(88)
$131

Corporate debt instruments
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 797
57
28
894
(330)
(182)
207
(153)
$1,318

$692
47
(118)
551
(233)
(146)
96
(92)
$797

Other
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 106
11
21
212
(51)
(38)
23
(2)
$ 282

$128
(3)
(15)
66
(79)
(16)
30
(5)
$106

In the table above, other includes U.S. and non-U.S.
government and agency obligations, other debt obligations
and equity securities.
Level 3 Rollforward Commentary
Year Ended December 2021. The net realized andunrealized gains on level 3 trading cash instrument assets of$132 million (reflecting $80 million of net realized gains
and $52 million of net unrealized gains) for 2021 included
gains of $45 million reported in market making and$87 million reported in interest income.
The drivers of the net unrealized gains on level 3 trading
cash instrument assets for 2021 were not material.

Transfers into level 3 trading cash instrument assets during2021 primarily reflected transfers of certain corporate debt
instruments from level 2 (principally due to certain
unobservable yield and duration inputs becoming
significant to the valuation of these instruments, andreduced price transparency as a result of a lack of market
evidence, including fewer market transactions in these
instruments).
Transfers out of level 3 trading cash instrument assets
during 2021 primarily reflected transfers of certain
corporate debt instruments, and loans and securities backed
by commercial real estate to level 2 (in each case, principally
due to increased price transparency as a result of market
evidence, including market transactions in these
instruments, and certain unobservable yield and duration
inputs no longer being significant to the valuation of these
instruments).
Year Ended December 2020. The net realized andunrealized losses on level 3 trading cash instrument assets of$77 million (reflecting $66 million of net realized gains and$143 million of net unrealized losses) for 2020 included
gains/(losses) of $(193) million reported in market making
and $116 million reported in interest income.
The net unrealized losses on level 3 trading cash instrument
assets for 2020 primarily reflected losses on certain
corporate debt instruments (principally driven by wider
credit spreads).
Transfers into level 3 trading cash instrument assets during2020 primarily reflected transfers of certain corporate debt
instruments from level 2 (principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Transfers out of level 3 trading cash instrument assets
during 2020 primarily reflected transfers of certain
corporate debt instruments, and loans and securities backed
by residential real estate to level 2 (in each case, principally
due to increased price transparency as a result of market
evidence, including market transactions in these
instruments).
Note 7.

Derivatives and Hedging Activities
Derivative Activities
Derivatives are instruments that derive their value fromunderlying asset prices, indices, reference rates and other
inputs, or a combination of these factors. Derivatives may
be traded on an exchange (exchange-traded) or they may beprivately negotiated contracts, which are usually referred toas OTC derivatives. Certain of the firm’s OTC derivatives
are cleared and settled through central clearing
counterparties (OTC-cleared), while others are bilateralcontracts between two counterparties (bilateral OTC).
Goldman Sachs 2021 Form 10-K 139

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Market Making. As a market maker, the firm enters into
derivative transactions to provide liquidity to clients and to
facilitate the transfer and hedging of their risks. In this role,
the firm typically acts as principal and is required to commit
capital to provide execution, and maintains market-making
positions in response to, or in anticipation of, client demand.
Risk Management. The firm also enters into derivatives toactively manage risk exposures that arise from its marketmaking and investing and financing activities. The firm’s
holdings and exposures are hedged, in many cases, on either
a portfolio or risk-specific basis, as opposed to an
instrument-by-instrument basis. The offsetting impact of
this economic hedging is reflected in the same businesssegment as the related revenues. In addition, the firm mayenter into derivatives designated as hedges under U.S.
GAAP. These derivatives are used to manage interest rate
exposure of certain fixed-rate unsecured borrowings anddeposits, foreign exchange risk of certain available-for-salesecurities and the net investment in certain non-U.S.
operations, and the price risk of certain commodities.
The firm enters into various types of derivatives, including:‰ Futures and Forwards. Contracts that commit
counterparties to purchase or sell financial instruments,
commodities or currencies in the future.
‰ Swaps. Contracts that require counterparties toexchange cash flows, such as currency or interest
payment streams. The amounts exchanged are based on
the specific terms of the contract with reference tospecified rates, financial instruments, commodities,
currencies or indices.
‰ Options. Contracts in which the option purchaser has
the right, but not the obligation, to purchase from or sellto the option writer financial instruments, commodities
or currencies within a defined time period for a specified
price.
Derivatives are reported on a net-by-counterparty basis (i.e.,
the net payable or receivable for derivative assets andliabilities for a given counterparty) when a legal right ofsetoff exists under an enforceable netting agreement(counterparty netting). Derivatives are accounted for at fairvalue, net of cash collateral received or posted underenforceable credit support agreements (cash collateral
netting). Derivative assets are included in trading assets andderivative liabilities are included in trading liabilities.
Realized and unrealized gains and losses on derivatives notdesignated as hedges are included in market making (forderivatives included in the Global Markets segment), andother principal transactions (for derivatives included in theremaining business segments) in the consolidated statementsof earnings. For both 2021 and 2020, substantially all of thefirm’s derivatives were included in the Global Markets
segment.
140 Goldman Sachs 2021 Form 10-K

The tables below present the gross fair value and thenotional amounts of derivative contracts by major producttype, the amounts of counterparty and cash collateral
netting in the consolidated balance sheets, as well as cash
and securities collateral posted and received underenforceable credit support agreements that do not meet thecriteria for netting under U.S. GAAP.

$ in millions

As of December 2021

As of December 2020

Derivative
AssetsDerivative
AssetsNot accounted for as hedges
Exchange-traded$256
OTC-cleared
13,795
Bilateral OTC
232,595
Total interest rates
246,646
OTC-cleared
3,665
Bilateral OTC
12,591
Total credit
16,256
Exchange-traded417
OTC-cleared
423
Bilateral OTC
86,076
Total currencies
86,916
Exchange-traded
6,534
OTC-cleared
652
Bilateral OTC
28,359Total commodities
35,545
Exchange-traded
33,840OTC-cleared8
Bilateral OTC
39,718
Total equities
73,566
Subtotal
458,929
Accounted for as hedges
OTC-cleared
1
Bilateral OTC
945
Total interest rates
946
OTC-cleared
34
Bilateral OTC
60
Total currencies
94
Subtotal
1,040
Total gross fair value$ 459,969

Derivative
Liabilities$

Derivative
Liabilities

557 $
665 $
660
12,692
18,832
16,809205,073
337,998
304,370
218,322357,495
321,839
4,053
4,137
4,517
11,702
12,418
11,551
15,755
16,555
16,068
10
133
22
338
401
631
85,795
101,830
102,676
86,143102,364
103,329
6,189
4,476
4,177
373
195
187
25,969
9,320
13,691
32,531
13,991
18,05535,51829,006
31,944
5––
44,75047,86749,07280,27376,87381,016
433,024567,278
540,307

–
1
–
–
1,346
–
–
1,347
–
27
–
87
139
4
372
166
4
459
166
1,351
459
$ 433,190 $ 568,629 $ 540,766

Offset in the consolidated balance sheets
Exchange-traded$ (35,724) $ (35,724) $ (29,549) $ (29,549)
OTC-cleared(16,979)(16,979)(21,315)(21,315)
Bilateral OTC(279,189)(279,189) (372,142) (372,142)
Counterparty netting(331,892)(331,892) (423,006) (423,006)
OTC-cleared(1,033)(361)(1,926)(720)
Bilateral OTC(63,084)(48,984)(74,116)(58,449)
Cash collateral netting(64,117)(49,345)(76,042)(59,169)
Total amounts offset$(396,009) $(381,237) $(499,048) $(482,175)
Included in the consolidated balance sheets
Exchange-traded$ 5,323 $ 6,550
OTC-cleared
566
148
Bilateral OTC
58,07145,255
Total$ 63,960 $ 51,953$

4,731 $ 7,254
325
196
64,525
51,141$ 69,581 $ 58,591

Not offset in the consolidated balance sheets
Cash collateral$ (1,008) $ (1,939) $(979) $ (2,427)
Securities collateral(15,751)(7,349)(17,297)(9,943)Total$ 47,201 $ 42,665 $ 51,305 $ 46,221

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Notional Amounts as of December$ in millions

Not accounted for as hedges
Exchange-traded
OTC-cleared
Bilateral OTC
Total interest rates
OTC-cleared
Bilateral OTC
Total credit
Exchange-traded
OTC-cleared
Bilateral OTC
Total currencies
Exchange-traded
OTC-cleared
Bilateral OTC
Total commodities
Exchange-traded
OTC-cleared
Bilateral OTC
Total equities
Subtotal
Accounted for as hedges
OTC-cleared
Bilateral OTC
Total interest rates
OTC-cleared
Bilateral OTC
Total currencies
Exchange-traded
Total commodities
Subtotal
Total notional amounts

2021

2020

$ 2,630,915
17,874,504
11,122,871
31,628,290
463,477
616,095
1,079,572
14,617
194,124
6,606,927
6,815,668
308,917
3,647
234,322546,886
1,149,777
198
1,173,103
2,323,078
42,393,494$ 3,722,558
13,789,571
11,076,460
28,588,589
515,197558,813
1,074,010
7,413
157,687
6,041,663
6,206,763
242,193
2,315
206,253
450,761
948,937–
1,126,572
2,075,509
38,395,632

219,083
4,499
223,582
2,758
18,65821,4161,050
1,050
246,048$42,639,542

182,311
6,641
188,952
1,767
14,055
15,822––
204,774$38,600,406

In the tables above:‰ Gross fair values exclude the effects of both counterparty
netting and collateral, and therefore are notrepresentative of the firm’s exposure.
‰ Where the firm has received or posted collateral undercredit support agreements, but has not yet determinedsuch agreements are enforceable, the related collateral has
not been netted.
‰ Notional amounts, which represent the sum of gross longand short derivative contracts, provide an indication of
the volume of the firm’s derivative activity and do not
represent anticipated losses.
‰ Total gross fair value of derivatives included derivative
assets of $17.48 billion as of December 2021 and$20.60 billion as of December 2020, and derivative
liabilities of $17.29 billion as of December 2021 and$22.98 billion as of December 2020, which are notsubject to an enforceable netting agreement or are subject
to a netting agreement that the firm has not yet
determined to be enforceable.

Fair Value of Derivatives by Level
The table below presents derivatives on a gross basis bylevel and product type, as well as the impact of netting.
$ in millions

As of December 2021
AssetsInterest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value
Liabilities
Interest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value

Level 1

Level 2

Level 3Total$

2 $ 246,525 $ 1,065 $ 247,592–
12,823
3,433
16,256–
86,773237
87,010–34,501
1,044
35,54533
72,570963
73,56635
453,192
6,742
459,969– (329,164)(804) (329,968)$ 35 $ 124,028 $ 5,938 $ 130,001(1,924)(64,117)$ 63,960$(2) $(217,438) $ (882) $(218,322)–(14,176) (1,579)(15,755)–(85,925)(384)(86,309)–(31,925)(606)(32,531)(29)(77,393) (2,851)(80,273)(31) (426,857) (6,302) (433,190)–
329,164804
329,968$ (31) $ (97,693) $(5,498) $(103,222)
1,924
49,345$ (51,953)

As of December 2020
AssetsInterest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value$ 297 $ 357,568 $ 977 $ 358,842–
13,104
3,451
16,555–102,221147
102,368–
13,285706
13,99175
75,054
1,744
76,873372
561,232
7,025
568,629(135) (420,685) (1,058) (421,878)$ 237 $ 140,547 $ 5,967 $ 146,751(1,128)(76,042)$ 69,581

Liabilities
Interest rates
CreditCurrencies
Commodities
Equities
Gross fair valueCounterparty netting in levels
Subtotal
Cross-level counterparty netting
Cash collateral netting
Net fair value$(229) $(320,900) $ (710) $(321,839)–(14,395) (1,673)(16,068)–(103,303)(485) (103,788)–(17,649)(406)(18,055)(318)(78,122) (2,576)(81,016)(547) (534,369) (5,850) (540,766)
135
420,685
1,058
421,878$(412) $(113,684) $(4,792) $(118,888)
1,128
59,169$ (58,591)

In the table above:‰ Gross fair values exclude the effects of both counterparty
netting and collateral netting, and therefore are notrepresentative of the firm’s exposure.

Goldman Sachs 2021 Form 10-K 141

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Counterparty netting is reflected in each level to theextent that receivable and payable balances are netted
within the same level and is included in counterparty
netting in levels. Where the counterparty netting is acrosslevels, the netting is included in cross-level counterparty
netting.
‰ Derivative assets are shown as positive amounts andderivative liabilities are shown as negative amounts.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value ofderivatives.
Significant Unobservable Inputs
The table below presents the amount of level 3 derivative
assets (liabilities), and ranges, averages and medians ofsignificant unobservable inputs used to value level 3
derivatives.
As of December 2021
$ in millions, except inputs

Interest rates, net
Correlation
Volatility (bps)
Credit, net
Credit spreads (bps)
Upfront credit points
Recovery rates
Currencies, net
Correlation
Volatility
Commodities, net
Volatility$183
25% to 81%
31 to 100
$1,854
1 to 568
2 to 10020% to 50%$(147)
20% to 71%
19% to 19%$438
15% to 93%

Natural gas spread$(1.33) to$2.60$(0.11)/$(0.07)$(1.00) to$2.13$(0.13)/$(0.09)

Oil spread$8.64 to$22.68$13.36/$12.69$8.30 to$11.20$9.73/$9.55

Electricity price
Equities, net
Correlation
Volatility

Average/
MedianAs of December 2020

Amount or
Range

63%/62%
59/54
136/107
34/26
37%/40%40%/41%19%/19%32%/29%Amount or
Range

Average/
Median$267(8)% to 81% 56%/60%
31 to 150
65/53
$1,7782 to 699
109/747 to 90
40/30
25% to 90% 46%/40%$(338)
20% to 70% 39%/41%
18% to 18% 18%/18%$300
15% to 87% 32%/30%$1.50 to$37.42/$289.96$32.20
N/A
N/A$(1,888)$(832)(70)% to 99% 59%/62% (70)% to 100% 52%/55%
3% to 150% 17%/17%
3% to 129% 14%/7%

In the table above:‰ Derivative assets are shown as positive amounts andderivative liabilities are shown as negative amounts.
‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of derivative.
‰ Averages represent the arithmetic average of the inputs
and are not weighted by the relative fair value or notionalamount of the respective financial instruments. An
average greater than the median indicates that the
majority of inputs are below the average. For example,
the difference between the average and the median for
credit spreads indicates that the majority of the inputs fallin the lower end of the range.
142 Goldman Sachs 2021 Form 10-K

‰ The ranges, averages and medians of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one derivative. For
example, the highest correlation for interest rate
derivatives is appropriate for valuing a specific interest
rate derivative but may not be appropriate for valuing anyother interest rate derivative. Accordingly, the ranges of
inputs do not represent uncertainty in, or possible rangesof, fair value measurements of level 3 derivatives.
‰ Interest rates, currencies and equities derivatives arevalued using option pricing models, credit derivatives arevalued using option pricing, correlation and discounted
cash flow models, and commodities derivatives are valued
using option pricing and discounted cash flow models.
‰ The fair value of any one instrument may be determinedusing multiple valuation techniques. For example, option
pricing models and discounted cash flow models are
typically used together to determine fair value. Therefore,
the level 3 balance encompasses both of these techniques.
‰ Correlation within currencies and equities includes crossproduct type correlation.
‰ Natural gas spread represents the spread per million
British thermal units of natural gas.
‰ Oil spread represents the spread per barrel of oil andrefined products.
‰ Electricity price represents the price per megawatt hour ofelectricity.
Range of Significant Unobservable Inputs
The following provides information about the ranges ofsignificant unobservable inputs used to value the firm’slevel 3 derivative instruments:‰ Correlation. Ranges for correlation cover a variety ofunderliers both within one product type (e.g., equity
index and equity single stock names) and across producttypes (e.g., correlation of an interest rate and a currency),
as well as across regions. Generally, cross-product typecorrelation inputs are used to value more complex
instruments and are lower than correlation inputs on
assets within the same derivative product type.
‰ Volatility. Ranges for volatility cover numerous
underliers across a variety of markets, maturities andstrike prices. For example, volatility of equity indices isgenerally lower than volatility of single stocks.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Credit spreads, upfront credit points and recovery
rates. The ranges for credit spreads, upfront credit points
and recovery rates cover a variety of underliers (index andsingle names), regions, sectors, maturities and credit
qualities (high-yield and investment-grade). The broad
range of this population gives rise to the width of theranges of significant unobservable inputs.
‰ Commodity prices and spreads. The ranges forcommodity prices and spreads cover variability inproducts, maturities and delivery locations.
Sensitivity of Fair Value Measurement to Changes
in Significant Unobservable Inputs
The following is a description of the directional sensitivityof the firm’s level 3 fair value measurements to changes insignificant unobservable inputs, in isolation, as of eachperiod-end:‰ Correlation. In general, for contracts where the holder
benefits from the convergence of the underlying asset orindex prices (e.g., interest rates, credit spreads, foreignexchange rates, inflation rates and equity prices), an
increase in correlation results in a higher fair value
measurement.
‰ Volatility. In general, for purchased options, an increasein volatility results in a higher fair value measurement.
‰ Credit spreads, upfront credit points and recovery
rates. In general, the fair value of purchased credit
protection increases as credit spreads or upfront credit
points increase or recovery rates decrease. Credit spreads,
upfront credit points and recovery rates are strongly
related to distinctive risk factors of the underlying
reference obligations, which include reference entityspecific factors, such as leverage, volatility and industry,market-based risk factors, such as borrowing costs or
liquidity of the underlying reference obligation, andmacroeconomic conditions.
‰ Commodity prices and spreads. In general, forcontracts where the holder is receiving a commodity, an
increase in the spread (price difference from a benchmark
index due to differences in quality or delivery location) or
price results in a higher fair value measurement.
Due to the distinctive nature of each of the firm’s level 3
derivatives, the interrelationship of inputs is not necessarily
uniform within each product type.

Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 derivatives.
Year Ended December$ in millions

Total level 3 derivatives, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance2021$ 1,175
265
452
501(1,541)
(59)
(131)
(222)
$ 440

2020

$

25
226
612
319
(724)
750
(40)
7
$1,175In the table above:‰ Changes in fair value are presented for all derivative
assets and liabilities that are classified in level 3 as of theend of the period.
‰ Net unrealized gains/(losses) relates to instruments thatwere still held at period-end.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a derivative was transferred into level 3
during a reporting period, its entire gain or loss for theperiod is classified in level 3.
‰ Positive amounts for transfers into level 3 and negative
amounts for transfers out of level 3 represent net transfersof derivative assets. Negative amounts for transfers intolevel 3 and positive amounts for transfers out of level 3
represent net transfers of derivative liabilities.
‰ A derivative with level 1 and/or level 2 inputs is classified
in level 3 in its entirety if it has at least one significant
level 3 input.
‰ If there is one significant level 3 input, the entire gain orloss from adjusting only observable inputs (i.e., level 1
and level 2 inputs) is classified in level 3.
‰ Gains or losses that have been classified in level 3
resulting from changes in level 1 or level 2 inputs are
frequently offset by gains or losses attributable to level 1
or level 2 derivatives and/or level 1, level 2 and level 3
trading cash instruments. As a result, gains/(losses)
included in the level 3 rollforward below do notnecessarily represent the overall impact on the firm’s
results of operations, liquidity or capital resources.

Goldman Sachs 2021 Form 10-K 143

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents information, by product type, forderivatives included in the summary table above.
Year Ended December$ in millions

2021

2020

Interest rates, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

267
72
316
124
(341)
18
2
(275)
$ 183

$

Credit, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$ 1,778
(21)
409
53
(217)
(77)
(70)
(1)
$ 1,854$ 1,877
28
110
39
(50)
(229)
47
(44)
$ 1,778

Currencies, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$ (338)
9
155
7
(10)
32
(17)
15
$ (147)$ (211)
(8)
(210)
1
(20)
117
(2)
(5)
$ (338)$$

Commodities, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance
Equities, net
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$

300
(80)
355
42
(15)
(149)
(3)
(12)
$ 438

$ (832)
285
(783)
275
(958)
117
(43)
51
$(1,888)

$

$

89
12
226
12
(28)
(34)
(13)
3
267

247
(12)
159
37
(22)
(60)
(27)
(22)
300

$(1,977)
206
327
230
(604)
956
(45)
75
$ (832)

Level 3 Rollforward Commentary
Year Ended December 2021. The net realized andunrealized gains on level 3 derivatives of $717 million(reflecting $265 million of net realized gains and$452 million of net unrealized gains) for 2021 included
gains of $700 million reported in market making and gains
of $17 million reported in other principal transactions.

144 Goldman Sachs 2021 Form 10-K

The net unrealized gains on level 3 derivatives for 2021
were primarily attributable to gains on certain credit andcurrency derivatives (in each case, primarily reflecting theimpact of changes in foreign exchange rates), gains oncertain commodity derivatives (primarily reflecting theimpact of an increase in commodity prices) and gains oncertain interest rate derivatives (primarily reflecting theimpact of an increase in interest rates), partially offset bylosses on certain equity derivatives (primarily reflecting theimpact of an increase in equity prices).
The drivers of transfers into level 3 derivatives during 2021
were not material.
Transfers out of level 3 derivatives during 2021 primarilyreflected transfers of certain interest rate derivative assets tolevel 2 (principally due to increased transparency of certain
volatility inputs used to value these derivatives).
Year Ended December 2020. The net realized andunrealized gains on level 3 derivatives of $838 million(reflecting $226 million of net realized gains and$612 million of net unrealized gains) for 2020 included
gains of $900 million reported in market making and losses
of $62 million reported in other principal transactions.
The net unrealized gains on level 3 derivatives for 2020
were primarily attributable to gains on certain equity
derivatives (primarily reflecting the impact of an increase inequity prices), gains on certain interest rate derivatives(primarily reflecting the impact of a decrease in interest
rates and changes in foreign exchange rates), gains oncertain commodity derivatives (primarily reflecting theimpact of changes in commodity prices), and gains oncertain credit derivatives (primarily reflecting the impact ofa decrease in interest rates), partially offset by losses oncertain currency derivatives (primarily reflecting the impact
of changes in foreign exchange rates and a decrease ininterest rates).
The drivers of both transfers into level 3 derivatives andtransfers out of level 3 derivatives during 2020 were notmaterial.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
OTC Derivatives
The table below presents OTC derivative assets andliabilities by tenor and major product type.

$ in millions

Less than
1 Year

1 - 5 Greater thanYears
5 Years

Total

As of December 2021
AssetsInterest rates$ 6,076 $11,655
Credit1,800
2,381
Currencies
13,366
6,642
Commodities
10,1787,348
Equities
11,075
6,592Counterparty netting in tenors(3,624) (3,357)
Subtotal$38,871 $31,261
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative assets$61,380 $ 79,111
3,113
7,294
6,570
26,578770
18,296
2,100
19,767(2,673)(9,654)$71,260 $141,392(18,638)(64,117)$ 58,637

Liabilities
Interest rates$ 3,929 $10,932
Credit1,695
3,257
Currencies
14,122
6,581
Commodities
7,591
6,274
Equities
8,268 12,944
Counterparty netting in tenors(3,624) (3,357)
Subtotal$31,981 $36,631
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative liabilities$34,676 $ 49,537
1,841
6,793
5,580
26,283
1,763
15,6283,587
24,799(2,673)(9,654)$44,774 $113,386(18,638)(49,345)$ 45,403

As of December 2020
AssetsInterest rates$ 8,913 $20,145
Credit822
3,270
Currencies
13,887
7,400
Commodities
2,998
1,466
Equities
12,182 12,590
Counterparty netting in tenors(3,963) (4,458)
Subtotal$34,839 $40,413
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative assets$74,893 $103,951
3,302
7,394
9,303
30,590
488
4,952
1,807
26,579(3,182) (11,603)$86,611 $161,863(20,971)(76,042)$ 64,850

Liabilities
Interest rates$ 5,687 $11,967
Credit1,268
3,462
Currencies
18,7707,575
Commodities
3,455
1,545
Equities
9,702 14,095
Counterparty netting in tenors(3,963) (4,458)
Subtotal$34,919 $34,186
Cross-tenor counterparty netting
Cash collateral netting
Total OTC derivative liabilities$49,301 $ 66,955
2,177
6,907
5,775
32,120
4,315
9,315
3,986
27,783(3,182) (11,603)$62,372 $131,477(20,971)(59,169)$ 51,337

In the table above:‰ Tenor is based on remaining contractual maturity.
‰ Counterparty netting within the same product type andtenor category is included within such product type andtenor category.
‰ Counterparty netting across product types within thesame tenor category is included in counterparty netting intenors. Where the counterparty netting is across tenor
categories, the netting is included in cross-tenor
counterparty netting.
Credit Derivatives
The firm enters into a broad array of credit derivatives tofacilitate client transactions and to manage the credit risk
associated with market-making and investing and financing
activities. Credit derivatives are actively managed based on
the firm’s net risk position. Credit derivatives are generally
individually negotiated contracts and can have various
settlement and payment conventions. Credit events include
failure to pay, bankruptcy, acceleration of indebtedness,
restructuring, repudiation and dissolution of the reference
entity.
The firm enters into the following types of credit
derivatives:‰ Credit Default Swaps. Single-name credit default swaps
protect the buyer against the loss of principal on one ormore bonds, loans or mortgages (reference obligations) inthe event the issuer of the reference obligations suffers acredit event. The buyer of protection pays an initial or
periodic premium to the seller and receives protection forthe period of the contract. If there is no credit event, as
defined in the contract, the seller of protection makes nopayments to the buyer. If a credit event occurs, the sellerof protection is required to make a payment to the buyer,
calculated according to the terms of the contract.
‰ Credit Options. In a credit option, the option writerassumes the obligation to purchase or sell a reference
obligation at a specified price or credit spread. The option
purchaser buys the right, but does not assume theobligation, to sell the reference obligation to, or purchaseit from, the option writer. The payments on credit options
depend either on a particular credit spread or the price ofthe reference obligation.

Goldman Sachs 2021 Form 10-K 145

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Credit Indices, Baskets and Tranches. Credit
derivatives may reference a basket of single-name credit
default swaps or a broad-based index. If a credit event
occurs in one of the underlying reference obligations, theprotection seller pays the protection buyer. The payment
is typically a pro-rata portion of the transaction’s total
notional amount based on the underlying defaulted
reference obligation. In certain transactions, the credit
risk of a basket or index is separated into various portions(tranches), each having different levels of subordination.
The most junior tranches cover initial defaults and once
losses exceed the notional amount of these juniortranches, any excess loss is covered by the next mostsenior tranche.
‰ Total Return Swaps. A total return swap transfers therisks relating to economic performance of a reference
obligation from the protection buyer to the protection
seller. Typically, the protection buyer receives a floating
rate of interest and protection against any reduction infair value of the reference obligation, and the protection
seller receives the cash flows associated with the reference
obligation, plus any increase in the fair value of thereference obligation.
The firm economically hedges its exposure to written credit
derivatives primarily by entering into offsetting purchased
credit derivatives with identical underliers. Substantially allof the firm’s purchased credit derivative transactions arewith financial institutions and are subject to stringent
collateral thresholds. In addition, upon the occurrence of a
specified trigger event, the firm may take possession of thereference obligations underlying a particular written credit
derivative, and consequently may, upon liquidation of thereference obligations, recover amounts on the underlying
reference obligations in the event of default.
As of December 2021, written credit derivatives had a total
gross notional amount of $510.24 billion and purchased
credit derivatives had a total gross notional amount of$569.34 billion, for total net notional purchased protectionof $59.10 billion. As of December 2020, written credit
derivatives had a total gross notional amount of$515.85 billion and purchased credit derivatives had a total
gross notional amount of $558.18 billion, for total net
notional purchased protection of $42.33 billion. The firm’s
written and purchased credit derivatives primarily consistof credit default swaps.

The table below presents information about credit
derivatives.
Credit Spread on Underlier (basis points)$ in millions

0 - 250251 500

501 1,000

Greater
than
1,000

Total

As of December 2021
Maximum Payout/Notional Amount of Written Credit Derivatives by TenorLess than 1 year
$120,456 $ 6,173 $ 1,656 $ 4,314 $132,599
1 - 5 years
305,255 14,328 12,754 3,814 336,151
Greater than 5 years
35,558
3,087
2,529
311
41,485
Total$461,269 $23,588 $16,939 $ 8,439 $510,235
Maximum Payout/Notional Amount of Purchased Credit Derivatives
Offsetting$381,715 $17,210 $12,806 $ 6,714 $418,445
Other$138,214 $ 7,780 $ 3,576 $ 1,322 $150,892
Fair Value of Written Credit Derivatives
Asset$ 9,803 $ 924 $ 318 $ 137 $ 11,182
Liability
941
123
1,666 1,933
4,663
Net asset/(liability)$ 8,862 $ 801 $ (1,348) $(1,796) $ 6,519
As of December 2020
Maximum Payout/Notional Amount of Written Credit Derivatives by TenorLess than 1 year
$ 96,049 $ 5,826 $ 450 $ 2,403 $104,728
1 - 5 years
331,145 17,913
8,801 4,932 362,791
Greater than 5 years
44,132
3,839
272
88
48,331
Total$471,326 $27,578 $ 9,523 $ 7,423 $515,850
Maximum Payout/Notional Amount of Purchased Credit Derivatives
Offsetting$407,315 $19,822 $ 8,679 $ 7,091 $442,907
Other$103,604 $ 7,272 $ 3,619 $ 776 $115,271
Fair Value of Written Credit Derivatives
Asset$ 10,302 $ 638 $ 256 $ 118 $ 11,314
Liability
1,112
1,119
387 2,001
4,619
Net asset/(liability)$ 9,190 $ (481) $ (131) $(1,883) $ 6,695

In the table above:‰ Fair values exclude the effects of both netting ofreceivable balances with payable balances underenforceable netting agreements, and netting of cash
received or posted under enforceable credit support
agreements, and therefore are not representative of thefirm’s credit exposure.
‰ Tenor is based on remaining contractual maturity.
‰ The credit spread on the underlier, together with the tenorof the contract, are indicators of payment/performancerisk. The firm is less likely to pay or otherwise be required
to perform where the credit spread and the tenor are
lower.
‰ Offsetting purchased credit derivatives represent thenotional amount of purchased credit derivatives that
economically hedge written credit derivatives withidentical underliers.
‰ Other purchased credit derivatives represent the notionalamount of all other purchased credit derivatives notincluded in offsetting.

146 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Impact of Credit and Funding Spreads on Derivatives
The firm realizes gains or losses on its derivative contracts.
These gains or losses include credit valuation adjustments(CVA) relating to uncollateralized derivative assets andliabilities, which represent the gains or losses (including
hedges) attributable to the impact of changes in credit
exposure, counterparty credit spreads, liability funding
spreads (which include the firm’s own credit), probabilityof default and assumed recovery. These gains or losses also
include funding valuation adjustments (FVA) relating touncollateralized derivative assets, which represent the gains
or losses (including hedges) attributable to the impact ofchanges in expected funding exposures and funding
spreads.
The table below presents information about CVA and FVA.
Year Ended December$ in millions

2021

2020

2019

CVA, net of hedges
FVA, net of hedges
Total

$25
60
$85

$(143)
173$ 30$(289)485$ 196

Bifurcated Embedded Derivatives
The table below presents the fair value and the notionalamount of derivatives that have been bifurcated from theirrelated borrowings.
As of December$ in millions

2021

2020

845
(124)
721

$ 1,450(1,220)$ 230$10,743$12,548

Fair value of assets
Fair value of liabilities
Net asset/(liability)$

Notional amount$The table below presents information about net derivative
liabilities under bilateral agreements (excluding collateralposted), the fair value of collateral posted and additional
collateral or termination payments that could have beencalled by counterparties in the event of a one- or two-notch
downgrade in the firm’s credit ratings.
As of December$ in millions

2021

2020

Net derivative liabilities under bilateral agreements $34,315
Collateral posted$29,214Additional collateral or termination payments:
One-notch downgrade$ 345
Two-notch downgrade$ 1,536$43,368$35,296$ 481$ 1,388

Hedge Accounting
The firm applies hedge accounting for (i) interest rate swaps
used to manage the interest rate exposure of certain fixedrate unsecured long- and short-term borrowings and certain
fixed-rate certificates of deposit, (ii) foreign exchange
forward contracts used to manage the foreign exchange riskof certain available-for-sale securities, (iii) foreign currency
forward contracts and foreign currency-denominated debt
used to manage foreign currency exposures on the firm’s
net investment in certain non-U.S. operations and(iv) commodity futures contracts used to manage the pricerisk of certain commodities.
To qualify for hedge accounting, the hedging instrument
must be highly effective at reducing the risk from theexposure being hedged. Additionally, the firm mustformally document the hedging relationship at inception
and assess the hedging relationship at least on a quarterly
basis to ensure the hedging instrument continues to behighly effective over the life of the hedging relationship.

In the table above, derivatives that have been bifurcatedfrom their related borrowings are recorded at fair value andprimarily consist of interest rate, equity and commodity
products. These derivatives are included in unsecured shortand long-term borrowings, as well as other secured
financings, with the related borrowings.
Derivatives with Credit-Related Contingent Features
Certain of the firm’s derivatives have been transacted underbilateral agreements with counterparties who may require
the firm to post collateral or terminate the transactions
based on changes in the firm’s credit ratings. The firm
assesses the impact of these bilateral agreements bydetermining the collateral or termination payments thatwould occur assuming a downgrade by all rating agencies.
A downgrade by any one rating agency, depending on theagency’s relative ratings of the firm at the time of thedowngrade, may have an impact which is comparable tothe impact of a downgrade by all rating agencies.

Goldman Sachs 2021 Form 10-K 147

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Fair Value Hedges
The firm designates interest rate swaps as fair value hedgesof certain fixed-rate unsecured long- and short-term debt
and fixed-rate certificates of deposit. These interest rate
swaps hedge changes in fair value attributable to thedesignated benchmark interest rate (e.g., London Interbank
Offered Rate (LIBOR), Secured Overnight Financing Rate
(SOFR) or Overnight Index Swap Rate), effectively
converting a substantial portion of fixed-rate obligations
into floating-rate obligations.
The firm applies a statistical method that utilizes regression
analysis when assessing the effectiveness of these hedging
relationships in achieving offsetting changes in the fairvalues of the hedging instrument and the risk being hedged(i.e., interest rate risk). An interest rate swap is consideredhighly effective in offsetting changes in fair value
attributable to changes in the hedged risk when the
regression analysis results in a coefficient of determinationof 80% or greater and a slope between 80% and 125%.
For qualifying interest rate fair value hedges, gains or losses
on derivatives are included in interest expense. The change
in fair value of the hedged item attributable to the risk being
hedged is reported as an adjustment to its carrying value(hedging adjustment) and is also included in interest
expense. When a derivative is no longer designated as ahedge, any remaining difference between the carrying value
and par value of the hedged item is amortized in interest
expense over the remaining life of the hedged item using theeffective interest method. See Note 23 for further
information about interest income and interest expense.
The table below presents the gains/(losses) from interest
rate derivatives accounted for as hedges and the related
hedged borrowings and deposits, and total interest expense.
Year Ended December$ in millions

Interest rate hedges
Hedged borrowings and deposits
Interest expense

2021

2020

2019

$(6,638)$ 6,085$ 5,650$ 3,862$(4,557)$ 8,938$ 3,196$ (3,657)$17,376

The table below presents the carrying value of deposits andunsecured borrowings that are designated in a hedging
relationship and the related cumulative hedging adjustment(increase/(decrease)) from current and prior hedging
relationships included in such carrying values.
Carrying
Value

Cumulative
Hedging
Adjustment

As of December 2021
Deposits
Unsecured short-term borrowings
Unsecured long-term borrowings$ 14,131$ 2,167$144,934$ 246$
5$ 6,169

As of December 2020
Deposits
Unsecured short-term borrowings
Unsecured long-term borrowings$ 17,303$ 5,976$115,242

$ 649
$
53
$11,624$ in millions

148 Goldman Sachs 2021 Form 10-K

In the table above, cumulative hedging adjustment included$5.91 billion as of December 2021 and $6.34 billion as ofDecember 2020 of hedging adjustments from prior hedging
relationships that were de-designated and substantially all
were related to unsecured long-term borrowings.
In addition, cumulative hedging adjustments for items nolonger designated in a hedging relationship were
$68 million as of December 2021 and $489 million as ofDecember 2020 and substantially all were related to
unsecured long-term borrowings.
The firm designates foreign exchange forward contracts asfair value hedges of the foreign exchange risk of non-U.S.
government securities classified as available-for-sale. See
Note 8 for information about the amortized cost and fairvalue of such securities. The effectiveness of such hedges isassessed based on changes in spot rates. The gains/(losses)on the hedges (relating to both spot and forward points)
and the foreign exchange gains/(losses) on the related
available-for-sale securities were included in market
making and were not material for both 2021 and 2020.
During 2021, the firm designated commodity futurescontracts as fair value hedges of the price risk of certain
precious metals included in commodities within trading
assets. As of December 2021, the carrying value of suchcommodities was $1.05 billion and the amortized cost was$1.02 billion. Changes in spot rates of such commodities
are reflected as an adjustment to their carrying value, andthe related gains/(losses) on both the commodities and thedesignated futures contracts are included in market making.
The contractual forward points on the designated futurescontracts are amortized into earnings ratably over the life of
the contract and other gains/(losses) as a result of changes in
the forward points are included in other comprehensive
income/(loss). The cumulative hedging adjustment was notmaterial as of December 2021 and the related gains/(losses)
were not material for 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Net Investment Hedges
The firm seeks to reduce the impact of fluctuations inforeign exchange rates on its net investments in certain
non-U.S. operations through the use of foreign currency
forward contracts and foreign currency-denominated debt.
For foreign currency forward contracts designated ashedges, the effectiveness of the hedge is assessed based on
the overall changes in the fair value of the forward contracts(i.e., based on changes in forward rates). For foreign
currency-denominated debt designated as a hedge, theeffectiveness of the hedge is assessed based on changes inspot rates. For qualifying net investment hedges, all gains orlosses on the hedging instruments are included in currencytranslation.

Note 8.

The table below presents the gains/(losses) from net
investment hedging.

$ in millions

Year Ended December$ in millions

2021

2020

2019

Hedges:Foreign currency forward contract
Foreign currency-denominated debt

$755
$386

$(126)$(297)$ 6$(19)

Gains or losses on individual net investments in non-U.S.
operations are reclassified from accumulated othercomprehensive income/(loss) to other principal transactionsin the consolidated statements of earnings when such net
investments are sold or substantially liquidated. The grossand net gains and losses on hedges and the related net
investments in non-U.S. operations reclassified to earnings
from accumulated other comprehensive income/(loss) was
not material for 2021, $61 million (reflecting a gain of$214 million related to hedges and a loss of $153 million on
the related net investments in non-U.S. operations) for 2020and not material for 2019.
The firm had designated $3.71 billion as of December 2021
and $4.97 billion as of December 2020 of foreign currencydenominated debt, included in unsecured long- and shortterm borrowings, as hedges of net investments in non-U.S.
subsidiaries.

Investments
Investments includes debt instruments and equity securities
that are accounted for at fair value and are generally held by
the firm in connection with its long-term investing
activities. In addition, investments includes debt securities
classified as available-for-sale and held-to-maturity that are
generally held in connection with the firm’s asset-liability
management activities. Investments also consists of equity
securities that are accounted for under the equity method.
The table below presents information about investments.
As of December

Equity securities, at fair value
Debt instruments, at fair value
Available-for-sale securities, at fair value
Investments, at fair value
Held-to-maturity securities
Equity method investments
Total investments

2021

2020

$18,937
15,55848,932
83,427
4,699
593$88,719$19,781
16,98146,01682,7785,301
366$88,445

Equity Securities and Debt Instruments, at Fair Value
Equity securities and debt instruments, at fair value areaccounted for at fair value either under the fair value option
or in accordance with other U.S. GAAP, and the related fairvalue gains and losses are recognized in the consolidated
statements of earnings.
Equity Securities, at Fair Value. Equity securities, at fairvalue consists of the firm’s public and private equity
investments in corporate and real estate entities.
The table below presents information about equity
securities, at fair value.
As of December$ in millions

2021

2020

$18,937$19,781

Equity Type
Public equity
Private equity
Total

24%
76%
100%

15%
85%
100%

Asset Class
Corporate
Real estate
Total

78%
22%
100%

83%
17%
100%

Equity securities, at fair value

Goldman Sachs 2021 Form 10-K 149

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above:‰ Equity securities, at fair value included investments
accounted for at fair value under the fair value option
where the firm would otherwise apply the equity methodof accounting of $5.81 billion as of December 2021 and$7.14 billion as of December 2020. Gains recognized as aresult of changes in the fair value of equity securities forwhich the fair value option was elected were $2.12 billion
for 2021 and $573 million for 2020. These gains areincluded in other principal transactions.
‰ Equity securities, at fair value included $1.80 billion as ofDecember 2021 and $2.35 billion as of December 2020of investments in funds that are measured at NAV.
Debt Instruments, at Fair Value. Debt instruments, atfair value primarily includes mezzanine, senior anddistressed debt.
The table below presents information about debt
instruments, at fair value.
As of December$ in millions

Corporate debt securities
Securities backed by real estate
Money market instruments
Other
Total

2021

2020

$ 9,793
2,280
1,396
2,089
$15,558$10,991
1,940
2,185
1,865
$16,981

In the table above:‰ Money market instruments primarily includes time
deposits and investments in money market funds.
‰ Other included $1.67 billion as of December 2021 and$1.31 billion as of December 2020 of investments incredit funds that are measured at NAV.
Investments in Funds at Net Asset Value Per Share.
Equity securities and debt instruments, at fair value include
investments in funds that are measured at NAV of theinvestment fund. The firm uses NAV to measure the fairvalue of fund investments when (i) the fund investment does
not have a readily determinable fair value and (ii) the NAVof the investment fund is calculated in a manner consistent
with the measurement principles of investment company
accounting, including measurement of the investments atfair value.
Substantially all of the firm’s investments in funds at NAV
consist of investments in firm-sponsored private equity,
credit, real estate and hedge funds where the firm co-invests
with third-party investors.

150 Goldman Sachs 2021 Form 10-K

Private equity funds primarily invest in a broad range ofindustries worldwide, including leveraged buyouts,
recapitalizations, growth investments and distressed
investments. Credit funds generally invest in loans andother fixed income instruments and are focused onproviding private high-yield capital for leveraged andmanagement buyout transactions, recapitalizations,financings, refinancings, acquisitions and restructurings forprivate equity firms, private family companies andcorporate issuers. Real estate funds invest globally,
primarily in real estate companies, loan portfolios, debt
recapitalizations and property. Private equity, credit andreal estate funds are closed-end funds in which the firm’s
investments are generally not eligible for redemption.
Distributions will be received from these funds as theunderlying assets are liquidated or distributed, the timing of
which is uncertain.
The firm also invests in hedge funds, primarily multidisciplinary hedge funds that employ a fundamental
bottom-up investment approach across various asset classes
and strategies. The firm’s investments in hedge funds
primarily include interests where the underlying assets are
illiquid in nature, and proceeds from redemptions will not
be received until the underlying assets are liquidated or
distributed, the timing of which is uncertain.
Private equity and hedge funds described above are
primarily “covered funds” as defined in the Volcker Rule of
the U.S. Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). Substantially all of thecredit and real estate funds described above are not covered
funds. The Board of Governors of the Federal Reserve
System (FRB) extended the conformance period toJuly 2022 for the firm’s investments in, and relationships
with, certain legacy “illiquid funds” (as defined in the
Volcker Rule) that were in place prior to December 2013.
This extension is applicable to substantially all of the firm’s
remaining investments in, and relationships with, suchcovered funds. As of December 2021, the firm’s total
investments in funds at NAV of $3.47 billion included$903 million of investments in covered funds for which
compliance with the Volcker Rule will need to be achievedby July 2022.
The firm expects to achieve compliance for these covered
funds through ongoing harvesting of underlying fundinvestments in the ordinary course or through structuralmodifications to these funds. To the extent that the firm is
not able to achieve compliance through these measures, thefirm will be required to sell its interests in such funds by
July 2022. If that occurs, the firm may receive a value for its
interests that is less than the then carrying value as there
could be a limited secondary market for these investments
and the firm may be unable to sell them in orderlytransactions.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents the fair value of investments infunds at NAV and the related unfunded commitments.
Fair Value ofInvestments

UnfundedCommitments

As of December 2021
Private equity funds
Credit funds
Hedge funds
Real estate funds
Total$1,411
1,686
84
288$3,469

$ 619
556
–
147
$1,322As of December 2020
Private equity funds
Credit funds
Hedge funds
Real estate funds
Total$2,042
1,312
102
208
$3,664

$ 557
680
–
213
$1,450$ in millions

Available-for-Sale Securities
Available-for-sale securities are accounted for at fair value,
and the related unrealized fair value gains and losses areincluded in accumulated other comprehensive income/(loss)
unless designated in a fair value hedging relationship. See
Note 7 for information about available-for-sale securities
that are designated in a hedging relationship.
The
table
below
presents
information
available-for-sale securities by tenor.

about

Fair
Value

Weighted
Average
Yield

25 $
25
41,536 41,066
5,337
5,229
2
2
46,900 46,322

0.12%
0.47%
0.92%
2.00%
0.53%

5 years to 10 years
2,693
2,610
Total non-U.S. government obligations 2,693
2,610
Total available-for-sale securities$49,593 $48,932

0.33%
0.33%
0.52%

As of December 2020
Less than 1 year
1 year to 5 years
5 years to 10 years
Total U.S. government obligations

25 $2535,831 36,158
7,454
7,732
43,310 43,915

0.08%
0.70%
1.19%
0.78%

1,739
1,744
353
357
2,092
2,101
$45,402 $46,016

0.10%
0.74%
0.21%
0.76%

$ in millions

As of December 2021
Less than 1 year
1 year to 5 years
5 years to 10 years
Greater than 10 years
Total U.S. government obligations

5 years to 10 years
Greater than 10 years
Total non-U.S. government obligations
Total available-for-sale securities

Amortized
Cost

$

$

In the table above:‰ Available-for-sale securities were classified in level 1 of
the fair value hierarchy as of both December 2021 andDecember 2020.
‰ The weighted average yield for available-for-salesecurities is computed using the effective interest rate ofeach security at the end of the period, weighted based on
the fair value of each security.
‰ The gross unrealized gains included in accumulated othercomprehensive income/(loss) were $118 million and thegross unrealized losses included in accumulated othercomprehensive income/(loss) were $779 million as ofDecember 2021 and primarily related to U.S. government
obligations in a continuous unrealized loss position forless than a year. The gross unrealized gains included inaccumulated other comprehensive income/(loss) were$631 million and the gross unrealized losses included inaccumulated other comprehensive income/(loss) were notmaterial as of December 2020. Net unrealized gains/(losses) included in other comprehensive income/(loss)
were $(1.28) billion ($(955) million, net of tax) for 2021
and $557 million ($417 million, net of tax) for 2020.
‰ If the fair value of available-for-sale securities is less thanamortized cost, such securities are considered impaired. If
the firm has the intent to sell the debt security, or if it ismore likely than not that the firm will be required to sell
the debt security before recovery of its amortized cost, thedifference between the amortized cost (net of allowance,
if any) and the fair value of the securities is recognized as
an impairment loss in earnings. The firm did not record
any such impairment losses during either 2021 or 2020.
Impaired available-for-sale debt securities that the firm
has the intent and ability to hold are reviewed todetermine if an allowance for credit losses should berecorded. The firm considers various factors in suchdetermination, including market conditions, changes inissuer credit ratings and severity of the unrealized losses.
The firm did not record any provision for credit losses onsuch securities during either 2021 or 2020.

Goldman Sachs 2021 Form 10-K 151

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents gross realized gains/(losses) andthe proceeds from the sales of available-for-sale securities.
Year Ended December$ in millions

2021

2020

2019

Gross realized gains
Gross realized losses
Gains/(losses)

$

206
(19)
187

$ 319
–
$ 319

$ 181
–
$ 181

Proceeds from sales$24,882$4,489$9,580$In the table above, the realized gains/(losses) werereclassified from accumulated other comprehensive income/(loss) to other principal transactions in the consolidated
statements of earnings.
Fair Value of Investments by Level
The table below presents investments accounted for at fairvalue by level within the fair value hierarchy.
$ in millions

Level 1

Level 2

Level 3Total

As of December 2021
Government and agency obligations:U.S.
$46,322 $– $– $46,322
Non-U.S.
2,612
–
–
2,612
Corporate debt securities
65
5,201
4,527
9,793
Securities backed by real estate
–
1,202
1,078
2,280
Money market instruments
41
1,355
–
1,396
Other debt obligations
–
35
382
417
Equity securities
2,135
7,088
7,915 17,138
Subtotal$51,175 $14,881 $13,902 $79,958
Investments in funds at NAV
3,469
Total investments$83,427
As of December 2020
Government and agency obligations:U.S.
$43,915 $– $– $43,915
Non-U.S.
2,109
48
–
2,157
Corporate debt securities
70
5,635
5,286 10,991
Securities backed by real estate
–
942
998
1,940
Money market instruments
781
1,404
–
2,185
Other debt obligations
–
–
497
497
Equity securities
517
7,270
9,642 17,429
Subtotal$47,392 $15,299 $16,423 $79,114
Investments in funds at NAV
3,664
Total investments$82,778

See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value ofinvestments.

152 Goldman Sachs 2021 Form 10-K

Significant Unobservable Inputs
The table below presents the amount of level 3 investments,
and ranges and weighted averages of significant
unobservable inputs used to value such investments.
As of December 2021
$ in millions

Amount or Weighted
Range Average

Corporate debt securities
Level 3 assets$4,527Yield
2.0% to 29.0%
Recovery rate
9.1% to 76.0%
Duration (years)
1.4 to 6.4
Multiples
0.5x to 28.2x
Securities backed by real estate
Level 3 assets$1,078Yield
8.3% to 20.3%
Recovery rate
55.1% to 61.0%
Duration (years)
0.1 to 2.6
Other debt obligations
Level 3 assets
$382
Yield
2.3% to 10.6%
Duration (years)
0.9 to 9.3
Equity securities
Level 3 assets$7,915Multiples
0.4x to 30.5x
Discount rate/yield 2.0% to 35.0%
Capitalization rate 3.5% to 14.0%

As of December 2020
Amount or Weighted
Range Average$5,286
10.8% 4.5% to 19.5%
59.1% 10.0% to 70.0%
3.8
3.0 to 7.7
6.9x
0.6x to 29.3x

10.2%
50.7%
4.2
6.9x

$998
13.1% 8.2% to 52.4%
56.4% 21.6% to 57.8%
1.2
0.4 to 3.6

17.5%
33.7%
2.7

3.2%
4.8

$497
1.7% to 6.2%
0.2 to 10.3

3.5%
6.4

10.1x
14.1%
5.7%

$9,6420.6x to 27.9x
4.0% to 38.5%
3.7% to 14.1%

9.0x
13.5%
6.3%

In the table above:‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of investment.
‰ Weighted averages are calculated by weighting each input
by the relative fair value of the investment.
‰ The ranges and weighted averages of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one investment. For
example, the highest multiple for private equity securities
is appropriate for valuing a specific private equity security
but may not be appropriate for valuing any other private
equity security. Accordingly, the ranges of inputs do not
represent uncertainty in, or possible ranges of, fair value
measurements of level 3 investments.
‰ Increases in yield, discount rate, capitalization rate or
duration used in the valuation of level 3 investments
would have resulted in a lower fair value measurement,
while increases in recovery rate or multiples would haveresulted in a higher fair value measurement as of both
December 2021 and December 2020. Due to the
distinctive nature of each level 3 investment, theinterrelationship of inputs is not necessarily uniform
within each product type.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Corporate debt securities, securities backed by real estateand other debt obligations are valued using discounted
cash flows, and equity securities are valued using market
comparables and discounted cash flows.

The table below presents information, by product type, forinvestments included in the summary table above.

‰ The fair value of any one instrument may be determinedusing multiple valuation techniques. For example, market
comparables and discounted cash flows may be used
together to determine fair value. Therefore, the level 3
balance encompasses both of these techniques.

$ in millions

Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 investments.
Year Ended December$ in millions

Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

2021

2020

$16,423
449
1,263
1,600
(2,135)(3,265)
3,080(3,513)$13,902$15,282
215
(443)
1,815
(1,550)(1,570)4,708(2,034)$16,423

In the table above:‰ Changes in fair value are presented for all investmentsthat are classified in level 3 as of the end of the period.
‰ Net unrealized gains/(losses) relates to investments thatwere still held at period-end.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If an investment was transferred to level 3
during a reporting period, its entire gain or loss for theperiod is classified in level 3.
‰ For level 3 investments, increases are shown as positive
amounts, while decreases are shown as negative amounts.

Year Ended December

Corporate debt securities
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance
Securities backed by real estate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance
Other debt obligations
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance
Equity securities
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

2021

2020

$ 5,286
167
311
431
(594)
(1,876)
1,871(1,069)$ 4,527$ 3,465
110
(96)
636
(302)
(678)
2,661
(510)
$ 5,286

$

998
45
6
182
(44)
(234)
142
(17)
$ 1,078

$

$

$

$

497
12
1
63
(96)
–
(95)
382

$ 9,642225
945
924(1,497)(1,059)1,067(2,332)$ 7,915

$

$

595
22
(96)
233
–
(83)
327
–
998
319
15
1
113
(45)
94
–
497

$10,903
68
(252)
833
(1,248)(764)
1,626(1,524)$ 9,642

Level 3 Rollforward Commentary
Year Ended December 2021. The net realized andunrealized gains on level 3 investments of $1.71 billion(reflecting $449 million of net realized gains and$1.26 billion of net unrealized gains) for 2021 included
gains of $1.53 billion reported in other principaltransactions and $180 million reported in interest income.
The net unrealized gains on level 3 investments for 2021
primarily reflected gains on certain private equity securities
and corporate debt securities (in each case, principally
driven by corporate performance and company-specific
events).

Goldman Sachs 2021 Form 10-K 153

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Transfers into level 3 investments during 2021 primarilyreflected transfers of certain corporate debt securities fromlevel 2 (principally due to reduced price transparency as aresult of a lack of market evidence, including fewer market
transactions in these instruments, and certain unobservable
yield and duration inputs becoming significant to thevaluation of these instruments) and transfers of certain
private equity securities from level 2 (principally due toreduced price transparency as a result of a lack of market
evidence, including fewer market transactions in these
instruments).
Transfers out of level 3 investments during 2021 primarilyreflected transfers of certain private equity securities tolevel 2 (principally due to increased price transparency as aresult of market evidence, including market transactions inthese instruments) and transfers of certain corporate debt
securities to level 2 (principally due to certain unobservable
yield and duration inputs no longer being significant to thevaluation of these instruments, and increased pricetransparency as a result of market evidence, including
market transactions of these instruments).
Year Ended December 2020. The net realized andunrealized losses on level 3 investments of $228 million(reflecting $215 million of net realized gains and$443 million of net unrealized losses) for 2020 included
losses of $428 million reported in other principaltransactions and $200 million reported in interest income.
The net unrealized losses on level 3 investments for 2020reflected losses on certain private equity, corporate debt
securities and securities backed by real estate (in each case,principally driven by corporate performance).
Transfers into level 3 investments during 2020 primarilyreflected transfers of certain corporate debt securities fromlevel 2 (principally due to reduced price transparency as aresult of a lack of market evidence, including fewertransactions in these instruments, and certain unobservable
yield and duration inputs becoming significant to thevaluation of these instruments) and transfers of certain
private equity securities from level 2 (principally due toreduced price transparency as a result of a lack of market
evidence, including fewer transactions in these
instruments).
Transfers out of level 3 investments during 2020 primarilyreflected transfers of certain private equity securities andcorporate debt securities to level 2 (principally due toincreased price transparency as a result of market evidence,
including market transactions in these instruments).

154 Goldman Sachs 2021 Form 10-K

Held-to-Maturity Securities
Held-to-maturity securities are accounted for at amortizedcost.
The table below presents information about held-to-maturity
securities by type and tenor.

Amortized
Cost

Fair
Value

Weighted
Average
Yield

As of December 2021
1 year to 5 years
Total U.S. government obligations$4,054
4,054$4,200
4,200

2.30%
2.30%

5 years to 10 years
Greater than 10 years
Total securities backed by real estate
Total held-to-maturity securities

3
642
645
$4,6993670
673$4,873

2.78%
1.03%
1.04%
2.13%

As of December 2020
Less than 1 year
1 year to 5 years
5 years to 10 years
Total U.S. government obligations

$ 501
2,529
1,531
4,561

$ 513
2,695
1,675
4,883

2.53%
2.34%
2.25%
2.33%

5 years to 10 years
Greater than 10 years
Total securities backed by real estate
Total held-to-maturity securities

4
736
740
$5,301

3751
754$5,637

2.56%
1.08%
1.08%
2.15%

$ in millions

In the table above:‰ Substantially all of the securities backed by real estate
consist of securities backed by residential real estate.
‰ As these securities are not accounted for at fair value, they
are not included in the firm’s fair value hierarchy inNotes 4 through 10. Had these securities been included in
the firm’s fair value hierarchy, U.S. government
obligations would have been classified in level 1 andsecurities backed by real estate would have been primarily
classified in level 2 of the fair value hierarchy as of both
December 2021 and December 2020.
‰ The weighted average yield for held-to-maturity securities
is computed using the effective interest rate of eachsecurity at the end of the period, weighted based on theamortized cost of each security.
‰ The gross unrealized gains were $175 million as ofDecember 2021 and $340 million as of December 2020.
The gross unrealized losses were not material as of both
December 2021 and December 2020.
‰ Held-to-maturity securities are reviewed to determine if
an allowance for credit losses should be recorded in the
consolidated statements of earnings. The firm considers
various factors in such determination, including market
conditions, changes in issuer credit ratings, historicalcredit losses and sovereign guarantees. Provision for
credit losses on such securities was not material during
either 2021 or 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 9.

Loans
Loans include (i) loans held for investment that are
accounted for at amortized cost net of allowance for loan
losses or at fair value under the fair value option and(ii) loans held for sale that are accounted for at the lower ofcost or fair value. Interest on loans is recognized over thelife of the loan and is recorded on an accrual basis.
The table below presents information about loans.

$ in millions

Amortized
Cost

As of December 2021
Loan Type
Corporate$ 50,960
Wealth management
38,062
Commercial real estate
21,150Residential real estate
15,493
Consumer:
Installment
3,672
Credit cards
8,212
Other
5,958
Total loans, gross
143,507
Allowance for loan losses(3,573)
Total loans$139,934
As of December 2020
Loan Type
Corporate$ 44,778
Wealth management
25,151
Commercial real estate
17,096
Residential real estate
5,236
Consumer:
Installment
3,823
Credit cards
4,270
Other
3,211
Total loans, gross
103,565
Allowance for loan losses(3,874)
Total loans$ 99,691

Fair
Value

Held For
Sale

Total

$ 2,492
5,936
1,588
320

$2,475–3,145
100$ 55,927
43,99825,883
15,913––433
10,769–$10,769

–
–
2,139
7,859
–
$7,859

3,672
8,212
8,530
162,135(3,573)$158,562$ 2,751
7,872
1,961
494

$1,130–1,233
20$ 48,659
33,023
20,290
5,750

–
–
547
13,625–$13,625

–
–
416
2,799
–
$2,799

3,823
4,270
4,174
119,989(3,874)$116,115

In the table above, loans held for investment that are
accounted for at amortized cost include net deferred fees
and costs, and unamortized premiums and discounts, which
are amortized over the life of the loan. These amounts wereless than 1% of loans accounted for at amortized cost as ofboth December 2021 and December 2020.
The following is a description of the loan types in the table
above:‰ Corporate. Corporate loans includes term loans,revolving lines of credit, letter of credit facilities andbridge loans, and are principally used for operating andgeneral corporate purposes, or in connection withacquisitions. Corporate loans may be secured or
unsecured, depending on the loan purpose, the risk profileof the borrower and other factors.

‰ Wealth Management. Wealth management loans
includes loans extended to private bank clients, including
wealth management and other clients. These loans areused to finance investments in both financial andnonfinancial assets, bridge cash flow timing gaps orprovide liquidity for other needs. Substantially all of suchloans are secured by securities, residential real estate,commercial real estate or other assets.
‰ Commercial Real Estate. Commercial real estate loans
includes originated loans (other than those extended to
private bank clients) that are directly or indirectly securedby hotels, retail stores, multifamily housing complexes
and commercial and industrial properties. Commercial
real estate loans also includes loans extended to clients
who warehouse assets that are directly or indirectly
backed by commercial real estate. In addition,commercial real estate includes loans purchased by thefirm.
‰ Residential Real Estate. Residential real estate loans
primarily includes loans extended by the firm to clients(other than those extended to private bank clients) who
warehouse assets that are directly or indirectly secured byresidential real estate and loans purchased by the firm.
‰ Installment. Installment loans are unsecured and are
originated by the firm.
‰ Credit Cards. Credit card loans are loans made pursuant
to revolving lines of credit issued to consumers by thefirm.
‰ Other. Other loans primarily includes loans extended toclients who warehouse assets that are directly or
indirectly secured by consumer loans, including autoloans and private student loans, and other assets. Otherloans also includes unsecured consumer and credit cardloans purchased by the firm.
Credit Quality
Risk Assessment. The firm’s risk assessment processincludes evaluating the credit quality of its loans by our
independent risk oversight and control function. For
corporate loans and a majority of wealth management, realestate and other loans, the firm performs credit reviews
which include initial and ongoing analyses of its borrowers,
resulting in an internal credit rating. A credit review is ananalysis of the capacity and willingness of a borrower tomeet its financial obligations and is performed on an annual
basis or more frequently if circumstances change thatindicate that a review may be necessary. The determinationof internal credit ratings also incorporates assumptions
with respect to the nature of and outlook for the borrower’s
industry and the economic environment.
Goldman Sachs 2021 Form 10-K 155

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents gross loans by an internallydetermined public rating agency equivalent or other credit
metrics and the concentration of secured and unsecuredloans.

$ in millions

Investment- Non-Investment- Other Metrics/
Grade
Grade
Unrated

Total

As of December 2021
Accounting Method
Amortized cost
Fair value
Held for sale
Total
Loan Type
Corporate
Wealth management
Real estate:
Commercial
Residential
Consumer:
Installment
Credit cards
Other
Total
SecuredUnsecured
Total$50,9232,301
1,650$54,874$75,179
4,634
4,747$84,560$17,405 $143,507
3,834
10,7691,462
7,859$22,701 $162,135$15,370
31,476$40,389
5,730

$

3,986
1,112

21,523
13,779––2,930$54,874––
3,139$84,560

85%
15%
100%

92%
8%
100%

$33,5322,084
224$35,840$58,250
5,925
2,152$66,327$11,783 $103,565
5,616
13,625423
2,799$17,822 $119,989$ 9,478
22,098$38,704
5,331

$

1,792
636

17,480
3,852

–
–
1,836
$35,840––960$66,327

83%
17%
100%

90%
10%
100%

168 $ 55,927
6,792
43,998374
1,022

25,883
15,913

3,672
3,672
8,212
8,212
2,461
8,530
$22,701 $162,135
36%
64%
100%

82%
18%
100%

As of December 2020
Accounting Method
Amortized cost
Fair value
Held for sale
Total
Loan Type
Corporate
Wealth management
Real estate:
Commercial
Residential
Consumer:
Installment
Credit cards
Other
Total
SecuredUnsecured
Total

156 Goldman Sachs 2021 Form 10-K

477 $ 48,659
5,594
33,023
1,018
1,262

20,290
5,750

3,823
3,823
4,270
4,270
1,378
4,174
$17,822 $119,989
46%
54%
100%

82%
18%
100%

In the table above:‰ Wealth management loans included in the other metrics/
unrated category primarily consists of loans backed byresidential real estate and securities, and real estate loans
included in the other metrics/unrated category primarily
consists of purchased loans. The firm’s risk assessment
process for these loans includes reviewing certain key
metrics, such as loan-to-value ratio, delinquency status,
collateral values, expected cash flows, the Fair Isaac
Corporation (FICO) credit score (which measures aborrower’s creditworthiness by considering factors suchas payment and credit history) and other risk factors.
‰ For installment and credit card loans included in the othermetrics/unrated category, the evaluation of credit quality
incorporates the borrower’s FICO credit score. FICO
credit scores are periodically refreshed by the firm toassess the updated creditworthiness of the borrower. See“Vintage” below for information about installment andcredit card loans by FICO credit scores.
The firm also assigns a regulatory risk rating to its loans
based on the definitions provided by the U.S. federal bankregulatory agencies. Total loans included 92% of loans asof December 2021 and 85% of loans as of December 2020
that were rated pass/non-criticized.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Vintage. The tables below present gross loans accounted
for at amortized cost (excluding installment and credit cardloans) by an internally determined public rating agency
equivalent or other credit metrics and origination year forterm loans.
As of December 2021
$ in millions

Investment- Non-Investment-Other Metrics/
Grade
Grade
Unrated2021$ 4,687
2020
1,911
2019
451
2018
1,842
2017
733
2016 or earlier
274
Revolving
3,800
Corporate
13,698
2021
1,405
2020
558
2019
537
2018
334
2017
380
2016 or earlier
565
Revolving
26,349Wealth management 30,128
2021
334
2020
127
2019
52
2018
207
2017
398
2016 or earlier
405
Revolving
1,768
Commercial real estate 3,291
2021
113
2020
260
2019
–
2018
–
2017
8
2016 or earlier–
Revolving
673
Residential real estate
1,054
2021
–
2020
–
2019
–
2018
–
2017
–
Revolving
2,752
Other
2,752
Total
$50,923
Percentage of total

39%$10,424
4,561
3,949
2,901
1,857
1,693
11,744
37,129
1,186
287
352
38
31
243
2,127
4,264
4,084
1,890
1,336
829
624
583
8,412
17,758
1,944
557
–
84
65
1
10,91913,570
694
59
25
30
5
1,645
2,458
$75,179
57%

Total

$

52 $ 15,163
7
6,479
–
4,400
–
4,743
–
2,590
–
1,967
74
15,618133 50,960
1,265
3,856
–
845
–
889
–
372
–
411
–
808
2,405 30,881
3,670 38,062
94
4,512
–
2,017
–
1,388
–
1,036
–
1,022
7
995
–
10,180101 21,150
253
2,310
103
920
173
173
165
249
119
192
56
57
–
11,592869 15,493
261
955
378
437
19
44
–
30
8
13
82
4,479
748
5,958
$5,521 $131,623
4%

As of December 2020
$ in millions

Investment- Non-Investment- Other Metrics/
Grade
Grade
Unrated

2020
2019
2018
2017
2016
2015 or earlier
Revolving
Corporate
2020
2019
2018
2017
2016
2015 or earlier
Revolving
Wealth management
2020
2019
2018
2017
2016
2015 or earlier
Revolving
Commercial real estate
2020
2019
2018
2017
2016
2015 or earlier
Revolving
Residential real estate
2020
2019
2018
2017
Revolving
Other
Total
Percentage of total$ 1,978
889
2,076
851
268
351
2,662
9,075
497
723
298
377
22
531
18,077
20,525
848
76
137
26
–
–
461
1,548
402
–
–
9
–
–
225
636
242
–
–
–
1,506
1,748
$33,532$ 7,545
6,106
3,555
3,083
1,262
2,073
11,89135,515
313
403
87
30
20
264
2,085
3,202
3,071
1,965
2,164
1,734
165
775
5,047
14,921
976
90
123
83
1
–
2,470
3,743
84
67
46
8
664
869
$58,250

35%

61%

Total

$ 140 $ 9,663
–
6,995
–
5,631
–
3,934
–
1,530
–
2,424
48 14,601
188 44,778
–
810
–
1,126
–
385
–
407
–
42
–
795
1,424 21,586
1,424 25,151
55
3,974
–
2,041
25
2,326
12
1,772
9
174
526
1,301
–
5,508
627 17,096
115
1,493
271
361
249
372
152
244
–
1
70
70
–
2,695
857
5,236
466
792
29
96
–
46
–
8
99
2,269
594
3,211
$3,690 $95,472
4%

100%

In the tables above, revolving loans which converted toterm loans were not material as of both December 2021
and December 2020.

100%

Goldman Sachs 2021 Form 10-K 157

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents gross installment loans byrefreshed FICO credit scores and origination year and grosscredit card loans by refreshed FICO credit scores.

$ in millions

Greater than orequal to 660

As of December 2021
2021
2020
2019
2018
2017
2016
Installment
Credit cards
Total$2,017
665
508
257
32
1
3,480
6,100
$9,580Percentage of total:
Installment
Credit cards
Total

95%
74%
81%

As of December 2020
2020
2019
2018
2017
2016
Installment
Credit cards
Total
Percentage of total:
Installment
Credit cards
Total

Less than 660

Total

$

42
40
61
42
7
–
192
2,112
$2,304$ 2,059
705
569
299
39
1
3,672
8,212
$11,884

5%
26%
19%

100%
100%
100%

$1,321
1,225
792
128
6
3,472
3,398
$6,870

38
132
150
30
1
351
872
$1,223$ 1,359
1,357
942
158
7
3,823
4,270
$ 8,093

91%
80%
85%

9%
20%
15%

100%
100%
100%

$

In the table above, credit card loans consist of revolving
lines of credit.
Credit Concentrations. The table below presents theconcentration of gross loans by region.

$ in millions

As of December 2021
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total
As of December 2020
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

Carrying
Value

Americas

EMEA

Asia

Total

$ 55,927
43,99825,883
15,913

54%
87%
80%
95%

38%
10%
15%
2%

8%
3%
5%
3%

100%
100%
100%
100%

3,672
8,212
8,530
$162,135

100%
100%
84%
76%

–
–
15%
19%

–
–
1%
5%

100%
100%
100%
100%

$ 48,659
33,023
20,290
5,750

60%
88%
71%
88%

31%
10%
19%
9%

9%
2%
10%
3%

100%
100%
100%
100%

3,823
4,270
4,174
$119,989

100%
100%
81%
75%

–
–
17%
19%

– 100%– 100%
2% 100%6% 100%158 Goldman Sachs 2021 Form 10-K

In the table above:‰ EMEA represents Europe, Middle East and Africa.
‰ The top five industry concentrations for corporate loans
as of December 2021 were 21% for funds (13% as ofDecember 2020), 18% for technology, media &telecommunications (17% as of December 2020), 13%
for diversified industrials (17% as of December 2020),
9% for natural resources & utilities (12% as ofDecember 2020), and 8% for financial institutions (10%as of December 2020).
Nonaccrual and Past Due Loans. Loans accounted for atamortized cost (other than credit card loans) are placed on
nonaccrual status when it is probable that the firm will notcollect all principal and interest due under the contractual
terms, regardless of the delinquency status or if a loan ispast due for 90 days or more, unless the loan is both wellcollateralized and in the process of collection. At that time,
all accrued but uncollected interest is reversed againstinterest income and interest subsequently collected isrecognized on a cash basis to the extent the loan balance isdeemed collectible. Otherwise, all cash received is used toreduce the outstanding loan balance. A loan is consideredpast due when a principal or interest payment has not been
made according to its contractual terms. Credit card loans
are not placed on nonaccrual status and accrue interest
until the loan is paid in full or is charged off.
In certain circumstances, the firm may modify the originalterms of a loan agreement by granting a concession to aborrower experiencing financial difficulty, typically in theform of a modification of loan covenants, but may also
include forbearance of interest or principal, payment
extensions or interest rate reductions. These modifications,to the extent significant, are considered troubled debt
restructurings (TDRs). Loan modifications that extend
payment terms for a period of less than 90 days are
generally considered insignificant and therefore notreported as TDRs.
The firm adopted the relief issued under the Coronavirus
Aid, Relief, and Economic Security Act (CARES Act), as
amended, and certain interpretive guidance issued by the
U.S. banking agencies that provides for certain modified
loans that would otherwise meet the definition of a TDR to
not be classified as such. Loans accounted for at amortizedcost that were not classified as TDRs as a result of this relief
and interpretive guidance were $166 million as ofDecember 2021 and were $184 million as ofDecember 2020. The relief provided under the CARES Act
expired in January 2022.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents information about past due loans.
$ in millions

As of December 2021
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

90 daysor more

Total

5
–
7
3

$ 90
20
143
4

$ 95
20
150
7

20
86
15
$136

7
71
3
$338

27
157
18
$474

30-89 days$

Total divided by gross loans at amortized cost
As of December 2020
Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

$

0.3%

–
58
49
4

$294
34
183
23

$294
92
232
27

42
46
20
$219

16
31
4
$585

58
77
24
$804

Total divided by gross loans at amortized cost

0.8%

The table below presents information about nonaccrualloans.
As of December$ in millions

Corporate
Wealth management
Commercial real estate
Residential real estate
Installment
Other
Total
Total divided by gross loans at amortized cost

2021

2020

$1,559
21
841
5
43
–
$2,469$2,651
61
649
25
44
122
$3,552

1.7%

3.4%

In the table above:‰ Nonaccrual loans included $254 million as ofDecember 2021 and $533 million as of December 2020 ofloans that were 30 days or more past due.
‰ Loans that were 90 days or more past due and still
accruing were not material as of both December 2021
and December 2020.

Allowance for Credit Losses
The firm’s allowance for credit losses consists of theallowance for losses on loans and lending commitments
accounted for at amortized cost. Loans and lending
commitments accounted for at fair value or accounted forat the lower of cost or fair value are not subject to anallowance for credit losses.
To determine the allowance for credit losses, the firmclassifies its loans and lending commitments accounted forat amortized cost into wholesale and consumer portfolios.
These portfolios represent the level at which the firm hasdeveloped and documented its methodology to determine
the allowance for credit losses. The allowance for credit
losses is measured on a collective basis for loans that exhibit
similar risk characteristics using a modeled approach andasset-specific basis for loans that do not share similar risk
characteristics.
The allowance for credit losses takes into account theweighted average of a range of forecasts of future economic
conditions over the expected life of the loan and lending
commitments. The expected life of each loan or lending
commitment is determined based on the contractual term
adjusted for extension options or demand features, or ismodeled in the case of revolving credit card loans. The
forecasts include baseline, favorable and adverse economic
scenarios over a three-year period. For loans with expected
lives beyond three years, the model reverts to historical loss
information based on a non-linear modeled approach. The
forecasted economic scenarios consider a number of risk
factors relevant to the wholesale and consumer portfolios
described below. The firm applies judgment in weighing
individual scenarios each quarter based on a variety offactors, including the firm’s internally derived economic
outlook, market consensus, recent macroeconomic
conditions and industry trends.
The allowance for credit losses also includes qualitative
components which allow management to reflect theuncertain nature of economic forecasting, capture
uncertainty regarding model inputs, and account for model
imprecision and concentration risk.

‰ Nonaccrual loans included $267 million as ofDecember 2021 and $315 million as of December 2020 ofcorporate and commercial real estate loans that weremodified in a TDR. The firm’s lending commitments
related to these loans were not material as of both
December 2021 and December 2020. Installment loansthat were modified in a TDR were not material as of both
December 2021 and December 2020.
‰ Allowance for loan losses as a percentage of total
nonaccrual loans was 144.7% as of December 2021 and109.1% as of December 2020.
Goldman Sachs 2021 Form 10-K 159

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Management’s estimate of credit losses entails judgment
about loan collectability at the reporting dates, and there
are uncertainties inherent in those judgments. The
allowance for credit losses is subject to a governanceprocess that involves review and approval by senior
management within the firm’s independent risk oversightand control functions. Personnel within the firm’s
independent risk oversight and control functions are
responsible for forecasting the economic variables that
underlie the economic scenarios that are used in themodeling of expected credit losses. While management uses
the best information available to determine this estimate,
future adjustments to the allowance may be necessary based
on, among other things, changes in the economic
environment or variances between actual results and theoriginal assumptions used.
The table below presents gross loans and lending
commitments accounted for at amortized cost by portfolio.
As of December
2021$ in millions

2020

Lending
Loans Commitments

Wholesale
Corporate$ 50,960
Wealth management
38,062
Commercial real estate 21,150
Residential real estate
15,493
Other
5,958
Consumer
Installment
3,672
Credit cards
8,212
Total
$143,507

Lending
Loans Commitments$143,296 $ 44,778
4,091
25,151
4,306
17,096
3,317
5,236
6,169
3,211

$127,756
2,314
4,154
1,804
4,841

9
3,823
35,932
4,270$197,120 $103,565

4
21,640$162,513

In the table above:‰ Wholesale loans included $2.43 billion as ofDecember 2021 and $3.51 billion as of December 2020 of
nonaccrual loans for which the allowance for credit losses
was measured on an asset-specific basis. The allowancefor credit losses on these loans was $543 million as ofDecember 2021 and $649 million as of December 2020.
These loans included $140 million as of December 2021
and $584 million as of December 2020 of loans which did
not require a reserve as the loan was deemed to be
recoverable.
‰ Credit card lending commitments included $33.97 billion
as of December 2021 and $21.64 billion as ofDecember 2020 related to credit card lines issued by thefirm to consumers. These credit card lines are cancellable
by the firm. Credit card lending commitments also
included approximately $2.0 billion as of December 2021
related to a commitment to acquire the General Motors
co-branded credit card portfolio.
See Note 18 for further information about lending
commitments.
160 Goldman Sachs 2021 Form 10-K

The following is a description of the methodology used to
calculate the allowance for credit losses:
Wholesale. The allowance for credit losses for wholesaleloans and lending commitments that exhibit similar risk
characteristics is measured using a modeled approach.
These models determine the probability of default and loss
given default based on various risk factors, includinginternal credit ratings, industry default and loss data,
expected life, macroeconomic indicators, the borrower’s
capacity to meet its financial obligations, the borrower’s
country of risk and industry, loan seniority and collateral
type. For lending commitments, the methodology also
considers probability of drawdowns or funding. In
addition, for loans backed by real estate, risk factors
include the loan-to-value ratio, debt service ratio and homeprice index. The most significant inputs to the forecast
model for wholesale loans and lending commitments
include unemployment rates, GDP, credit spreads,
commercial and industrial delinquency rates, short- andlong-term interest rates, and oil prices.
The allowance for loan losses for wholesale loans that do
not share similar risk characteristics, such as nonaccrualloans or loans in a TDR, is calculated using the present
value of expected future cash flows discounted at the loan’s
original effective rate, the observable market price of theloan or the fair value of the collateral.
Wholesale loans are charged off against the allowance forloan losses when deemed to be uncollectible.
Consumer. The allowance for credit losses for consumer
loans that exhibit similar risk characteristics is calculatedusing a modeled approach which classifies consumer loans
into pools based on borrower-related and exposure-relatedcharacteristics that differentiate a pool’s risk characteristics
from other pools. The factors considered in determining apool are generally consistent with the risk characteristics
used for internal credit risk measurement and management
and include key metrics, such as FICO credit scores,
delinquency status, loan vintage and macroeconomic
indicators. The most significant inputs to the forecast
model for consumer loans include unemployment rates anddelinquency rates. The expected life of revolving credit cardloans is determined by modeling expected future draws andthe timing and amount of repayments allocated to thefunded balance. The firm also recognizes an allowance for
credit losses on commitments to acquire loans. However,no allowance for credit losses is recognized on credit card
lending commitments as they are cancellable by the firm.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The allowance for credit losses for consumer loans that do
not share similar risk characteristics, such as loans in a
TDR, is calculated using the present value of expected
future cash flows discounted at the loan’s original effective
rate.
Installment loans are charged off when they are 120 days
past due. Credit card loans are charged off when they are
180 days past due.
Allowance for Credit Losses Rollforward
The table below presents information about the allowancefor credit losses.
$ in millions

Year Ended December 2021
Allowance for loan losses
Beginning balance
Net charge-offs
Provision
Other
Ending balance

Wholesale

Consumer

Total$2,584
(130)
(231)
(88)
$2,135$1,290(203)
351–$1,438$3,874
(333)
120
(88)
$3,573

12.1%
2.3%

2.5%
0.3%

Allowance ratio
1.6%
Net charge-off ratio
0.1%
Allowance for losses on lending commitments
Beginning balance$ 557
Provision
50
Other
(18)
Ending balance$ 589
Year Ended December 2020
Allowance for loan losses
Beginning balance
Net charge-offs
Provision
Other
Ending balance$1,331
(615)
2,108
(240)
$2,584

Allowance ratio
2.7%
Net charge-off ratio
0.6%
Allowance for losses on lending commitments
Beginning balance$ 313
Provision
244
Ending balance
$ 557

$

–
187
–
$ 187

$ 557
237
(18)
$ 776

$ 837
(292)
745
–
$1,290$2,168
(907)
2,853
(240)
$3,874

15.9%
4.2%

3.7%
0.9%

$

$ 313
244
$ 557

$

–
–
–

In the table above:‰ Other primarily represents the reduction to the allowance
related to loans and lending commitments transferred toheld for sale.
‰ The allowance ratio is calculated by dividing theallowance for loan losses by gross loans accounted for atamortized cost.
‰ The net charge-off ratio is calculated by dividing net
charge-offs by average gross loans accounted for atamortized cost.

‰ The beginning balance for the allowance for loan losses
and allowance for losses on lending commitments for 2020reflects the cumulative effect of measuring the allowance
under the CECL standard as of January 1, 2020. The
cumulative effect was an increase in the allowance for
credit losses of $679 million, which consisted of (i) an
increase in the allowance for loan losses of $727 million(an increase in the allowance for wholesale loans of$452 million, an increase in the allowance for consumer
loans of $444 million and a decrease in the allowance for
PCI loans of $169 million) and (ii) a decrease in theallowance for lending commitments of $48 million.
Allowance for Credit Losses Commentary
Year Ended December 2021. The allowance for credit
losses decreased by $82 million during 2021.
The provision for credit losses reflected growth in the firm’s
lending portfolios, primarily in the consumer portfolio
related to credit cards, including a provision for credit
losses of approximately $185 million relating to thecommitment to acquire the General Motors co-brandedcredit card portfolio, largely offset by reserve reduction
driven by improved broader economic environment.
Net charge-offs for 2021 for wholesale loans wereprimarily related to corporate loans and net charge-offs for
consumer loans were primarily related to credit cards.
Forecast model inputs as of December 2021. Whenmodeling expected credit losses, the firm employs aweighted, multi-scenario forecast, which includes baseline,
adverse and favorable economic scenarios. As of
December 2021, this multi-scenario forecast was primarily
weighted towards the baseline economic scenario.
The table below presents the forecasted U.S. unemployment
and U.S. GDP growth rates used in the baseline economic
scenario of the forecast model.
As of December 2021

U.S. unemployment rate
Forecast for the quarter ended:
June 2022
December 2022
June 2023

3.7%
3.5%
3.4%

Growth in U.S. GDP
Forecast for the year:
2022
2023
2024

3.4%
2.1%
1.8%

In addition, in the adverse economic scenario in the firm’s
forecast model, the U.S. unemployment rate peaks at
approximately 9.5% during the first quarter of 2023 andthe maximum decline in the quarterly U.S. GDP relative tothe fourth quarter of 2021 is approximately 2.5%, which
occurs during the first quarter of 2023.

Goldman Sachs 2021 Form 10-K 161

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above:‰ U.S. unemployment rate represents the rate forecasted asof the respective quarter-end.
‰ Growth in U.S. GDP represents the year-over-year
growth rate forecasted for the respective years.
‰ While the U.S. unemployment and U.S. GDP growth rates
are significant inputs to the forecast model, the model
contemplates a variety of other inputs across a range of
scenarios to provide a forecast of future economic
conditions. Given the complex nature of the forecastingprocess, no single economic variable can be viewed inisolation and independently of other inputs.
Year Ended December 2020. The allowance for credit
losses increased by $2.63 billion during 2020 reflecting$679 million relating to the impact of CECL adoption and$1.95 billion from activity during the period.
The provision for credit losses for wholesale and consumer
loans reflected the impact of the coronavirus (COVID-19)
pandemic on economic conditions, which resulted in higher
modeled expected losses and lower recoveries. In addition,
the provision for credit losses for wholesale loans was
impacted by asset-specific provisions and ratings
downgrades primarily related to borrowers in thediversified
industrials,
technology,
media&
telecommunications and natural resources industries.
Besides the weaker economic outlook related to the
COVID-19 pandemic, the provision for credit losses for
consumer loans for 2020 was also impacted by the growthof the credit card portfolio.
Net charge-offs for 2020 for wholesale loans wereprimarily related to corporate loans and net charge-offs for
consumer loans were primarily related to installment loans.

Fair Value of Loans by Level
The table below presents loans held for investment
accounted for at fair value under the fair value option bylevel within the fair value hierarchy.
$ in millions

Level 1

Level 2

Level 3Total

As of December 2021
Loan Type
Corporate
Wealth management
Commercial real estate
Residential real estate
Other
Total

$ –
–
–
–
–
$ –

$ 1,655
5,873
605
115
167
$ 8,415

$ 837
63
983
205
266
$2,354$ 2,492
5,936
1,588
320
433
$10,769

As of December 2020
Loan Type
Corporate
Wealth management
Commercial real estate
Residential real estate
Other
Total

$ –
–
–
–
–
$ –

$ 1,822
7,809
857
234
225
$10,947

$ 929
63
1,104
260
322
$2,678$ 2,751
7,872
1,961
494
547
$13,625

The gains as a result of changes in the fair value of loans
held for investment for which the fair value option waselected were $216 million for 2021 and $151 million for2020. These gains were included in other principaltransactions.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value of loans.
Significant Unobservable Inputs
The table below presents the amount of level 3 loans, andranges and weighted averages of significant unobservable
inputs used to value such loans.
As of December 2021
$ in millions

Amount or Weighted
Range Average

Corporate
Level 3 assets
$837
Yield
1.5% to 55.6%
Recovery rate 15.0% to 92.0%
Duration (years)
0.9 to 6.8
Commercial real estate
Level 3 assets
$983
Yield
3.2% to 18.7%
Recovery rate 4.1% to 99.5%
Duration (years)
0.4 to 4.0
Residential real estate
Level 3 assets
$205
Yield
2.1% to 20.0%
Duration (years)
0.1 to 2.4
Wealth management and other
Level 3 assets
$329
Yield
3.6% to 18.7%
Duration (years)
2.9 to 5.5

162 Goldman Sachs 2021 Form 10-K

As of December 2020
Amount or Weighted
Range Average$929
14.9% 1.1% to 45.2%
40.8% 15.0% to 58.0%
2.7
1.5 to 5.3

12.4%
31.0%
3.4

12.6%
41.4%
1.7

$1,104
4.5% to 19.3%
3.0% to 99.8%
0.3 to 4.8

11.0%
66.5%
2.6

16.1%
1.0

$260
2.0% to 14.0%
0.6 to 2.6

12.1%
1.7

7.1%
3.6

$385
2.8% to 18.7%
0.9 to 5.5

8.0%
4.1

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above:‰ Ranges represent the significant unobservable inputs thatwere used in the valuation of each type of loan.
‰ Weighted averages are calculated by weighting each input
by the relative fair value of the loan.
‰ The ranges and weighted averages of these inputs are notrepresentative of the appropriate inputs to use whencalculating the fair value of any one loan. For example,
the highest yield for residential real estate loans isappropriate for valuing a specific residential real estateloan but may not be appropriate for valuing any otherresidential real estate loan. Accordingly, the ranges of
inputs do not represent uncertainty in, or possible rangesof, fair value measurements of level 3 loans.
‰ Increases in yield or duration used in the valuation oflevel 3 loans would have resulted in a lower fair value
measurement, while increases in recovery rate would haveresulted in a higher fair value measurement as of both
December 2021 and December 2020. Due to the
distinctive nature of each level 3 loan, theinterrelationship of inputs is not necessarily uniform
within each product type.
‰ Loans are valued using discounted cash flows.
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 loans.
Year Ended December$ in millions

Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

2021

2020

$2,678
99
(33)
272
(54)
(668)
369
(309)
$2,354$1,890
72
87
670
(50)
(727)
836
(100)
$2,678In the table above:‰ Changes in fair value are presented for loans that areclassified in level 3 as of the end of the period.
‰ Net unrealized gains/(losses) relates to loans that werestill held at period-end.
‰ Purchases includes originations and secondary purchases.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a loan was transferred to level 3 during areporting period, its entire gain or loss for the period isclassified in level 3.

The table below presents information, by loan type, forloans included in the summary table above.
Year Ended December$ in millions

2021

2020

Corporate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 929
31
(34)
143
(15)
(251)
127
(93)
$ 837

$ 752
22
(22)
277
(38)
(125)
163
(100)
$ 929

Commercial real estate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance$1,104
45
(21)
20
(6)
(292)
185
(52)
$ 983

$ 591
24
60
334
(5)
(366)
466
–
$1,104

Residential real estate
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 260
12
(41)
58
(4)
(61)
57
(76)
$ 205

$ 221
13
10
48
(2)
(78)
48
–
$ 260

Wealth management and other
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
Purchases
Sales
Settlements
Transfers into level 3
Transfers out of level 3
Ending balance

$ 385
11
63
51
(29)
(64)
–
(88)
$ 329

$ 326
13
39
11
(5)
(158)
159
–
$ 385

Level 3 Rollforward Commentary
Year Ended December 2021. The net realized andunrealized gains on level 3 loans of $66 million (reflecting$99 million of net realized gains and $33 million of net
unrealized losses) for 2021 included gains of $42 million
reported in other principal transactions and $24 million
reported in interest income.
The drivers of the net unrealized losses on level 3 loans for2021 were not material.
Transfers into level 3 loans during 2021 primarily reflectedtransfers of certain loans backed by commercial real estatefrom level 2 (principally due to certain unobservable yieldand duration inputs becoming significant to the valuationof these instruments) and transfers of certain corporateloans from level 2 (principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Goldman Sachs 2021 Form 10-K 163

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Transfers out of level 3 loans during 2021 primarilyreflected transfers of certain corporate loans and wealthmanagement and other loans to level 2 (in each case,principally due to increased price transparency as a result ofmarket evidence, including market transactions in these
instruments).
Year Ended December 2020. The net realized andunrealized gains on level 3 loans of $159 million (reflecting$72 million of net realized gains and $87 million of net
unrealized gains) for 2020 included gains of $135 million
reported in other principal transactions and $24 million
reported in interest income.
The drivers of the net unrealized gains on level 3 loans for2020 were not material.
Transfers into level 3 loans during 2020 reflected transfersof certain loans backed by commercial real estate,
corporate loans, and wealth management and other loans
from level 2 (in each case, principally due to reduced pricetransparency as a result of a lack of market evidence,
including fewer market transactions in these instruments).
Transfers out of level 3 loans during 2020 reflectedtransfers of certain corporate loans to level 2 (principally
due to duration and yield inputs no longer being significant
to the valuation of these loans and increased pricetransparency as a result of increased market evidence,
including market transactions in these instruments).
Estimated Fair Value
The table below presents the estimated fair value of loansthat are not accounted for at fair value and in what level ofthe fair value hierarchy they would have been classified ifthey had been included in the firm’s fair value hierarchy.

$ in millions

Carrying
Value

Estimated Fair Value

Note 10.

Fair Value Option
Other Financial Assets and Liabilities at Fair Value
In addition to trading assets and liabilities, and certain
investments and loans, the firm accounts for certain of its
other financial assets and liabilities at fair value,
substantially all under the fair value option. The primaryreasons for electing the fair value option are to:‰ Reflect economic events in earnings on a timely basis;‰ Mitigate volatility in earnings from using different
measurement attributes (e.g., transfers of financial assets
accounted for as financings are recorded at fair value,
whereas the related secured financing would be recordedon an accrual basis absent electing the fair value option);and‰ Address simplification and cost-benefit considerations(e.g., accounting for hybrid financial instruments at fairvalue in their entirety versus bifurcation of embedded
derivatives and hedge accounting for debt hosts).
Hybrid financial instruments are instruments that containbifurcatable embedded derivatives and do not require
settlement by physical delivery of nonfinancial assets (e.g.,physical commodities). If the firm elects to bifurcate theembedded derivative from the associated debt, thederivative is accounted for at fair value and the hostcontract is accounted for at amortized cost, adjusted for theeffective portion of any fair value hedges. If the firm does
not elect to bifurcate, the entire hybrid financial instrument
is accounted for at fair value under the fair value option.
Other financial assets and liabilities accounted for at fairvalue under the fair value option include:‰ Resale and repurchase agreements;

Level 2

Level 3Total

As of December 2021
Amortized cost
Held for sale$139,934 $87,676$ 7,859 $ 5,970$54,127$ 1,917$141,803$ 7,887

As of December 2020
Amortized cost
Held for sale

‰ Certain customer and other receivables and certain otherliabilities;$ 99,691 $52,793$ 2,799 $ 1,541$48,512$ 1,271$101,305$ 2,812‰ Certain time deposits (deposits with no stated maturity
are not eligible for a fair value option election), including
structured certificates of deposit, which are hybrid
financial instruments;‰ Certain securities borrowed and loaned transactions;‰ Substantially all other secured financings, includingtransfers of assets accounted for as financings; and‰ Certain unsecured short- and long-term borrowings,
substantially all of which are hybrid financial
instruments.

164 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Fair Value of Other Financial Assets and Liabilities
by Level
The table below presents, by level within the fair value
hierarchy, other financial assets and liabilities at fair value,
substantially all of which are accounted for at fair value
under the fair value option.
$ in millions

As of December 2021
AssetsResale agreements
Securities borrowed
Customer and other receivables
Total
Liabilities
Deposits
Repurchase agreements
Securities loaned
Other secured financings
Unsecured borrowings:
Short-termLong-term
Other liabilities
Total
As of December 2020
AssetsResale agreements
Securities borrowed
Customer and other receivables
Total
Liabilities
Deposits
Repurchase agreements
Securities loaned
Other secured financings
Unsecured borrowings:
Short-termLong-term
Other liabilities
Total

Level 1

Level 2

$ – $ 205,703–
39,955–42$ – $ 245,700$$

Level 3

Total

–
–
–
–

$ 205,703
39,95542$ 245,700$ – $ (31,812) $ (3,613) $ (35,425)– (165,883)–(165,883)–(9,170)–(9,170)–(14,508)(2,566)(17,074)–(22,003)(7,829)(29,832)–(42,977)(9,413)(52,390)
–
(213)
(146)
(359)
$ – $(286,566) $(23,567) $(310,133)$ – $ 108,060–
28,898–82$ – $ 137,040

$

$

–
–
–
–

$ 108,060
28,89882$ 137,040$ – $ (11,955) $ (4,221) $ (16,176)–(126,569)(2) (126,571)–(1,053)–(1,053)–(20,652)(3,474)(24,126)–(19,227)(7,523)(26,750)–(28,335) (12,576)(40,911)
–
(1)
(262)
(263)
$ – $(207,792) $(28,058) $(235,850)

In the table above, other financial assets are shown as
positive amounts and other financial liabilities are shown as
negative amounts.
See Note 4 for an overview of the firm’s fair value
measurement policies and the valuation techniques andsignificant inputs used to determine the fair value of otherfinancial assets and liabilities.

Significant Unobservable Inputs
See below for information about the significant
unobservable inputs used to value level 3 other financial
assets and liabilities at fair value as of both December 2021
and December 2020.
Other Secured Financings. The ranges and weighted
averages of significant unobservable inputs used to valuelevel 3 other secured financings are presented below. These
ranges and weighted averages exclude unobservable inputs
that are only relevant to a single instrument, and therefore
are not meaningful.
As of December 2021:‰ Yield: 1.3% to 6.4% (weighted average: 2.1%)‰ Duration: 0.6 to 7.1 years (weighted average: 3.7 years)
As of December 2020:‰ Yield: 1.4% to 7.1% (weighted average: 2.7%)‰ Duration: 1.4 to 8.0 years (weighted average: 4.0 years)
Generally, increases in yield or duration, in isolation, would
have resulted in a lower fair value measurement as ofperiod-end. Due to the distinctive nature of each of level 3other secured financings, the interrelationship of inputs is
not necessarily uniform across such financings. See Note 11
for further information about other secured financings.
Deposits, Unsecured Borrowings and Other
Liabilities. Substantially all of the firm’s deposits,
unsecured short- and long-term borrowings, and otherliabilities that are classified in level 3 are hybrid financial
instruments. As the significant unobservable inputs used tovalue hybrid financial instruments primarily relate to theembedded derivative component of these deposits,
unsecured borrowings and other liabilities, theseunobservable inputs are incorporated in the firm’s
derivative disclosures in Note 7. See Note 13 for further
information about deposits, Note 14 for further
information about unsecured borrowings and Note 15 forfurther information about other liabilities.
Repurchase Agreements. As of December 2021, the firm
had no level 3 repurchase agreements. As of
December 2020, the firm’s level 3 repurchase agreements
were not material.

Goldman Sachs 2021 Form 10-K 165

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Level 3 Rollforward
The table below presents a summary of the changes in fairvalue for level 3 other financial liabilities accounted for atfair value.

The table below presents information, by the consolidatedbalance sheet line items, for liabilities included in thesummary table above.
Year Ended December

Year Ended December$ in millions

Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance

2021

2020

$(28,058)(401)
825(12,632)
14,930(736)
2,505$(23,567)$(21,036)(317)(1,301)(18,123)
15,373(3,575)921$(28,058)

In the table above:‰ Changes in fair value are presented for all other financial
liabilities that are classified in level 3 as of the end of theperiod.
‰ Net unrealized gains/(losses) relates to other financial
liabilities that were still held at period-end.
‰ Transfers between levels of the fair value hierarchy arereported at the beginning of the reporting period in which
they occur. If a financial liability was transferred to level 3
during a reporting period, its entire gain or loss for theperiod is classified in level 3.
‰ For level 3 other financial liabilities, increases are shownas negative amounts, while decreases are shown as
positive amounts.
‰ Level 3 other financial liabilities are frequently
economically hedged with trading assets and liabilities.
Accordingly, gains or losses that are classified in level 3
can be partially offset by gains or losses attributable tolevel 1, 2 or 3 trading assets and liabilities. As a result,gains or losses included in the level 3 rollforward below
do not necessarily represent the overall impact on thefirm’s results of operations, liquidity or capital resources.

$ in millions

2021

2020

$ (4,221)
(28)
(110)
(473)
1,203
(70)
86
$ (3,613)$ (4,023)
1(319)(4,049)
4,168
(57)
58
$ (4,221)

$

(2)
1
1
–

$

Other secured financings
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance$ (3,474)
(27)
63
(145)
779
(135)
373
$ (2,566)$

Unsecured short-term borrowings
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance$ (7,523)(134)
374(7,878)
7,188
(163)
307
$ (7,829)$ (5,707)
(132)
(215)
(6,634)
5,029
(629)
765
$ (7,523)

Unsecured long-term borrowings
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance$(12,576)(212)
381(4,136)
5,759
(368)
1,739
$ (9,413)$(10,741)
(229)
(510)
(6,215)
5,778
(757)
98
$(12,576)$$

Deposits
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesSettlements
Transfers into level 3
Transfers out of level 3
Ending balance
Repurchase agreements
Beginning balance
Net unrealized gains/(losses)
Settlements
Ending balance

Other liabilities
Beginning balance
Net realized gains/(losses)
Net unrealized gains/(losses)
IssuancesEnding balance

$

$

(262)
–
116
–
(146)

$

(30)
(2)
30
(2)

(386)
13
(142)
(1,195)368(2,132)–$ (3,474)

$

(149)
30
(113)
(30)
(262)

Level 3 Rollforward Commentary
Year Ended December 2021. The net realized andunrealized gains on level 3 other financial liabilities of$424 million (reflecting $401 million of net realized losses
and $825 million of net unrealized gains) for 2021 included
gains/(losses) of $355 million reported in market making,$32 million reported in other principal transactions and$(20) million reported in interest expense in the
consolidated statements of earnings, and $57 million
reported in debt valuation adjustment in the consolidated
statements of comprehensive income.
166 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The net unrealized gains on level 3 other financial liabilities
for 2021 primarily reflected gains on certain hybrid
financial instruments included in unsecured long- andshort-term borrowings (principally due to an increase ininterest rates).
Transfers into level 3 other financial liabilities during 2021
primarily reflected transfers of certain hybrid financial
instruments included in unsecured long- and short-termborrowings from level 2 (principally due to reduced pricetransparency of certain volatility and correlation inputs
used to value these instruments) and certain other secured
financings from level 2 (principally due to reduced pricetransparency of certain yield and duration inputs used tovalue these instruments).
Transfers out of level 3 other financial liabilities during2021 primarily reflected transfers of certain hybrid
financial instruments included in unsecured long- andshort-term borrowings to level 2 (principally due toincreased price transparency of certain volatility andcorrelation inputs used to value these instruments, andcertain unobservable volatility inputs no longer being
significant to the valuation of these instruments) andcertain other secured financings to level 2 (principally due
to increased price transparency of certain yield andduration inputs used to value these instruments).
Year Ended December 2020. The net realized andunrealized losses on level 3 other financial liabilities of$1.62 billion (reflecting $317 million of net realized losses
and $1.30 billion of net unrealized losses) for 2020
included losses of $1.44 billion reported in market making,$28 million reported in other principal transactions and$15 million reported in interest expense in the consolidated
statements of earnings, and $139 million reported in debt
valuation adjustment in the consolidated statements ofcomprehensive income.
The net unrealized losses on level 3 other financial liabilities
for 2020 primarily reflected losses on certain hybrid
financial instruments included in unsecured long- andshort-term borrowings (principally due to an increase inglobal equity prices), and losses on certain hybrid financial
instruments included in deposits (principally due to anincrease in the market value of the underlying assets).
Transfers into level 3 other financial liabilities during 2020
primarily reflected transfers of certain other secured
financings from level 2 (principally due to reduced pricetransparency of certain yield and duration inputs used tovalue these instruments), and certain hybrid financial
instruments included in unsecured long- and short-termborrowings from level 2 (principally due to reduced pricetransparency of certain volatility and correlation inputs
used to value these instruments).

Transfers out of level 3 other financial liabilities during2020 primarily reflected transfers of certain hybrid
financial instruments included in unsecured short-termborrowings to level 2 (principally due to increased pricetransparency of certain volatility and correlation inputs
used to value these instruments).
Gains and Losses on Other Financial Assets andLiabilities Accounted for at Fair Value Under the
Fair Value Option
The table below presents the gains and losses recognized inearnings as a result of the election to apply the fair value
option to certain financial assets and liabilities.
Year Ended December$ in millions

2021

Unsecured short-term borrowings
Unsecured long-term borrowings
Other
Total

$(1,016)(2,393)(135)$(3,544)

2020

2019

206
(2,804)(563)$(3,161)$(3,365)(5,251)(883)$(9,499)$

In the table above:‰ Gains/(losses) were substantially all included in market
making.
‰ Gains/(losses) exclude contractual interest, which isincluded in interest income and interest expense, for all
instruments other than hybrid financial instruments. See
Note 23 for further information about interest income
and interest expense.
‰ Gains/(losses) included in unsecured short- and long-termborrowings were substantially all related to the embedded
derivative component of hybrid financial instruments for
2021, 2020 and 2019. These gains and losses would havebeen recognized under other U.S. GAAP even if the firm
had not elected to account for the entire hybrid financial
instrument at fair value.
‰ Other primarily consists of gains/(losses) on customer andother receivables, deposits, other secured financings andother liabilities.
‰ Other financial assets and liabilities at fair value are
frequently economically hedged with trading assets andliabilities. Accordingly, gains or losses on such otherfinancial assets and liabilities can be partially offset bygains or losses on trading assets and liabilities. As a result,gains or losses on other financial assets and liabilities do
not necessarily represent the overall impact on the firm’s
results of operations, liquidity or capital resources.

Goldman Sachs 2021 Form 10-K 167

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
See Note 8 for information about gains/(losses) on equity
securities and Note 9 for information about gains/(losses)
on loans which are accounted for at fair value under the fairvalue option. Gains/(losses) on trading assets and liabilities
accounted for at fair value under the fair value option are
included in market making. See Note 5 for further
information about gains/(losses) from market making.

Loans and Lending Commitments
The table below presents the difference between theaggregate fair value and the aggregate contractual principal
amount for loans (included in trading assets and loans in
the consolidated balance sheets) for which the fair value
option was elected.

Long-Term Debt Instruments
The difference between the aggregate contractual principal
amount and the related fair value of long-term othersecured financings, for which the fair value option waselected, was not material as of both December 2021 andDecember 2020.

As of December

The difference between the aggregate contractual principal
amount and the related fair value of unsecured long-termborrowings, for which the fair value option was elected,
was not material as of December 2021, and the fair value
exceeded the aggregate contractual principal amount by$445 million as of December 2020. The amount above
includes both principal-protected and non-principalprotected long-term borrowings.
Debt Valuation Adjustment
The firm calculates the fair value of financial liabilities forwhich the fair value option is elected by discounting future
cash flows at a rate which incorporates the firm’s credit
spreads.
The table below presents information about the net debt
valuation adjustment (DVA) gains/(losses) on financial
liabilities for which the fair value option was elected.
Year Ended December$ in millions

2021

2020

2019

Pre-tax DVA
After tax DVA

$433
$322

$(347)$(261)$(2,763)$(2,079)

In the table above:‰ After tax DVA is included in debt valuation adjustment in
the consolidated statements of comprehensive income.
‰ The gains/(losses) reclassified to market making in the
consolidated statements of earnings from accumulated
other comprehensive income/(loss) upon extinguishmentof such financial liabilities were not material for 2021,
2020 and 2019.

168 Goldman Sachs 2021 Form 10-K

$ in millions

Performing loans
Aggregate contractual principal in excess of fair value

2021$1,373

2020

$

958

Loans on nonaccrual status and/or more than 90 days past due
Aggregate contractual principal in excess of fair value$8,600 $10,526
Aggregate fair value$3,559 $ 3,519

In the table above, the aggregate contractual principal
amount of loans on nonaccrual status and/or more than
90 days past due (which excludes loans carried at zero fairvalue and considered uncollectible) exceeds the related fairvalue primarily because the firm regularly purchases loans,such as distressed loans, at values significantly below thecontractual principal amounts.
The fair value of unfunded lending commitments for which
the fair value option was elected was a liability of$20 million as of December 2021 and $25 million as ofDecember 2020, and the related total contractual amountof these lending commitments was $611 million as ofDecember 2021 and $1.64 billion as of December 2020. See
Note 18 for further information about lending
commitments.
Impact of Credit Spreads on Loans and Lending
Commitments
The estimated net gain/(loss) attributable to changes in
instrument-specific credit spreads on loans and lending
commitments for which the fair value option was elected
was $277 million for 2021, $(106) million for 2020 and$134 million for 2019. The firm generally calculates the fairvalue of loans and lending commitments for which the fairvalue option is elected by discounting future cash flows at a
rate which incorporates the instrument-specific credit
spreads. For floating-rate loans and lending commitments,
substantially all changes in fair value are attributable tochanges in instrument-specific credit spreads, whereas for
fixed-rate loans and lending commitments, changes in fairvalue are also attributable to changes in interest rates.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 11.

Collateralized Agreements and Financings
Collateralized agreements are resale agreements andsecurities borrowed. Collateralized financings are
repurchase agreements, securities loaned and other secured
financings. The firm enters into these transactions in order
to, among other things, facilitate client activities, invest
excess cash, acquire securities to cover short positions andfinance certain firm activities.
Collateralized agreements and financings are presented on a
net-by-counterparty basis when a legal right of setoff exists.
Interest on collateralized agreements, which is included ininterest income, and collateralized financings, which isincluded in interest expense, is recognized over the life of
the transaction. See Note 23 for further information about
interest income and interest expense.
Resale and Repurchase Agreements
A resale agreement is a transaction in which the firmpurchases financial instruments from a seller, typically in
exchange for cash, and simultaneously enters into anagreement to resell the same or substantially the samefinancial instruments to the seller at a stated price plus
accrued interest at a future date.
A repurchase agreement is a transaction in which the firm
sells financial instruments to a buyer, typically in exchange
for cash, and simultaneously enters into an agreement torepurchase the same or substantially the same financial
instruments from the buyer at a stated price plus accrued
interest at a future date.
Even though repurchase and resale agreements (including“repos- and reverses-to-maturity”) involve the legaltransfer of ownership of financial instruments, they areaccounted for as financing arrangements because theyrequire the financial instruments to be repurchased or
resold before or at the maturity of the agreement. The
financial instruments purchased or sold in resale andrepurchase agreements typically include U.S. government
and agency, and investment-grade sovereign obligations.
The firm receives financial instruments purchased underresale agreements and makes delivery of financial
instruments sold under repurchase agreements. To mitigate
credit exposure, the firm monitors the market value of thesefinancial instruments on a daily basis, and delivers or
obtains additional collateral due to changes in the market
value of the financial instruments, as appropriate. For
resale agreements, the firm typically requires collateral witha fair value approximately equal to the carrying value of therelevant assets in the consolidated balance sheets.

Securities Borrowed and Loaned Transactions
In a securities borrowed transaction, the firm borrows
securities from a counterparty in exchange for cash or
securities. When the firm returns the securities, thecounterparty returns the cash or securities. Interest is
generally paid periodically over the life of the transaction.
In a securities loaned transaction, the firm lends securities
to a counterparty in exchange for cash or securities. Whenthe counterparty returns the securities, the firm returns the
cash or securities posted as collateral. Interest is generally
paid periodically over the life of the transaction.
The firm receives securities borrowed and makes delivery of
securities loaned. To mitigate credit exposure, the firm
monitors the market value of these securities on a daily
basis, and delivers or obtains additional collateral due tochanges in the market value of the securities, as
appropriate. For securities borrowed transactions, the firm
typically requires collateral with a fair value approximately
equal to the carrying value of the securities borrowed
transaction.
Securities borrowed and loaned within Fixed Income,Currency and Commodities (FICC) financing are recorded
at fair value under the fair value option. See Note 10 for
further information about securities borrowed and loaned
accounted for at fair value.
Substantially all of securities borrowed and loaned within
Equities financing are recorded based on the amount ofcash collateral advanced or received plus accrued interest.
The firm also reviews such securities borrowed todetermine if an allowance for credit losses should berecorded by taking into consideration the fair value ofcollateral received. As these agreements generally can beterminated on demand, they exhibit little, if any, sensitivity
to changes in interest rates. Therefore, the carrying value ofsuch agreements approximates fair value. As these
agreements are not accounted for at fair value, they are notincluded in the firm’s fair value hierarchy in Notes 4
through 10. Had these agreements been included in thefirm’s fair value hierarchy, they would have been classified
in level 2 as of both December 2021 and December 2020.

Goldman Sachs 2021 Form 10-K 169

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Offsetting Arrangements
The table below presents resale and repurchase agreements
and securities borrowed and loaned transactions includedin the consolidated balance sheets, as well as the amounts
not offset in the consolidated balance sheets.
Assets$ in millions

Resaleagreements

Securities
borrowed

Gross Carrying Value of Repurchase Agreements
and Securities Loaned
The table below presents the gross carrying value of
repurchase agreements and securities loaned by class ofcollateral pledged.

Liabilities
Repurchaseagreements

Securities
loanedAs of December 2021
Included in the consolidated balance sheets
Gross carrying value$ 334,725 $ 190,197 $ 294,905 $ 57,931
Counterparty netting(129,022)(11,426) (129,022) (11,426)
Total
205,703178,771
165,883
46,505
Amounts not offset
Counterparty netting(27,376)(12,822)(27,376) (12,822)
Collateral(173,915) (157,752) (134,465) (33,143)
Total$ 4,412 $ 8,197 $ 4,042 $540
As of December 2020
Included in the consolidated balance sheets
Gross carrying value$ 205,817 $ 147,593 $ 224,328 $ 27,054
Counterparty netting(97,757)(5,433)(97,757)(5,433)
Total
108,060
142,160
126,571
21,621
Amounts not offset
Counterparty netting(8,920)(3,525)(8,920)(3,525)Collateral(96,140) (132,893) (116,819) (17,693)
Total$ 3,000 $ 5,742 $
832 $
403

$ in millions

As of December 2021
Money market instruments
U.S. government and agency obligations
Non-U.S. government and agency obligations
Securities backed by commercial real estate
Securities backed by residential real estate
Corporate debt securities
State and municipal obligations
Other debt obligations
Equity securities
Total
As of December 2020
Money market instruments
U.S. government and agency obligations
Non-U.S. government and agency obligations
Securities backed by commercial real estate
Securities backed by residential real estate
Corporate debt securities
State and municipal obligations
Other debt obligations
Equity securities
Total

Repurchaseagreements

Securities
loaned$328
132,049
126,397
362
919
11,034248
374
23,194$ 294,905

$

14
503
1,254
–
–
510
–
–
55,650$57,931$$

88
121,751
79,159
65
121
6,364
92
20
16,668$ 224,328

–
–
1,634
–
–
46
–
–
25,374$27,054In the table above:‰ Substantially all of the gross carrying values of thesearrangements are subject to enforceable netting
agreements.
‰ Where the firm has received or posted collateral undercredit support agreements, but has not yet determinedsuch agreements are enforceable, the related collateral has
not been netted.
‰ Amounts not offset includes counterparty netting that
does not meet the criteria for netting under U.S. GAAPand the fair value of collateral received or posted subject
to enforceable credit support agreements.
‰ Resale agreements and repurchase agreements are carriedat fair value under the fair value option. See Note 4 forfurther information about the valuation techniques andsignificant inputs used to determine fair value.
‰ Securities borrowed included in the consolidated balance
sheets of $39.96 billion as of December 2021 and$28.90 billion as of December 2020, and securities loanedof $9.17 billion as of December 2021 and $1.05 billion asof December 2020 were at fair value under the fair value
option. See Note 10 for further information about
securities borrowed and securities loaned accounted forat fair value.

170 Goldman Sachs 2021 Form 10-K

The table below presents the gross carrying value of
repurchase agreements and securities loaned by maturity.
As of December 2021
$ in millions

No stated maturity and overnight2 - 30 days
31 - 90 days
91 days - 1 year
Greater than 1 year
Total

Repurchaseagreements

Securities
loaned$ 97,675
102,440
38,29741,013
15,480$294,905$35,052
153
110
15,656
6,960$57,931

In the table above:‰ Repurchase agreements and securities loaned that are
repayable prior to maturity at the option of the firm arereflected at their contractual maturity dates.
‰ Repurchase agreements and securities loaned that areredeemable prior to maturity at the option of the holder
are reflected at the earliest dates such options become
exercisable.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Other Secured Financings
In addition to repurchase agreements and securities loaned
transactions, the firm funds certain assets through the use ofother secured financings and pledges financial instruments
and other assets as collateral in these transactions. Theseother secured financings include:‰ Liabilities of consolidated VIEs;‰ Transfers of assets accounted for as financings rather thansales (e.g., pledged commodities, bank loans andmortgage whole loans); and‰ Other structured financing arrangements.
Other
securedfinancings
includednonrecourse
arrangements. Nonrecourse other secured financings were
$8.64 billion as of December 2021 and $12.31 billion as ofDecember 2020.
The firm has elected to apply the fair value option to
substantially all other secured financings because the use offair value eliminates non-economic volatility in earnings
that would arise from using different measurement
attributes. See Note 10 for further information about othersecured financings that are accounted for at fair value.
Other secured financings that are not recorded at fair value
are recorded based on the amount of cash received plus
accrued interest, which generally approximates fair value.
As these financings are not accounted for at fair value, they
are not included in the firm’s fair value hierarchy in Notes 4
through 10. Had these financings been included in thefirm’s fair value hierarchy, substantially all would havebeen classified in level 3 as of both December 2021 andDecember 2020.

The table below presents information about other secured
financings.

$ in millions

U.S.
DollarAs of December 2021
Other secured financings (short-term):
At fair value$ 5,315
At amortized cost–
Other secured financings (long-term):
At fair value
4,170
At amortized cost
827
Total other secured financings$10,312
Other secured financings collateralized by:
Financial instruments$ 5,990
Other assets$ 4,322
As of December 2020
Other secured financings (short-term):
At fair value$ 6,371
At amortized cost–
Other secured financings (long-term):
At fair value
6,632
At amortized cost
914
Total other secured financings$13,917
Other secured financings collateralized by:
Financial instruments$ 6,841
Other assets$ 7,076

Non-U.S.
DollarTotal$ 3,664
191$ 8,979
191

3,925
452
$ 8,232

8,095
1,279
$18,544$ 6,834$ 1,398$12,824$ 5,720$ 6,847–$13,218
–

4,276
715
$11,838

10,908
1,629$25,755$10,068$ 1,770$16,909$ 8,846

In the table above:‰ Short-term other secured financings includes financings
maturing within one year of the financial statement date
and financings that are redeemable within one year of thefinancial statement date at the option of the holder.
‰ Non-U.S. dollar-denominated short-term other secured
financings at amortized cost had a weighted averageinterest rate of 0.22% as of December 2021. This rate
includes the effect of hedging activities.
‰ U.S. dollar-denominated long-term other secured
financings at amortized cost had a weighted averageinterest rate of 1.06% as of December 2021 and 1.27%
as of December 2020. These rates include the effect ofhedging activities.
‰ Non-U.S. dollar-denominated long-term other secured
financings at amortized cost had a weighted averageinterest rate of 0.46% as of December 2021 and 0.40%
as of December 2020. These rates include the effect ofhedging activities.
‰ Total other secured financings included $1.97 billion asof December 2021 and $2.05 billion as ofDecember 2020 related to transfers of financial assets
accounted for as financings rather than sales. Suchfinancings were collateralized by financial assets,
primarily included in trading assets, of $2.02 billion as ofDecember 2021 and $2.26 billion as of December 2020.
Goldman Sachs 2021 Form 10-K 171

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Other secured financings collateralized by financial
instruments included $10.37 billion as of December 2021
and $11.28 billion as of December 2020 of other secured
financings collateralized by trading assets, investments
and loans, and included $2.45 billion as ofDecember 2021 and $5.63 billion as of December 2020 ofother secured financings collateralized by financial
instruments received as collateral and repledged.
The table below presents other secured financings bymaturity.

The firm also pledges certain trading assets in connection
with repurchase agreements, securities loaned transactions
and other secured financings, and other assets (substantially
all real estate and cash) in connection with other secured
financings to counterparties who may or may not have theright to deliver or repledge them.
The table below presents financial instruments at fair value
received as collateral that were available to be delivered or
repledged and were delivered or repledged.
As of December$ in millions

Other secured financings (short-term)
Other secured financings (long-term):
2023
2024
2025
2026
2027 - thereafter
Total other secured financings (long-term)
Total other secured financings

As ofDecember 2021

$ 9,170
3,585
1,844
855
1,097
1,993
9,374
$18,544In the table above:‰ Long-term other secured financings that are repayableprior to maturity at the option of the firm are reflected attheir contractual maturity dates.
‰ Long-term other secured financings that are redeemableprior to maturity at the option of the holder are reflected
at the earliest dates such options become exercisable.
Collateral Received and Pledged
The firm receives cash and securities (e.g., U.S. government
and agency obligations, other sovereign and corporate
obligations, as well as equity securities) as collateral,
primarily in connection with resale agreements, securities
borrowed, derivative transactions and customer marginloans. The firm obtains cash and securities as collateral on
an upfront or contingent basis for derivative instruments
and collateralized agreements to reduce its credit exposure
to individual counterparties.
In many cases, the firm is permitted to deliver or repledge
financial instruments received as collateral when entering
into repurchase agreements and securities loaned
transactions, primarily in connection with secured client
financing activities. The firm is also permitted to deliver orrepledge these financial instruments in connection withother secured financings, collateralized derivativetransactions and firm or customer settlement requirements.

172 Goldman Sachs 2021 Form 10-K

$ in millions

Collateral available to be delivered or repledged
Collateral that was delivered or repledged

2021

2020

$1,057,195$ 875,213$864,494$723,409

The table below presents information about assets pledged.
As of December$ in millions

2021

2020

Pledged to counterparties that had the right to deliver or repledge
Trading assets$ 68,208$ 69,031
Investments$ 12,840$ 13,375
Pledged to counterparties that did not have the right to deliver or repledge
Trading assets$ 102,259$ 99,142
Investments$
8,683$ 2,331
Loans
$
6,808
$ 8,320
Other assets$
8,878$ 14,144

The firm also segregates securities for regulatory and otherpurposes related to client activity. Such securities aresegregated from trading assets and investments, as well asfrom securities received as collateral under resaleagreements and securities borrowed transactions. Securities
segregated by the firm were $41.49 billion as ofDecember 2021 and $32.97 billion as of December 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 12.

Other Assets
The table below presents other assets by type.
As of December$ in millions

2021

2020

Property, leasehold improvements and equipment $18,094 $23,147
Goodwill
4,285
4,332
Identifiable intangible assets
418
630
Operating lease right-of-use assets
2,292
2,280
Income tax-related assets
3,860
2,960
Miscellaneous receivables and other
5,659
4,096
Total
$34,608 $37,445

Property, Leasehold Improvements and Equipment
Property, leasehold improvements and equipment is net ofaccumulated
depreciation
andamortizationof$10.81 billion as of December 2021 and $10.12 billion asof December 2020. Property, leasehold improvements andequipment included $6.71 billion as of December 2021 and$6.54 billion as of December 2020 that the firm uses inconnection with its operations, and $194 million as ofDecember 2021 and $318 million as of December 2020 of
foreclosed real estate primarily related to distressed loansthat were purchased by the firm. The remainder is held by
investment entities, including VIEs, consolidated by thefirm. Substantially all property and equipment isdepreciated on a straight-line basis over the useful life of theasset. Leasehold improvements are amortized on a straightline basis over the shorter of the useful life of the
improvement or the term of the lease. Capitalized costs ofsoftware developed or obtained for internal use areamortized on a straight-line basis over three years.
The firm tests property, leasehold improvements andequipment for impairment when events or changes incircumstances suggest that an asset’s or asset group’s
carrying value may not be fully recoverable. To the extent
the carrying value of an asset or asset group exceeds the
projected undiscounted cash flows expected to result fromthe use and eventual disposal of the asset or asset group, thefirm determines the asset or asset group is impaired andrecords an impairment equal to the difference between theestimated fair value and the carrying value of the asset or
asset group. In addition, the firm will recognize an
impairment prior to the sale of an asset or asset group if thecarrying value of the asset or asset group exceeds its
estimated fair value.
The firm had impairments of $143 million during 2021 and$171 million during 2020, primarily related to properties
held by the firm’s investment entities. There were nomaterial impairments during 2019.

Goodwill
Goodwill is the cost of acquired companies in excess of thefair value of net assets, including identifiable intangible
assets, at the acquisition date.
The table below presents the carrying value of goodwill byreporting unit.
As of December$ in millions

Investment Banking
Global Markets:
FICC
Equities
Asset Management
Consumer & Wealth Management:
Consumer banking
Wealth management
Total

2021

2020

$ 281

$ 281

269
2,638
349

269
2,644
390

48
700
$4,28548
700$4,332

Goodwill is assessed for impairment annually in the fourth
quarter or more frequently if events occur or circumstanceschange that indicate an impairment may exist. Whenassessing goodwill for impairment, first, a qualitative
assessment can be made to determine whether it is more
likely than not that the estimated fair value of a reporting
unit is less than its estimated carrying value. If the results of
the qualitative assessment are not conclusive, a quantitative
goodwill test is performed. Alternatively, a quantitative
goodwill test can be performed without performing aqualitative assessment.
The quantitative goodwill test compares the estimated fairvalue of each reporting unit with its estimated net bookvalue (including goodwill and identifiable intangible
assets). If the reporting unit’s estimated fair value exceeds
its estimated net book value, goodwill is not impaired. An
impairment is recognized if the estimated fair value of areporting unit is less than its estimated net book value.
To estimate the fair value of each reporting unit, other thanConsumer banking, a relative value technique is usedbecause the firm believes market participants would use thistechnique to value these reporting units. The relative value
technique applies observable price-to-earnings multiples or
price-to-book multiples of comparable competitors toreporting units’ net earnings or net book value. To estimate
the fair value of Consumer banking, a discounted cash flow
valuation approach is used because the firm believes market
participants would use this technique to value thatreporting unit given its early stage of development. The
estimated net carrying value of each reporting unit reflects
an allocation of total shareholders’ equity and represents
the estimated amount of total shareholders’ equity required
to support the activities of the reporting unit undercurrently applicable regulatory capital requirements.
Goldman Sachs 2021 Form 10-K 173

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the fourth quarter of 2021, the firm performed its annual
assessment of goodwill for impairment, for each of its
reporting units, by performing a qualitative assessment.
Multiple factors were assessed with respect to each of thefirm’s reporting units to determine whether it was more
likely than not that the estimated fair value of any of thosereporting units was less than its estimated carrying value.
The qualitative assessment also considered changes since aquantitative test was last performed in 2019.
The firm considered the following factors in the qualitative
annual assessment when evaluating whether it was more
likely than not that the estimated fair value of a reporting
unit was less than its estimated carrying value:‰ Performance Indicators. During 2021, the firm’s net
revenues, diluted earnings per common share (EPS),
return on average common shareholders’ equity and bookvalue per common share all increased from 2020 andfrom when a quantitative test was last performed in 2019.
The firm’s operating expenses increased, primarilyreflecting significantly higher compensation and benefits
expenses (reflecting strong financial performance).
Despite the increase in expenses, both the efficiency ratio(total operating expenses divided by total net revenues)
and pre-tax margin improved compared with 2020.
‰ Macroeconomic Indicators. The global economy
continued to recover during 2021 from the impact of the
COVID-19 pandemic, as the lifting of health and safety
restrictions amid vaccine distribution facilitated anincrease in global economic recovery, and monetary andfiscal policy from central banks and governments
remained accommodative. However, there remains
uncertainty related to the impact and the duration of the
COVID-19 pandemic.
‰ Firm and Industry Events. There were no events, entityspecific or otherwise, that would have had a significant
negative impact on the valuation of the firm’s reporting
units.
‰ Fair Value Indicators. Since the 2020 qualitative
goodwill test, fair value indicators in the market generally
improved, as global equity prices were higher, credit
spreads were tighter, and the firm and its peers’ stock
prices and price-to-book multiples were higher. Despite
increased inflation concerns, supply chain challenges andthe rise in COVID-19 cases in the fourth quarter of 2021,
the firm’s stock price and price-to-book multiple ended
the year higher compared with the end of 2020.

174 Goldman Sachs 2021 Form 10-K

As a result of the qualitative assessment, the firm
determined that it was more likely than not that theestimated fair value of each reporting unit exceeded its
respective estimated carrying value. Therefore, the firm
determined that goodwill for each reporting unit was not
impaired and that a quantitative goodwill test was not
required.
Identifiable Intangible Assets
The table below presents identifiable intangible assets byreporting unit and type.
As of December$ in millions

By Reporting Unit
Global Markets:
FICC
Equities
Asset Management
Consumer & Wealth Management:
Consumer banking
Wealth management
Total

2021

$

$

1
43
122
–
252
418

2020

$

$

2
45
274
6
303
630

By TypeCustomer lists
Gross carrying value
Accumulated amortization
Net carrying value$ 1,460(1,130)330$ 1,478(1,089)389

Acquired leases and other
Gross carrying value
Accumulated amortization
Net carrying value

500
(412)
88

710
(469)
241

1,960
(1,542)
$ 418

2,188
(1,558)$ 630

Total gross carrying value
Total accumulated amortization
Total net carrying value

During 2021, the amount of intangible assets acquired by
the firm was not material. The firm acquired $155 millionof intangible assets during 2020, primarily related toacquired leases and customer lists, with a weighted averageamortization period of 10 years.
Substantially all of the firm’s identifiable intangible assets
have finite useful lives and are amortized over theirestimated useful lives generally using the straight-line
method.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The tables below present informationamortization of identifiable intangible assets.

about

the

Year Ended December$ in millions

2021

2020

2019

Amortization

$120

$147

$173

$ in millions

Estimated future amortization
2022
2023
2024
2025
2026

As of
December 2021

$69
$65
$53
$37
$30

The firm tests intangible assets for impairment when eventsor changes in circumstances suggest that an asset’s or asset
group’s carrying value may not be fully recoverable. To theextent the carrying value of an asset or asset group exceeds
the projected undiscounted cash flows expected to result
from the use and eventual disposal of the asset or asset
group, the firm determines the asset or asset group is
impaired and records an impairment equal to the difference
between the estimated fair value and the carrying value ofthe asset or asset group. In addition, the firm will recognize
an impairment prior to the sale of an asset or asset group if
the carrying value of the asset or asset group exceeds its
estimated fair value. There were no material impairments
during 2021, 2020 or 2019.
Operating Lease Right-of-Use Assets
The firm enters into operating leases for real estate, officeequipment and other assets, substantially all of which areused in connection with its operations. For leases longer
than one year, the firm recognizes a right-of-use asset
representing the right to use the underlying asset for thelease term, and a lease liability representing the liability tomake payments. The lease term is generally determinedbased on the contractual maturity of the lease. For leases
where the firm has the option to terminate or extend thelease, an assessment of the likelihood of exercising theoption is incorporated into the determination of the lease
term. Such assessment is initially performed at the inceptionof the lease and is updated if events occur that impact theoriginal assessment.

An operating lease right-of-use asset is initially determinedbased on the operating lease liability, adjusted for initial
direct costs, lease incentives and amounts paid at or prior tolease commencement. This amount is then amortized overthe lease term. The firm recognized $305 million for 2021,$182 million for 2020 and $963 million (primarily related
to the firm’s European headquarters in London) for 2019 ofright-of-use assets and operating lease liabilities in non-cash
transactions for leases entered into or assumed. See Note 15
for information about operating lease liabilities.
For leases where the firm will derive no economic benefit
from leased space that it has vacated or where the firm has
shortened the term of a lease when space is no longer
needed, the firm will record an impairment or accelerated
amortization of right-of-use assets. There were no material
impairments or accelerated amortizations during 2021 and2020.
Miscellaneous Receivables and Other
Miscellaneous receivables and other included:‰ Investments in qualified affordable housing projects of$714 million as of December 2021 and $678 million as ofDecember 2020.
‰ Assets classified as held for sale of $1.02 billion as ofDecember 2021 and $437 million as of December 2020
related to certain of the firm’s consolidated investments
within the Asset Management segment, substantially allof which consisted of property and equipment.
Note 13.

Deposits
The table below presents the types and sources of deposits.
Savings and
Demand

Time

Total

As of December 2021
Consumer$ 89,150
Private bank85,427
Brokered certificates of deposit–
Deposit sweep programs
37,965
Transaction banking
48,618
Other
275
Total
$261,435$ 20,533
9,665
30,816–
5,689
36,089$102,792$109,683
95,09230,81637,96554,30736,364$364,227

As of December 2020
Consumer$ 67,395
Private bank
67,185
Brokered certificates of deposit–
Deposit sweep programs
22,987
Transaction banking
28,852
Other
–
Total
$186,419$ 29,530
1,183
30,060––12,770$ 73,543$ 96,925
68,36830,06022,98728,852
12,770$259,962$ in millions

Goldman Sachs 2021 Form 10-K 175

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above:‰ Substantially all deposits are interest-bearing.
‰ Savings and demand accounts consist of money market
deposit accounts, negotiable order of withdrawal
accounts and demand deposit accounts that have nostated maturity or expiration date.
‰ Time deposits included $35.43 billion as ofDecember 2021 and $16.18 billion as of December 2020of deposits accounted for at fair value under the fair value
option. See Note 10 for further information about
deposits accounted for at fair value.
‰ Time deposits had a weighted average maturity of
approximately 0.9 years as of December 2021 and
1.3 years as of December 2020.
‰ Deposit sweep programs include long-term contractual
agreements with U.S. broker-dealers who sweep client
cash to FDIC-insured deposits. As of December 2021, thefirm had 15 such deposit sweep program agreements.
‰ Transaction banking deposits consists of deposits that thefirm raised through its cash management services businessfor corporate and other institutional clients.

As of December 2021, deposits in U.S. offices included$25.44 billion and deposits in non-U.S. offices included$32.73 billion of time deposits in denominations that met
or exceeded the applicable insurance limits, or wereotherwise not covered by insurance.
The firm’s savings and demand deposits are recorded basedon the amount of cash received plus accrued interest, whichapproximates fair value. In addition, the firm designates
certain derivatives as fair value hedges to convert a portionof its time deposits not accounted for at fair value fromfixed-rate obligations into floating-rate obligations. The
carrying value of time deposits not accounted for at fairvalue approximated fair value as of both December 2021
and December 2020. As these savings and demand deposits
and time deposits are not accounted for at fair value, they
are not included in the firm’s fair value hierarchy in Notes 4
through 10. Had these deposits been included in the firm’s
fair value hierarchy, they would have been classified inlevel 2 as of both December 2021 and December 2020.
Note 14.

Unsecured Borrowings‰ Other deposits represent deposits from institutional clients.

The table below presents information about unsecured
borrowings.

‰ Deposits insured by the FDIC were $156.66 billion as ofDecember 2021 and $123.03 billion as ofDecember 2020.

$ in millions‰ Deposits insured by non-U.S. insurance programs were$31.44 billion as of December 2021 and $27.52 billion asof December 2020.
The table below presents the location of deposits.
As of December$ in millions

U.S. offices
Non-U.S. offices
Total

2021

2020

$283,705
80,522$364,227$206,356
53,606$259,962

In the table above, U.S. deposits were held at Goldman
Sachs Bank USA (GS Bank USA) and substantially all
non-U.S. deposits were held at Goldman Sachs
International Bank (GSIB).
The table below presents maturities of time deposits held in
U.S. and non-U.S. offices.
As of December 2021
$ in millions

2022
2023
2024
2025
2026
2027 - thereafter
Total

U.S.

Non-U.S.

Total$48,842
9,616
4,747
2,342
2,335
1,445
$69,327$31,760
391
125
252
265
672
$33,465$ 80,602
10,007
4,872
2,594
2,600
2,117
$102,792

176 Goldman Sachs 2021 Form 10-K

As of December

Unsecured short-term borrowings
Unsecured long-term borrowings
Total

2021

2020

$ 46,955
254,092$301,047$ 52,870
213,481$266,351

Unsecured Short-Term Borrowings
Unsecured short-term borrowings includes the portion of
unsecured long-term borrowings maturing within one yearof the financial statement date and unsecured long-termborrowings that are redeemable within one year of thefinancial statement date at the option of the holder.
The firm accounts for certain hybrid financial instruments atfair value under the fair value option. See Note 10 for further
information about unsecured short-term borrowings that are
accounted for at fair value. In addition, the firm designates
certain derivatives as fair value hedges to convert a portion of
its unsecured short-term borrowings not accounted for at fairvalue from fixed-rate obligations into floating-rate
obligations. The carrying value of unsecured short-termborrowings that are not recorded at fair value generally
approximates fair value due to the short-term nature of theobligations. As these unsecured short-term borrowings are
not accounted for at fair value, they are not included in thefirm’s fair value hierarchy in Notes 4 through 10. Had theseborrowings been included in the firm’s fair value hierarchy,
substantially all would have been classified in level 2 as ofboth December 2021 and December 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents information about unsecured
short-term borrowings.
As of December$ in millions

2021

2020

Current portion of unsecured long-term borrowings $18,118 $25,914
Hybrid financial instruments
20,073
18,823
Commercial paper
6,730
6,085
Other unsecured short-term borrowings
2,034
2,048
Total unsecured short-term borrowings$46,955 $52,870
Weighted average interest rate

2.34%

1.84%

In the table above:‰ The current portion of unsecured long-term borrowings
included $9.16 billion as of December 2021 and$17.06 billion as of December 2020 issued by Group Inc.
‰ The weighted average interest rates for these borrowings
include the effect of hedging activities and exclude
unsecured short-term borrowings accounted for at fairvalue under the fair value option. See Note 7 for further
information about hedging activities.
Unsecured Long-Term Borrowings
The table below presents information about unsecured
long-term borrowings.

‰ U.S. dollar-denominated debt had interest rates ranging
from 0.48% to 7.68% (with a weighted average rate of
3.34%) as of December 2021 and 0.63% to 9.30% (witha weighted average rate of 4.07%) as of December 2020.
These rates exclude unsecured long-term borrowings
accounted for at fair value under the fair value option.
‰ Non-U.S. dollar-denominated debt had interest rates
ranging from 0.13% to 13.00% (with a weighted averagerate of 1.86%) as of December 2021 and 0.13% to13.00% (with a weighted average rate of 2.20%) as ofDecember 2020. These rates exclude unsecured long-termborrowings accounted for at fair value under the fairvalue option.
The table below presents unsecured long-term borrowings
by maturity.
As of December 2021
$ in millions

Group Inc.

Subsidiaries

Total

2023
2024
2025
2026
2027 – thereafter
Total$ 33,921
27,00323,15818,571
106,143$208,796$ 9,290
6,733
5,645
3,586
20,042$45,296$ 43,211
33,73628,80322,157
126,185$254,092

In the table above:$ in millions

As of December 2021
Fixed-rate obligations:Group Inc.
Subsidiaries
Floating-rate obligations:Group Inc.
Subsidiaries
Total
As of December 2020
Fixed-rate obligations:Group Inc.
Subsidiaries
Floating-rate obligations:Group Inc.
Subsidiaries
Total

U.S.
DollarNon-U.S.
DollarTotal$124,731
1,803$43,2193,189$167,950
4,992

23,452
27,543$177,529

17,394
12,761$76,563

40,84640,304$254,092$ 98,858
1,700$35,614
3,145$134,472
4,845

18,57923,440$142,577

18,871
13,274$70,904

37,45036,714$213,481

In the table above:‰ Unsecured long-term borrowings consists principally of
senior borrowings, which have maturities extending
through 2065.
‰ Floating-rate obligations includes equity-linked, creditlinked and indexed instruments. Floating interest rates are
generally based on USD LIBOR, Euro Interbank Offered
Rate or SOFR.

‰ Unsecured long-term borrowings maturing within one
year of the financial statement date and unsecured longterm borrowings that are redeemable within one year of
the financial statement date at the option of the holder are
excluded as they are included in unsecured short-termborrowings.
‰ Unsecured long-term borrowings that are repayable prior
to maturity at the option of the firm are reflected at theircontractual maturity dates.
‰ Unsecured long-term borrowings that are redeemableprior to maturity at the option of the holder are reflected
at the earliest dates such options become exercisable.
‰ Unsecured long-term borrowings included $6.24 billionof adjustments to the carrying value of certain unsecured
long-term borrowings resulting from the application ofhedge accounting by year of maturity as follows:$91 million in 2023, $305 million in 2024, $270 million
in 2025, $214 million in 2026, and $5.36 billion in 2027
and thereafter.
The firm designates certain derivatives as fair value hedges
to convert a portion of fixed-rate unsecured long-termborrowings not accounted for at fair value into floatingrate obligations. See Note 7 for further information about
hedging activities.

Goldman Sachs 2021 Form 10-K 177

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents unsecured long-term borrowings,
after giving effect to such hedging activities.
$ in millions

As of December 2021
Fixed-rate obligations:
At fair value
At amortized cost
Floating-rate obligations:
At fair value
At amortized cost
Total
As of December 2020
Fixed-rate obligations:
At fair value
At amortized cost
Floating-rate obligations:
At fair value
At amortized cost
Total

Group Inc.

$

4,798
27,133

Subsidiaries

$

65
3,237

$

4,863
30,37034,663
7,331$45,296

47,527
171,332$254,092

$

$

$

9,721
133,312$171,922

114
3,345

29,6698,431$41,559

1,521
30,82739,390141,743$213,481

In the table above, the aggregate amounts of unsecured longterm borrowings had weighted average interest rates of
1.60% (2.25% related to fixed-rate obligations and 1.48%
related to floating-rate obligations) as of December 2021 and
2.01% (3.34% related to fixed-rate obligations and 1.70%
related to floating-rate obligations) as of December 2020.
These rates exclude unsecured long-term borrowings
accounted for at fair value under the fair value option.
The carrying value of unsecured long-term borrowings forwhich the firm did not elect the fair value option was$201.70 billion as of December 2021 and $172.57 billion
as of December 2020. The estimated fair value of such
unsecured long-term borrowings was $209.37 billion as ofDecember 2021 and $183.29 billion as of December 2020.
As these borrowings are not accounted for at fair value,
they are not included in the firm’s fair value hierarchy inNotes 4 through 10. Had these borrowings been included in
the firm’s fair value hierarchy, substantially all would havebeen classified in level 2 as of both December 2021 andDecember 2020.
Subordinated Borrowings
Unsecured long-term borrowings includes subordinateddebt and junior subordinated debt. Subordinated debt thatmatures within one year is included in unsecured short-termborrowings. Junior subordinated debt is junior in right of
payment to other subordinated borrowings, which arejunior to senior borrowings. Long-term subordinated debt
had maturities ranging from 2025 to 2045 as of both
December 2021 and December 2020.

178 Goldman Sachs 2021 Form 10-K

$ in millions

Par
AmountCarrying
Value

Rate

As of December 2021
Subordinated debt
Junior subordinated debt
Total

$12,437968$13,405$15,571
1,321$16,892

1.74%
1.31%
1.71%

As of December 2020
Subordinated debt
Junior subordinated debt
Total

$14,136968$15,104$18,5291,430$19,959

1.83%
1.32%
1.80%

Total

12,864
164,001$208,796

1,407
27,482The table below presents information about subordinatedborrowings.

In the table above:‰ The par amount of subordinated debt issued by Group
Inc. was $12.44 billion as of December 2021 and$14.14 billion as of December 2020, and the carrying
value of subordinated debt issued by Group Inc. was$15.57 billion as of December 2021 and $18.53 billion asof December 2020.
‰ The rate is the weighted average interest rate for theseborrowings (excluding borrowings accounted for at fairvalue under the fair value option), including the effect offair value hedges used to convert fixed-rate obligations
into floating-rate obligations. See Note 7 for further
information about hedging activities.
Junior Subordinated Debt
In 2004, Group Inc. issued $2.84 billion of juniorsubordinated debt to Goldman Sachs Capital I (Trust), a
Delaware statutory trust. The Trust issued $2.75 billion ofguaranteed preferred beneficial interests (Trust Preferred
securities) to third parties and $85 million of common
beneficial interests to Group Inc. As of both
December 2021 and December 2020, the outstanding par
amount of junior subordinated debt held by the Trust was$968 million and the outstanding par amount of Trust
Preferred securities and common beneficial interests issued
by the Trust was $939 million and $29 million,
respectively. The Trust is a wholly-owned financesubsidiary of the firm for regulatory and legal purposes but
is not consolidated for accounting purposes.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The firm pays interest semi-annually on the juniorsubordinated debt at an annual rate of 6.345% and the debt
matures on February 15, 2034. The coupon rate and thepayment dates applicable to the beneficial interests are thesame as the interest rate and payment dates for the juniorsubordinated debt. The firm has the right, from time to time,
to defer payment of interest on the junior subordinated debt,
and therefore cause payment on the Trust’s preferredbeneficial interests to be deferred, in each case up to ten
consecutive semi-annual periods. During any such deferral
period, the firm will not be permitted to, among other things,
pay dividends on or make certain repurchases of its common
stock. The Trust is not permitted to pay any distributions on
the common beneficial interests held by Group Inc. unless all
dividends payable on the preferred beneficial interests havebeen paid in full.
The firm has covenanted in favor of the holders ofGroup Inc.’s 6.345% junior subordinated debt due
February 15, 2034, that, subject to certain exceptions, thefirm will not redeem or purchase the capital securities
issued by Goldman Sachs Capital II and Goldman Sachs
Capital III (APEX Trusts) or shares of Group Inc.’s
Perpetual Non-Cumulative Preferred Stock, Series E(Series E Preferred Stock), Perpetual Non-Cumulative
Preferred Stock, Series F (Series F Preferred Stock) or
Perpetual Non-Cumulative Preferred Stock, Series O, if theredemption or purchase results in less than $253 million
aggregate liquidation preference of that series outstanding,prior to specified dates in 2022 for a price that exceeds amaximum amount determined by reference to the net cash
proceeds that the firm has received from the sale ofqualifying securities.
The APEX Trusts hold Group Inc.’s Series E Preferred
Stock and Series F Preferred Stock. These trusts are
Delaware statutory trusts sponsored by the firm andwholly-owned finance subsidiaries of the firm forregulatory and legal purposes but are not consolidated foraccounting purposes.

Note 15.

Other Liabilities
The table below presents other liabilities by type.
As of December$ in millions

Compensation and benefits
Income tax-related liabilities
Operating lease liabilities
Noncontrolling interests
Employee interests in consolidated funds
Accrued expenses and other
Total

2021

2020

$10,838
2,360
2,288
840
29
8,146
$24,501$ 7,896
3,155
2,283
1,640
34
7,443
$22,451

Operating Lease Liabilities
For leases longer than one year, the firm recognizes aright-of-use asset representing the right to use theunderlying asset for the lease term, and a lease liability
representing the liability to make payments. See Note 12 for
information about operating lease right-of-use assets.
The table below presents information about operating leaseliabilities.
Operatinglease liabilities$ in millions

As of December 2021
2022
2023
2024
2025
2026
2027 - thereafter
Total undiscounted lease payments
Imputed interest
Total operating lease liabilities
Weighted average remaining lease term
Weighted average discount rate
As of December 2020
2021
2022
2023
2024
2025
2026 - thereafter
Total undiscounted lease payments
Imputed interest
Total operating lease liabilities
Weighted average remaining lease term
Weighted average discount rate

$ 305
307
284
258
216
1,655
3,025
(737)
$2,28814 years
3.61%

$ 342
301
264
247
215
1,899
3,268
(985)
$2,28316 years
4.02%

Goldman Sachs 2021 Form 10-K 179

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above, the weighted average discount rate
represents the firm’s incremental borrowing rate as ofJanuary 2019 for operating leases existing on the date ofadoption of ASU No. 2016-02, “Leases (Topic 842),” andat the lease inception date for leases entered into subsequent
to the adoption of this ASU.
Operating lease costs were $463 million for 2021,$458 million for 2020 and $538 million for 2019. Variable
lease costs, which are included in operating lease costs,
were not material for 2021, 2020 and 2019. Total
occupancy expenses for space held in excess of the firm’scurrent requirements were not material for both 2021 and2020.
Lease payments relating to operating lease arrangementsthat were signed, but had not yet commenced were$300 million as of December 2021.
Accrued Expenses and Other
Accrued expenses and other included:‰ Liabilities classified as held for sale of $310 million as ofDecember 2021 related to certain of the firm’s
consolidated investments within the Asset Management
segment, substantially all of which consisted of othersecured financings primarily carried at fair value under
the fair value option, and were related to assets classified
as held for sale. See Note 12 for further information
about assets held for sale. As of December 2020, liabilities
classified as held for sale were not material.
‰ Contract liabilities, which represent consideration
received by the firm in connection with its contracts withclients prior to providing the service. As of both
December 2021 and December 2020, the firm’s contract
liabilities were not material.

The firm accounts for a securitization as a sale when it has
relinquished control over the transferred financial assets.
Prior to securitization, the firm generally accounts for assets
pending transfer at fair value and therefore does not
typically recognize significant gains or losses upon thetransfer of assets. Net revenues from underwriting activities
are recognized in connection with the sales of theunderlying beneficial interests to investors.
The firm generally receives cash in exchange for thetransferred assets but may also have continuing
involvement with the transferred financial assets, including
ownership of beneficial interests in securitized financial
assets, primarily in the form of debt instruments. The firm
may also purchase senior or subordinated securities issued
by securitization vehicles (which are typically VIEs) inconnection with secondary market-making activities.
The primary risks included in beneficial interests and otherinterests from the firm’s continuing involvement withsecuritization vehicles are the performance of theunderlying collateral, the position of the firm’s investmentin the capital structure of the securitization vehicle and themarket yield for the security. Interests accounted for at fairvalue are primarily classified in level 2 of the fair value
hierarchy. Interests not accounted for at fair value arecarried at amounts that approximate fair value. See Notes 4
through 10 for further information about fair value
measurements.
The table below presents the amount of financial assets
securitized and the cash flows received on retained interests
in securitization entities in which the firm had continuing
involvement as of the end of the period.
Year Ended December$ in millions

Note 16.

Securitization Activities
The firm securitizes residential and commercial mortgages,
corporate bonds, loans and other types of financial assets
by selling these assets to securitization vehicles (e.g., trusts,
corporate entities and limited liability companies) or
through a resecuritization. The firm acts as underwriter ofthe beneficial interests that are sold to investors. The firm’s
residential mortgage securitizations are primarily inconnection with government agency securitizations.

180 Goldman Sachs 2021 Form 10-K

2021

2020

2019

Residential mortgages
Commercial mortgages
Other financial assets
Total financial assets$29,048
18,396
4,377$51,821$20,167
14,904
1,775$36,846$15,124
12,741
1,252$29,117

Retained interests cash flows

$

$

$

513

331

286

The firm securitized assets of $886 million for 2021,$551 million for 2020 and $601 million for 2019, in a
non-cash exchange for loans and investments.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The
table
below
presents
information
about
nonconsolidated securitization entities to which the firmsold assets and had continuing involvement as of the end of
the period.

The table below presents information about the weighted
average key economic assumptions used in measuring thefair value of mortgage-backed retained interests.
As of December$ in millions

Outstanding
Principal Retained Purchased
Amount Interests Interests

As of December 2021
U.S. government agency-issued CMOs $ 33,984
Other residential mortgage-backed
23,262Other commercial mortgage-backed
50,350
Corporate debt and other asset-backed
7,755
Total
$115,351

$ 955
1,114
1,123
360
$3,552$As of December 2020
U.S. government agency-issued CMOs $ 20,841
Other residential mortgage-backed
24,262Other commercial mortgage-backed
38,340
Corporate debt and other asset-backed
4,299
Total
$ 87,742

$ 906
1,170
914
192
$3,182

$

3
96
130
37
$266

$ in millions

Fair value of retained interests
Weighted average life (years)
Constant prepayment rate
Impact of 10% adverse change
Impact of 20% adverse change
Discount rate
Impact of 10% adverse change
Impact of 20% adverse change

2021

2020

$3,2095.1
14.1%$ (38)$ (69)
5.6%$ (49)$ (96)$2,9934.7
15.0%$ (25)$ (50)
6.1%$ (42)$ (82)In the table above:
4
23
39
–
$ 66

In the table above:‰ CMOs represents collateralized mortgage obligations.
‰ The outstanding principal amount is presented for the
purpose of providing information about the size of the
securitization entities and is not representative of thefirm’s risk of loss.
‰ The firm’s risk of loss from retained or purchasedinterests is limited to the carrying value of these interests.
‰ Purchased interests represent senior and subordinatedinterests, purchased in connection with secondary
market-making activities, in securitization entities inwhich the firm also holds retained interests.
‰ Substantially all of the total outstanding principal amountand total retained interests relate to securitizations during
2017 and thereafter.
‰ The fair value of retained interests was $3.57 billion as ofDecember 2021 and $3.19 billion as of December 2020.
In addition to the interests in the table above, the firm hadother continuing involvement in the form of derivativetransactionsandcommitments
withcertainnonconsolidated VIEs. The carrying value of thesederivatives and commitments was a net asset of $81 million
as of December 2021 and $52 million as ofDecember 2020, and the notional amount of thesederivatives and commitments was $1.81 billion as ofDecember 2021 and $1.43 billion as of December 2020.
The notional amounts of these derivatives andcommitments are included in maximum exposure to loss inthe nonconsolidated VIE table in Note 17.

‰ Amounts do not reflect the benefit of other financial
instruments that are held to mitigate risks inherent inthese retained interests.
‰ Changes in fair value based on an adverse variation inassumptions generally cannot be extrapolated because therelationship of the change in assumptions to the change infair value is not usually linear.
‰ The impact of a change in a particular assumption is
calculated independently of changes in any otherassumption. In practice, simultaneous changes inassumptions might magnify or counteract the sensitivities
disclosed above.
‰ The constant prepayment rate is included only for
positions for which it is a key assumption in thedetermination of fair value.
‰ The discount rate for retained interests that relate to U.S.
government agency-issued CMOs does not include any
credit loss. Expected credit loss assumptions are reflectedin the discount rate for the remainder of retainedinterests.
The firm has other retained interests not reflected in thetable above with a fair value of $360 million and aweighted average life of 3.6 years as of December 2021, anda fair value of $192 million and a weighted average life of
3.9 years as of December 2020. Due to the nature and fairvalue of certain of these retained interests, the weighted
average assumptions for constant prepayment and discountrates and the related sensitivity to adverse changes are notmeaningful as of both December 2021 and December 2020.
The firm’s maximum exposure to adverse changes in thevalue of these interests is the carrying value of $360 million
as of December 2021 and $192 million as ofDecember 2020.

Goldman Sachs 2021 Form 10-K 181

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 17.

Variable Interest Entities
A variable interest in a VIE is an investment (e.g., debt orequity) or other interest (e.g., derivatives or loans andlending commitments) that will absorb portions of the
VIE’s expected losses and/or receive portions of the VIE’s
expected residual returns.

The firm reassesses its evaluation of whether an entity is a
VIE when certain reconsideration events occur. The firm
reassesses its determination of whether it is the primary
beneficiary of a VIE on an ongoing basis based on current
facts and circumstances.

The firm’s variable interests in VIEs include senior andsubordinated debt; loans and lending commitments; limited
and general partnership interests; preferred and common
equity; derivatives that may include foreign currency,
equity and/or credit risk; guarantees; and certain of the fees
the firm receives from investment funds. Certain interest
rate, foreign currency and credit derivatives the firm enters
into with VIEs are not variable interests because theycreate, rather than absorb, risk.

VIE Activities
The firm is principally involved with VIEs through thefollowing business activities:

VIEs generally finance the purchase of assets by issuing debt
and equity securities that are either collateralized by orindexed to the assets held by the VIE. The debt and equity
securities issued by a VIE may include tranches of varying
levels of subordination. The firm’s involvement with VIEs
includes securitization of financial assets, as described in
Note 16, and investments in and loans to other types of
VIEs, as described below. See Note 3 for the firm’s
consolidation policies, including the definition of a VIE.
VIE Consolidation Analysis
The enterprise with a controlling financial interest in a VIE
is known as the primary beneficiary and consolidates the
VIE. The firm determines whether it is the primary
beneficiary of a VIE by performing an analysis thatprincipally considers:‰ Which variable interest holder has the power to direct theactivities of the VIE that most significantly impact the
VIE’s economic performance;‰ Which variable interest holder has the obligation toabsorb losses or the right to receive benefits from the VIEthat could potentially be significant to the VIE;
‰ The VIE’s purpose and design, including the risks the VIE
was designed to create and pass through to its variableinterest holders;‰ The VIE’s capital structure;‰ The terms between the VIE and its variable interest
holders and other parties involved with the VIE; and‰ Related-party relationships.

182 Goldman Sachs 2021 Form 10-K

Mortgage-Backed VIEs. The firm sells residential andcommercial mortgage loans and securities to mortgagebacked VIEs and may retain beneficial interests in the assets
sold to these VIEs. The firm purchases and sells beneficial
interests issued by mortgage-backed VIEs in connection
with market-making activities. In addition, the firm mayenter into derivatives with certain of these VIEs, primarily
interest rate swaps, which are typically not variableinterests. The firm generally enters into derivatives withother counterparties to mitigate its risk.
Real Estate, Credit- and Power-Related and Other
Investing VIEs. The firm purchases equity and debt
securities issued by and makes loans to VIEs that hold realestate, performing and nonperforming debt, distressedloans, power-related assets and equity securities. The firm
generally does not sell assets to, or enter into derivatives
with, these VIEs.
Corporate Debt and Other Asset-Backed VIEs. The
firm structures VIEs that issue notes to clients, purchases
and sells beneficial interests issued by corporate debt andother asset-backed VIEs in connection with market-making
activities, and makes loans to VIEs that warehousecorporate debt. Certain of these VIEs synthetically create
the exposure for the beneficial interests they issue byentering into credit derivatives with the firm, rather thanpurchasing the underlying assets. In addition, the firm mayenter into derivatives, such as total return swaps, withcertain corporate debt and other asset-backed VIEs, underwhich the firm pays the VIE a return due to the beneficial
interest holders and receives the return on the collateral
owned by the VIE. The collateral owned by these VIEs isprimarily other asset-backed loans and securities. The firm
may be removed as the total return swap counterparty andmay enter into derivatives with other counterparties tomitigate its risk related to these swaps. The firm may sell
assets to the corporate debt and other asset-backed VIEs it
structures.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Principal-Protected Note VIEs. The firm structures VIEs
that issue principal-protected notes to clients. These VIEs
own portfolios of assets, principally with exposure to hedge
funds. Substantially all of the principal protection on thenotes issued by these VIEs is provided by the asset portfolio
rebalancing that is required under the terms of the notes.
The firm enters into total return swaps with these VIEs
under which the firm pays the VIE the return due to theprincipal-protected note holders and receives the return on
the assets owned by the VIE. The firm may enter into
derivatives with other counterparties to mitigate its risk.
The firm also obtains funding through these VIEs.
Investments in Funds. The firm makes equity investments
in certain investment fund VIEs it manages and is entitled toreceive fees from these VIEs. The firm has generally not soldassets to, or entered into derivatives with, these VIEs.
Nonconsolidated VIEs
The table below presents a summary of the nonconsolidated
VIEs in which the firm holds variable interests.
As of December$ in millions

2021

Total nonconsolidated VIEs
Assets in VIEs
$176,809
Carrying value of variable interests — assets $ 9,582
Carrying value of variable interests — liabilities $928
Maximum exposure to loss:
Retained interests$ 3,552
Purchased interests
1,071
Commitments and guarantees
2,440
Derivatives
8,682
Debt and equity
4,639
Total
$ 20,3842020$148,665$ 8,624
$
888
$

3,182
1,041
2,455
8,343
4,020
$ 19,041

In the table above:‰ The nature of the firm’s variable interests is described in
the rows under maximum exposure to loss.
‰ The firm’s exposure to the obligations of VIEs is generally
limited to its interests in these entities. In certain
instances, the firm provides guarantees, including
derivative guarantees, to VIEs or holders of variableinterests in VIEs.
‰ The maximum exposure to loss excludes the benefit ofoffsetting financial instruments that are held to mitigate
the risks associated with these variable interests.
‰ The maximum exposure to loss from retained interests,
purchased interests, and debt and equity is the carrying
value of these interests.
‰ The maximum exposure to loss from commitments andguarantees, and derivatives is the notional amount, which
does not represent anticipated losses and has not been
reduced by unrealized losses. As a result, the maximum
exposure to loss exceeds liabilities recorded forcommitments and guarantees, and derivatives.

The table below presents information, by principal businessactivity, for nonconsolidated VIEs included in the summary
table above.
As of December$ in millions

Mortgage-backed
Assets in VIEs
Carrying value of variable interests — assets
Maximum exposure to loss:
Retained interests
Purchased interests
Commitments and guarantees
Derivatives
Total

2021

2020

$120,343$ 4,147$99,353$ 4,014$$ 2,990
1,024
47
394
$ 4,455

$

3,192
955
34
18
4,199

Real estate, credit- and power-related and other investing
Assets in VIEs
$ 26,867$20,934
Carrying value of variable interests — assets$ 3,923$ 3,288
Carrying value of variable interests — liabilities $8$
14
Maximum exposure to loss:
Commitments and guarantees$ 2,030$ 1,374
Derivatives
64
84
Debt and equity
3,923
3,288
Total
$ 6,017$ 4,746
Corporate debt and other asset-backed
Assets in VIEs
Carrying value of variable interests — assets
Carrying value of variable interests — liabilities
Maximum exposure to loss:
Retained interests
Purchased interests
Commitments and guarantees
Derivatives
Debt and equity
Total
Investments in funds
Assets in VIEs
Carrying value of variable interests — assets
Maximum exposure to loss:
Commitments and guarantees
Derivatives
Debt and equity
Total$ 18,391$ 1,156$920$14,077
$ 913
$ 874

$

$

$

360
116
250
8,597
360
9,683

192
17
989
7,862
323
$ 9,383$ 11,208$
356$14,301
$ 409

$

$

$

126
3
356
485

$

45
3
409
457

As of both December 2021 and December 2020, thecarrying values of the firm’s variable interests innonconsolidated VIEs are included in the consolidatedbalance sheets as follows:‰ Mortgage-backed: Assets primarily included in trading
assets and loans.
‰ Real estate, credit- and power-related and other investing:Assets primarily included in investments and loans, andliabilities included in trading liabilities and otherliabilities.
‰ Corporate debt and other asset-backed: Assets included
in loans and trading assets, and liabilities included in
trading liabilities.
‰ Investments in funds: Assets included in investments.

Goldman Sachs 2021 Form 10-K 183

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Consolidated VIEs
The table below presents a summary of the carrying value
and balance sheet classification of assets and liabilities in
consolidated VIEs.

The table below presents information, by principal businessactivity, for consolidated VIEs included in the summary
table above.

As of December$ in millions

2021

2020

Total consolidated VIEs
AssetsCash and cash equivalents
Trading assets
Investments
Loans
Other assets
Total

$ 501
122
153
1,988
314
$3,078

$ 312
96
880
2,099
989
$4,376

Liabilities
Other secured financings
Customer and other payables
Trading liabilities
Unsecured short-term borrowings
Unsecured long-term borrowings
Other liabilities
Total$1,143
34
7
146
81
163
$1,574$1,891
28
296
43
226
948
$3,432In the table above:‰ Assets and liabilities are presented net of intercompany
eliminations and exclude the benefit of offsetting financial
instruments that are held to mitigate the risks associatedwith the firm’s variable interests.
‰ VIEs in which the firm holds a majority voting interest are
excluded if (i) the VIE meets the definition of a businessand (ii) the VIE’s assets can be used for purposes otherthan the settlement of its obligations.
‰ Substantially all assets can only be used to settle
obligations of the VIE.

As of December$ in millions

2021

2020

Real estate, credit-related and other investing
AssetsCash and cash equivalents
Trading assets
Investments
Loans
Other assets
Total

$ 274
16
153
1,988
314
$2,745

$ 229
8
880
2,099
989
$4,205

Liabilities
Other secured financings
Customer and other payables
Trading liabilities
Other liabilities
Total

$ 150
34
7
163
$ 354

$ 649
28
46
948
$1,671

Corporate debt and other asset-backed
AssetsCash and cash equivalents
Trading assets
Total

$ 227
17
$ 244

$

Liabilities
Other secured financings
Total

$ 602
$ 602

$ 679
$ 679

Principal-protected notes
AssetsTrading assets
Total

$
$

$
$

Liabilities
Other secured financings
Trading liabilities
Unsecured short-term borrowings
Unsecured long-term borrowings
Total

$ 391
–
146
81
$ 618

89
89

$

83
–
83

88
88

$ 563
250
43
226
$1,082In the table above:‰ The majority of the assets in principal-protected notes
VIEs are intercompany and are eliminated inconsolidation.
‰ Creditors and beneficial interest holders of real estate,credit-related and other investing VIEs do not haverecourse to the general credit of the firm.

184 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 18.

Commitments, Contingencies and Guarantees
Commitments
The table below presents commitments by type.
As of December$ in millions

Commitment Type
Commercial lending:Investment-grade
Non-investment-grade
Warehouse financing
Credit cards
Total lending
Risk participations
Collateralized agreement
Collateralized financing
Investment
Other
Total commitments

2021

2020

$ 95,585
69,644
10,39135,932
211,552
10,016
101,031
29,561
11,381
9,143$372,684$ 83,801
56,757
9,377
21,640171,575
8,054
55,27835,4026,456
8,203$284,968

Lending Commitments
The firm’s commercial and warehouse financing lending
commitments are agreements to lend with fixed termination
dates and depend on the satisfaction of all contractual
conditions to borrowing. These commitments are presented
net of amounts syndicated to third parties. The totalcommitment amount does not necessarily reflect actual
future cash flows because the firm may syndicate portionsof these commitments. In addition, commitments can
expire unused or be reduced or cancelled at thecounterparty’s request. The firm also provides credit toconsumers by issuing credit card lines.
The table below presents information about lending
commitments.
As of December

The table below presents commitments by expiration.
As of December 2021
2022

2023 2024

2025 2026

2027 Thereafter

Commitment Type
Commercial lending:Investment-grade$ 19,095
Non-investment-grade
5,353
Warehouse financing
1,584
Credit cards
35,932
Total lending
61,964
Risk participations
1,598
Collateralized agreement 99,455
Collateralized financing
29,561
Investment
6,130
Other
8,801
Total commitments$207,509$29,347
24,0086,350–
59,705
6,340
1,576
–
1,965
297
$69,883$46,021
26,878
2,057–
74,956
1,880
–
–
1,082
–
$77,918$ 1,122
13,405400–
14,927
198
–
–
2,204
45
$17,374$ in millions$ in millions

Held for investment
Held for saleAt fair value
Total

2021

2020

$197,120
13,175
1,257$211,552$162,513
6,594
2,468
$171,575

In the table above:

In the tables above, beginning in the fourth quarter of2021, the firm’s commitments under letters of credit,
issued by various banks which the firm provides tocounterparties to satisfy certain collateral and margindeposit requirements, is included in other commitments.
Previously, such letters of credit were disclosed as aseparate line item in the tables above. Previously reported
amounts have been conformed to the current
presentation.

‰ Held for investment lending commitments are accounted
for at amortized cost. The carrying value of lending
commitments was a liability of $1.05 billion (including
allowance for credit losses of $776 million) as ofDecember 2021 and $775 million (including allowancefor credit losses of $557 million) as of December 2020.
The estimated fair value of such lending commitments
was a liability of $4.17 billion as of December 2021 and$4.05 billion as of December 2020. Had these lending
commitments been carried at fair value and included in
the fair value hierarchy, $1.91 billion as ofDecember 2021 and $2.43 billion as of December 2020
would have been classified in level 2, and $2.26 billion asof December 2021 and $1.62 billion as ofDecember 2020 would have been classified in level 3.
‰ Held for sale lending commitments are accounted for at
the lower of cost or fair value. The carrying value oflending commitments held for sale was a liability of$91 million as of December 2021 and $68 million as ofDecember 2020. The estimated fair value of such lending
commitments approximates the carrying value. Had theselending commitments been included in the fair value
hierarchy, they would have been primarily classified inlevel 3 as of both December 2021 and December 2020.
‰ Gains or losses related to lending commitments at fairvalue, if any, are generally recorded net of any fees inother principal transactions.

Goldman Sachs 2021 Form 10-K 185

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Commercial Lending. The firm’s commercial lending
commitments were primarily extended to investment-grade
corporate borrowers. Such commitments primarily
included $120.99 billion as of December 2021 and$110.31 billion as of December 2020, related torelationship lending activities (principally used for
operating and general corporate purposes) and$21.07 billion as of December 2021 and $15.81 billion asof December 2020, related to other investment banking
activities (generally extended for contingent acquisition
financing and are often intended to be short-term in nature,
as borrowers often seek to replace them with other funding
sources). The firm also extends lending commitments inconnection with other types of corporate lending, as well as
commercial real estate financing. See Note 9 for further
information about funded loans.
To mitigate the credit risk associated with the firm’scommercial lending activities, the firm obtains credit
protection on certain loans and lending commitments throughcredit default swaps, both single-name and index-based
contracts, and through the issuance of credit-linked notes.
Warehouse Financing. The firm provides financing toclients who warehouse financial assets. These arrangements
are secured by the warehoused assets, primarily consistingof residential real estate, consumer and corporate loans.
Credit Cards. The firm’s credit card lending commitments
included $33.97 billion as of December 2021 and$21.64 billion as of December 2020 related to credit cardlines issued by the firm to consumers. These credit card lines
are cancellable by the firm. Credit card commitments also
includes approximately $2.0 billion relating to the firm’s
commitment to acquire a credit card portfolio in
connection with its agreement, in January 2021, to form aco-branded credit card relationship with General Motors.
This acquisition was completed in February 2022.
Risk Participations
The firm also risk participates certain of its commercial
lending commitments to other financial institutions. In theevent of a risk participant’s default, the firm will be
responsible to fund the borrower.
Collateralized
Agreement
Commitments/
Collateralized Financing Commitments
Collateralized agreement commitments includes forward
starting resale and securities borrowing agreements, andcollateralized financing commitments includes forward
starting repurchase and secured lending agreements that
settle at a future date, generally within three business days.
Collateralized agreement commitments also includes
transactions where the firm has entered into commitments
to provide contingent financing to its clients andcounterparties through resale agreements. The firm’s
funding of these commitments depends on the satisfactionof all contractual conditions to the resale agreement andthese commitments can expire unused.
186 Goldman Sachs 2021 Form 10-K

Investment Commitments
Investment commitments includes commitments to invest in
private equity, real estate and other assets directly andthrough funds that the firm raises and manages. Investmentcommitments included $1.60 billion as of December 2021
and $1.69 billion as of December 2020, related tocommitments to invest in funds managed by the firm. If
these commitments are called, they would be funded atmarket value on the date of investment.
Investment commitments also included approximately$1.90 billion as of December 2021 related to the firm’s
commitment to acquire NN Investment Partners, a leading
European asset manager with approximately $320 billion
in assets under supervision, in an all-cash transaction. Thisacquisition is expected to close in the second quarter of2022. In addition, investment commitments included
approximately $2.0 billion as of December 2021 related to
the firm’s commitment to acquire GreenSky, Inc.
(GreenSky), a leading technology company facilitating
point-of-sale financing for merchants and consumers. Thisacquisition is expected to close in the first quarter of 2022.
The GreenSky acquisition will be an all-stock transaction inwhich stockholders of GreenSky and unit holders ofGreenSky Holdings, LLC (GreenSky Holdings) will receive
0.03 shares of the firm’s common stock for each share ofGreenSky Class A common stock and each GreenSky
Holdings common unit. The investment commitment in thetable above represents the purchase price of the acquisition
based on the stock price of Group Inc. as ofDecember 2021. However, the final purchase price of theacquisition will depend upon the stock price of Group Inc.
at the time of the closing of the transaction. In connection
with this transaction, the firm provided a commitment toacquire up to $800 million of loans originated by
GreenSky’s bank partners, and, as of December 2021, had
acquired approximately $200 million of loans under thiscommitment.
Theremainingcommitmentofapproximately $600 million is included in othercommitments in the table above. In the event that theacquisition is not completed, the firm has agreed to provide
a commitment to purchase up to an additional $1.0 billion
of loans originated by GreenSky’s bank partners. This
commitment is not included in the table above.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Contingencies
Legal Proceedings. See Note 27 for information about
legal proceedings.
Guarantees
The table below presents derivatives that meet thedefinition of a guarantee, securities lending and clearing
guarantees and certain other financial guarantees.

$ in millions

Derivatives

Securities
lending andclearing

Other
financialguarantees

As of December 2021
Carrying Value of Net Liability $ 3,406
$
–
$ 234
Maximum Payout/Notional Amount by Period of Expiration
2022$ 68,212$11,046$ 871
2023 - 2024
48,273–3,608
2025 - 2026
19,706–2,015
2027 - thereafter
30,006–97
Total$166,197$11,046$6,591
As of December 2020
Carrying Value of Net Liability$ 4,357$–$ 253
Maximum Payout/Notional Amount by Period of Expiration
2021$ 89,202$21,352$1,2632022 - 2023
56,204–3,304
2024 - 2025
23,389–2,787
2026 - thereafter
32,244–268
Total$201,039$21,352$7,622In the table above:‰ The maximum payout is based on the notional amount of
the contract and does not represent anticipated losses.
‰ Amounts exclude certain commitments to issue standby
letters of credit that are included in lending commitments.
See the tables in “Commitments” above for a summary of
the firm’s commitments.
‰ The carrying value for derivatives included derivative
assets of $1.10 billion as of December 2021 and$1.66 billion as of December 2020, and derivative
liabilities of $4.51 billion as of December 2021 and$6.02 billion as of December 2020.

Derivative Guarantees. The firm enters into various
derivatives that meet the definition of a guarantee under
U.S. GAAP, including written equity and commodity put
options, written currency contracts and interest rate caps,
floors and swaptions. These derivatives are risk managed
together with derivatives that do not meet the definition ofa guarantee, and therefore the amounts in the table above
do not reflect the firm’s overall risk related to derivative
activities. Disclosures about derivatives are not required ifthey may be cash settled and the firm has no basis toconclude it is probable that the counterparties held theunderlying instruments at inception of the contract. The
firm has concluded that these conditions have been met for
certain large, internationally active commercial andinvestment bank counterparties, central clearing
counterparties, hedge funds and certain othercounterparties. Accordingly, the firm has not included suchcontracts in the table above. See Note 7 for information
about credit derivatives that meet the definition of aguarantee, which are not included in the table above.
Derivatives are accounted for at fair value and therefore thecarrying value is considered the best indication of payment/
performance risk for individual contracts. However, thecarrying values in the table above exclude the effect ofcounterparty and cash collateral netting.
Securities Lending and Clearing Guarantees. Securities
lending
andclearing
guarantees
includetheindemnifications and guarantees that the firm provides in
its capacity as an agency lender and in its capacity as asponsoring member of the Fixed Income Clearing
Corporation.
As an agency lender, the firm indemnifies most of its
securities lending customers against losses incurred in theevent that borrowers do not return securities and thecollateral held is insufficient to cover the market value ofthe securities borrowed. The maximum payout of suchindemnifications was $11.05 billion as of December 2021
and $19.86 billion as of December 2020. Collateral held by
the lenders in connection with securities lendingindemnifications was $11.36 billion as of December 2021
and $20.39 billion as of December 2020. Because thecontractual nature of these arrangements requires the firm
to obtain collateral with a market value that exceeds thevalue of the securities lent to the borrower, there is minimal
performance risk associated with these indemnifications.

Goldman Sachs 2021 Form 10-K 187

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
As a sponsoring member of the Government Securities
Division of the Fixed Income Clearing Corporation, thefirm guarantees the performance of its sponsored member
clients to the Fixed Income Clearing Corporation inconnection with certain resale and repurchase agreements.
To minimize potential losses on such guarantees, the firm
obtains a security interest in the collateral that thesponsored client placed with the Fixed Income Clearing
Corporation. Therefore, the risk of loss on such guarantees
is minimal. There were no amounts outstanding under theguarantee as of December 2021. As of December 2020, themaximum payout on this guarantee was $1.49 billion andthe related collateral held was $1.50 billion.
Other Financial Guarantees. In the ordinary course ofbusiness, the firm provides other financial guarantees of theobligations of third parties (e.g., standby letters of credit
and other guarantees to enable clients to complete
transactions and fund-related guarantees). These
guarantees represent obligations to make payments tobeneficiaries if the guaranteed party fails to fulfill its
obligation under a contractual arrangement with that
beneficiary. Other financial guarantees also include aguarantee that the firm has provided to the Government of
Malaysia that it will receive at least $1.4 billion in assets
and proceeds from assets seized by governmental
authorities around the world related to 1Malaysia
Development Berhad, a sovereign wealth fund in Malaysia(1MDB). The firm evaluates progress toward satisfying thisobligation based on the report that it receives on a semiannual basis, expected in February and August. Based on
the latest report as of August 2021, approximately$450 million in assets or proceeds from assets has beenreturned to the Government of Malaysia in connection withthis guarantee, which must be satisfied by August 18, 2025.
Any amounts paid by the firm under this guarantee would
be subject to reimbursement in the event the assets orproceeds received by the Government of Malaysia throughAugust 18, 2028 exceeds $1.4 billion. See Note 27 forfurther information about matters related to 1MDB.
Guarantees of Securities Issued by Trusts. The firm hasestablished trusts, including Goldman Sachs Capital I, the
APEX Trusts and other entities, for the limited purpose of
issuing securities to third parties, lending the proceeds tothe firm and entering into contractual arrangements withthe firm and third parties related to this purpose. The firm
does not consolidate these entities. See Note 14 for further
information about the transactions involving Goldman
Sachs Capital I and the APEX Trusts.

188 Goldman Sachs 2021 Form 10-K

The firm effectively provides for the full and unconditional
guarantee of the securities issued by these entities. Timely
payment by the firm of amounts due to these entities under
the guarantee, borrowing, preferred stock and related
contractual arrangements will be sufficient to cover
payments due on the securities issued by these entities. No
subsidiary of Group Inc. guarantees the securities ofGoldman Sachs Capital I or the APEX Trusts.
Management believes that it is unlikely that any
circumstances will occur, such as nonperformance on thepart of paying agents or other service providers, that would
make it necessary for the firm to make payments related tothese entities other than those required under the terms ofthe guarantee, borrowing, preferred stock and related
contractual arrangements and in connection with certain
expenses incurred by these entities.
Indemnities and Guarantees of Service Providers. In
the ordinary course of business, the firm indemnifies andguarantees certain service providers, such as clearing andcustody agents, trustees and administrators, against
specified potential losses in connection with their acting asan agent of, or providing services to, the firm or its
affiliates.
The firm may also be liable to some clients or other parties
for losses arising from its custodial role or caused by acts oromissions of third-party service providers, including
sub-custodians and third-party brokers. In certain cases, thefirm has the right to seek indemnification from these thirdparty service providers for certain relevant losses incurredby the firm. In addition, the firm is a member of payment,
clearing and settlement networks, as well as securities
exchanges around the world that may require the firm tomeet the obligations of such networks and exchanges in theevent of member defaults and other loss scenarios.
In connection with the firm’s prime brokerage and clearing
businesses, the firm agrees to clear and settle on behalf of its
clients the transactions entered into by them with otherbrokerage firms. The firm’s obligations in respect of suchtransactions are secured by the assets in the client’s account,
as well as any proceeds received from the transactions
cleared and settled by the firm on behalf of the client. In
connection with joint venture investments, the firm may
issue loan guarantees under which it may be liable in theevent of fraud, misappropriation, environmental liabilities
and certain other matters involving the borrower.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The firm is unable to develop an estimate of the maximum
payout under these guarantees and indemnifications.
However, management believes that it is unlikely the firm
will have to make any material payments under thesearrangements, and no material liabilities related to theseguarantees and indemnifications have been recognized in
the consolidated balance sheets as of both December 2021
and December 2020.
Other
Representations,
Warranties
andIndemnifications. The firm provides representations andwarranties to counterparties in connection with a variety ofcommercial transactions and occasionally indemnifies themagainst potential losses caused by the breach of those
representations and warranties. The firm may also provide
indemnifications protecting against changes in or adverse
application of certain U.S. tax laws in connection withordinary-course transactions, such as securities issuances,borrowings or derivatives.
In addition, the firm may provide indemnifications to somecounterparties to protect them in the event additional taxes
are owed or payments are withheld, due either to a change
in or an adverse application of certain non-U.S. tax laws.
These indemnifications generally are standard contractual
terms and are entered into in the ordinary course ofbusiness. Generally, there are no stated or notionalamounts included in these indemnifications, and thecontingencies triggering the obligation to indemnify are notexpected to occur. The firm is unable to develop an estimateof the maximum payout under these guarantees andindemnifications. However, management believes that it isunlikely the firm will have to make any material payments
under these arrangements, and no material liabilities related
to these arrangements have been recognized in the
consolidated balance sheets as of both December 2021 andDecember 2020.
Guarantees of Subsidiaries. Group Inc. is the entity thatfully and unconditionally guarantees the securities issued by
GS Finance Corp., a wholly-owned finance subsidiary of
the firm. Group Inc. has guaranteed the payment
obligations of Goldman Sachs & Co. LLC (GS&Co.), GS
Bank USA and Goldman Sachs Paris Inc. et Cie, subject tocertain exceptions. In addition, Group Inc. has provided
guarantees to Goldman Sachs International (GSI) andGoldman Sachs Bank Europe SE (GSBE) related toagreements that each entity has entered into with certain of
its counterparties. Furthermore, Group Inc. provided aguarantee to GS Bank USA in 2020 related to securities that
GS Bank USA acquired from certain affiliated funds ofGroup Inc. and loans and lending commitments that GS
Bank USA acquired from certain subsidiaries of Group Inc.
As of December 2021, none of the securities acquired fromthe affiliated funds were outstanding.

Group Inc. guarantees many of the obligations of its otherconsolidated subsidiaries on a transaction-by-transaction
basis, as negotiated with counterparties. Group Inc. isunable to develop an estimate of the maximum payout
under its subsidiary guarantees. However, because theseobligations are also obligations of consolidated
subsidiaries, Group Inc.’s liabilities as guarantor are notseparately disclosed.
Note 19.

Shareholders’ Equity
Common Equity
As of both December 2021 and December 2020, the firm
had 4.00 billion authorized shares of common stock and
200 million authorized shares of nonvoting common stock,each with a par value of $0.01 per share.
The firm’s share repurchase program is intended to help
maintain the appropriate level of common equity. The
share repurchase program is effected primarily throughregular open-market purchases (which may include
repurchase plans designed to comply with Rule 10b5-1 andaccelerated share repurchases), the amounts and timing of
which are determined primarily by the firm’s current andprojected capital position, and capital deployment
opportunities, but which may also be influenced by generalmarket conditions and the prevailing price and trading
volumes of the firm’s common stock. The firm suspended
stock repurchases during the first quarter of 2020 and,consistent with the FRB’s requirement for all large bankholding companies (BHCs), extended the suspension ofstock repurchases through the fourth quarter of 2020. The
firm resumed stock repurchases in the first quarter of 2021.
The table below presents information about common stock
repurchases.
Year Ended Decemberin millions, except per share amounts

2021

2020

2019

Common share repurchases
15.3
8.2
25.8
Average cost per share$339.81 $236.35 $206.56
Total cost of common share repurchases $ 5,200 $ 1,928 $ 5,335

Pursuant to the terms of certain share-based compensationplans, employees may remit shares to the firm or the firm
may cancel share-based awards to satisfy statutory
employee tax withholding requirements. Under these plans,
1,830 shares in 2021, 3,476 shares in 2020 and 7,490
shares in 2019 were remitted with a total value of$0.5 million in 2021, $0.9 million in 2020 and $2 million in
2019, and the firm cancelled 3.4 million share-based
awards in 2021, 3.4 million in 2020 and 3.8 million in2019 with a total value of $984 million in 2021,$829 million in 2020 and $743 million in 2019.

Goldman Sachs 2021 Form 10-K 189

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents common stock dividends declared.
Year Ended December

Dividends declared per common share

2021

2020

2019

$6.50

$5.00

$4.15

On January 14, 2022, the Board of Directors of Group Inc.
(Board) declared a dividend of $2.00 per common share tobe paid on March 30, 2022 to common shareholders ofrecord on March 2, 2022.
Preferred Equity
The tables below present information about the perpetual
preferred stock issued and outstanding as of December 2021.

SeriesSharesAuthorized

SharesIssuedSharesOutstanding

Depositary Shares
Per Share

A
C
D
E
F
J
K
O
P
Q
R
S
T
U
V
Total

50,00025,00060,00017,5005,000
46,00032,20026,00066,00020,00024,00014,00027,00030,00030,000472,700

30,0008,000
54,0007,667
1,615
40,00028,00026,00060,00020,00024,00014,00027,00030,00030,000400,282

29,9998,000
53,9997,667
1,615
40,00028,00026,00060,00020,00024,00014,00027,00030,00030,000400,280

1,000
1,000
1,000
N/A
N/A
1,000
1,000
25
25
25
25
25
25
25
25

Series

Earliest Redemption Date

Liquidation
Preference

A
C
D
E
F
J
K
O
P
Q
R
S
T
U
V
Total

Currently redeemable
Currently redeemable
Currently redeemable
Currently redeemable
Currently redeemable
May 10, 2023
May 10, 2024
November 10, 2026
November 10, 2022
August 10, 2024
February 10, 2025
February 10, 2025
May 10, 2026
August 10, 2026
November 10, 2026

$ 25,000$ 25,000$ 25,000$100,000$100,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ 25,000

Redemption
Value($ in millions)

$

750
200
1,350
767
161
1,000
700
650
1,500
500
600
350
675
750
750
$10,703

In the tables above:‰ All shares have a par value of $0.01 per share and, whereapplicable, each share is represented by the specified
number of depositary shares.
‰ The earliest redemption date represents the date on which
each share of non-cumulative preferred stock isredeemable at the firm’s option.
‰ Prior to redeeming preferred stock, the firm must receive
approval from the FRB.
190 Goldman Sachs 2021 Form 10-K

‰ In October 2021, the firm issued 30,000 shares ofSeries V 4.125% Fixed-Rate Reset Non-Cumulative
Preferred Stock (Series V Preferred Stock).
‰ In July 2021, the firm issued 30,000 shares of Series U
3.65% Fixed-Rate Reset Non-Cumulative Preferred
Stock (Series U Preferred Stock).
‰ In April 2021, the firm issued 27,000 shares of Series T
3.80% Fixed-Rate Reset Non-Cumulative Preferred
Stock (Series T Preferred Stock).
‰ The redemption price per share for Series A through F and
Series Q through V Preferred Stock is the liquidationpreference plus declared and unpaid dividends. The
redemption price per share for Series J through P
Preferred Stock is the liquidation preference plus accrued
and unpaid dividends. Each share of Series E and Series F
Preferred Stock is redeemable at the firm’s option, subject
to certain covenant restrictions governing the firm’s
ability to redeem the preferred stock without issuingcommon stock or other instruments with equity-likecharacteristics. See Note 14 for information about the
replacement capital covenants applicable to the Series E
and Series F Preferred Stock.
‰ All series of preferred stock are pari passu and have apreference over the firm’s common stock on liquidation.
‰ The firm’s ability to declare or pay dividends on, orpurchase, redeem or otherwise acquire, its common stock
is subject to certain restrictions in the event that the firm
fails to pay or set aside full dividends on the preferredstock for the latest completed dividend period.
In 2021, the firm redeemed all outstanding shares of its(i) Series N 6.30% Non-Cumulative Preferred Stock with aredemption value of $675 million ($25,000 per share), plus
accrued and unpaid dividends and its (ii) Series M 5.375%
Fixed-to-Floating Rate Non-Cumulative Preferred Stockwith a redemption value of $2 billion ($25,000 per share),plus accrued and unpaid dividends. The difference between
the redemption value and net carrying value at the time ofthese redemptions was $41 million, which was recorded as
an addition to preferred stock dividends in 2021.
In 2020, the firm redeemed the remaining 14,000
outstanding shares of its Series L 5.70% Non-Cumulative
Preferred Stock with a redemption value of $350 million($25,000 per share), plus accrued and unpaid dividends.
The difference between the redemption value and net
carrying value was $1 million, which was recorded as anaddition to preferred stock dividends in 2020.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents the dividend rates of perpetual
preferred stock as of December 2021.
Series

A
C
D
E
F
J
K
O
P
Q
R
S
T
U
V

Per Annum Dividend Rate

3 month LIBOR + 0.75%, with floor of 3.75%, payable quarterly
3 month LIBOR + 0.75%, with floor of 4.00%, payable quarterly
3 month LIBOR + 0.67%, with floor of 4.00%, payable quarterly
3 month LIBOR + 0.7675%, with floor of 4.00%, payable quarterly
3 month LIBOR + 0.77%, with floor of 4.00%, payable quarterly
5.50% to, but excluding, May 10, 2023;
3 month LIBOR + 3.64% thereafter, payable quarterly
6.375% to, but excluding, May 10, 2024;
3 month LIBOR + 3.55% thereafter, payable quarterly
5.30%, payable semi-annually, from issuance date to, but excluding,November 10, 2026; 3 month LIBOR + 3.834%, payable quarterly, thereafter
5.00%, payable semi-annually, from issuance date to, but excluding,November 10, 2022; 3 month LIBOR + 2.874%, payable quarterly, thereafter
5.50%, payable semi-annually, from issuance date to, but excluding,August 10, 2024; 5 year treasury rate + 3.623%, payable semi-annually, thereafter
4.95%, payable semi-annually, from issuance date to, but excluding,
February 10, 2025; 5 year treasury rate + 3.224%, payable semi-annually, thereafter
4.40%, payable semi-annually, from issuance date to, but excluding,
February 10, 2025; 5 year treasury rate + 2.85%, payable semi-annually thereafter
3.80%, payable semi-annually, from issuance date to, but excluding,
May 10, 2026; 5 year treasury rate + 2.969%, payable semi-annually, thereafter
3.65%, payable semi-annually, from issuance date to, but excluding,August 10, 2026; 5 year treasury rate + 2.915%, payable semi-annually, thereafter
4.125%, payable semi-annually, from issuance date to, but excluding,November 10, 2026; 5 year treasury rate + 2.949%, payable semi-annually, thereafter

In the table above, dividends on each series of preferredstock are payable in arrears for the periods specified.
The table below presents preferred stock dividends
declared.
Year Ended December
2021

2020

2019

per
share

$ in
millions

per
share

$ in
millions

per
share

$ in
millionsA$ 950.51
B$–C$1,013.90
D$1,013.90
E$4,055.55
F$4,055.55
J$1,375.00
K$1,593.76
L
$
–
M
$
–
N
$ 787.50
O$1,325.00
P$1,250.00
Q$1,375.00
R$1,237.50
S$1,100.00
T$ 511.94
Total

$ 28
–
8
55
31
7
55
44
–
–
19
34
75
28
30
15
14
$443

$ 947.92$–$1,011.12$1,011.12$4,055.55$4,055.55$1,375.00$1,593.76$ 361.54$1,217.16$1,575.00$1,325.00$1,250.00$1,577.43$ 910.94$ 586.67
$
–

$ 28
–
8
55
31
6
55
45
4
97
43
34
75
32
22
8
–
$543

$ 947.92$ 775.00$1,011.11$1,011.11$4,044.44$4,044.44$1,375.00$1,593.76$1,519.67$1,343.76$1,575.00$1,325.00$1,250.00
$
–
$
–
$
–
$
–

$ 28
5
8
54
31
7
55
45
68
107
43
34
75
–
–
–
–
$560

SeriesOn January 6, 2022, Group Inc. declared dividends of$239.58 per share of Series A Preferred Stock, $255.56 pershare of Series C Preferred Stock, $255.56 per share ofSeries D Preferred Stock, $343.75 per share of Series J
Preferred Stock, $398.44 per share of Series K Preferred
Stock, $687.50 per share of Series Q Preferred Stock,$618.75 per share of Series R Preferred Stock, $550.00 per
share of Series S Preferred Stock and $486.67 per share ofSeries U Preferred Stock to be paid on February 10, 2022 topreferred shareholders of record on January 26, 2022. In
addition, the firm declared dividends of $1,000.00 per
share of Series E Preferred Stock and $1,000.00 per share ofSeries F Preferred Stock to be paid on March 1, 2022 topreferred shareholders of record on February 14, 2022.
Accumulated Other Comprehensive Income/(Loss)
The table below presents changes in accumulated othercomprehensive income/(loss), net of tax, by type.

$ in millions

Other
comprehensive
income/(loss)
Beginning adjustments,
balance
net of tax

Year Ended December 2021
Currency translation$ (696)
Debt valuation adjustment(833)
Pension and postretirement liabilities(368)
Available-for-sale securities
463
Total
$(1,434)
Year Ended December 2020
Currency translation$ (616)
Debt valuation adjustment(572)
Pension and postretirement liabilities(342)
Available-for-sale securities
46
Total$(1,484)
Year Ended December 2019
Currency translation$ (621)
Debt valuation adjustment
1,507
Pension and postretirement liabilities(81)
Available-for-sale securities
(112)
Total
$ 693

Endingbalance$(42) $ (738)
322
(511)
41
(327)
(955)
(492)
$ (634) $(2,068)$(80) $ (696)
(261)
(833)
(26)
(368)
417
463
$
50 $(1,434)$

5 $ (616)(2,079)
(572)
(261)
(342)
158
46
$(2,177) $(1,484)

Goldman Sachs 2021 Form 10-K 191

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 20.

Regulation and Capital Adequacy
The FRB is the primary regulator of Group Inc., a BHC
under the U.S. Bank Holding Company Act of 1956 and afinancial holding company under amendments to this Act.
The firm is subject to consolidated regulatory capitalrequirements which are calculated in accordance with theregulations of the FRB (Capital Framework).
The capital requirements are expressed as risk-based capitaland leverage ratios that compare measures of regulatory
capital to risk-weighted assets (RWAs), average assets andoff-balance sheet exposures. Failure to comply with thesecapital requirements would result in restrictions being
imposed by the firm’s regulators and could limit the firm’s
ability to repurchase shares, pay dividends and makecertain discretionary compensation payments. The firm’s
capital levels are also subject to qualitative judgments by
the regulators about components of capital, risk weightingsand other factors. Furthermore, certain of the firm’s
subsidiaries are subject to separate regulations and capitalrequirements.
Capital Framework
The regulations under the Capital Framework are largely
based on the Basel Committee on Banking Supervision’s(Basel Committee) capital framework for strengthening
international capital standards (Basel III) and also
implement certain provisions of the Dodd-Frank Act.
Under the Capital Framework, the firm is an “Advanced
approach” banking organization and has been designatedas a global systemically important bank (G-SIB).
The Capital Framework includes the minimum risk-based
capital and the capital conservation buffer requirements.
The buffer must consist entirely of capital that qualifies as
Common Equity Tier 1 (CET1) capital.
The firm calculates its CET1 capital, Tier 1 capital andTotal capital ratios in accordance with both theStandardized and Advanced Capital Rules. Each of theratios calculated under the Standardized and Advanced
Capital Rules must meet its respective capital requirements.
Under the Capital Framework, the firm is also subject toleverage requirements which consist of a minimum Tier 1
leverage ratio and a minimum supplementary leverage ratio(SLR), as well as the SLR buffer.

192 Goldman Sachs 2021 Form 10-K

Consolidated Regulatory Capital Requirements
Risk-Based Capital Ratios. The table below presents therisk-based capital requirements.
Standardized

Advanced

As of December 2021
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

13.4%
14.9%
16.9%

9.5%
11.0%
13.0%

As of December 2020
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

13.6%
15.1%
17.1%

9.5%
11.0%
13.0%

In the table above:‰ As of both December 2021 and December 2020, underboth the Standardized and Advanced Capital Rules, theCET1 capital ratio requirement includes a minimum of
4.5%, the Tier 1 capital ratio requirement includes aminimum of 6.0% and the Total capital ratio
requirement includes a minimum of 8.0%. These
requirements also include the capital conservation buffer
requirements, consisting of the G-SIB surcharge of 2.5%
(Method 2) and the countercyclical capital buffer, which
the FRB has set to zero percent. In addition, the capitalconservation buffer requirements include the stresscapital buffer (SCB) of 6.4% as of December 2021 and6.6% as of December 2020 under the Standardized
Capital Rules and a buffer of 2.5% as of both
December 2021 and December 2020 under the Advanced
Capital Rules.
‰ The G-SIB surcharge is updated annually based on
financial data from the prior year and is generally
applicable for the following year. The G-SIB surcharge iscalculated using two methodologies, the higher of whichis reflected in the firm’s risk-based capital requirements.
The first calculation (Method 1) is based on the BaselCommittee’s methodology which, among other factors,
relies upon measures of the size, activity and complexityof each G-SIB. The second calculation (Method 2) uses
similar inputs but includes a measure of reliance on shortterm wholesale funding.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents information about risk-based
capital ratios.
$ in millions

As of December 2021
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
As of December 2020
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

Standardized

Leverage Ratios. The table below presents the leverage
requirements.

Advanced$ 96,254$106,766$ 14,636$121,402$676,863$ 96,254$106,766$ 12,051$118,817$647,921

14.2%
15.8%
17.9%

14.9%
16.5%
18.3%

$ 81,641$ 92,730$ 15,424$108,154$554,162$ 81,641$ 92,730$ 13,279$106,009$609,750

14.7%
16.7%
19.5%

13.4%
15.2%
17.4%

In the table above,‰ As permitted by the FRB, the firm elected to temporarily
delay the estimated effects of adopting CECL on
regulatory capital until January 2022 and to subsequently
phase in the effects through January 2025. In addition,
the firm elected to increase regulatory capital by 25% of
the increase in the allowance for credit losses since
January 1, 2020, as permitted by the rules issued by the
FRB. The impact of this increase will also be phased inover the three-year transition period. Reflecting the full
impact of CECL as of both December 2021 andDecember 2020 would not have had a material impact on
the firm’s capital ratios.
‰ In the third quarter of 2021, based on regulatory feedback,the firm revised certain interpretations of the Capital Rules
underlying the calculation of Standardized RWAs. As of
December 2020, this change would have increased thefirm’s Standardized RWAs of $554 billion byapproximately $23 billion, which would have reduced thefirm’s Standardized CET1 capital ratio of 14.7% by 0.6
percentage points, Standardized Tier 1 capital ratio of
16.7% by 0.6 percentage points and Standardized Total
capital ratio of 19.5% by 0.8 percentage points.
‰ In December 2021, the firm early adopted the U.S. federalbank regulatory agencies’ final rule that implements the
new standardized approach for counterparty credit risk
(SA-CCR). SA-CCR replaced the current exposure method
for calculating the exposure amount of derivative contracts
for determining Standardized RWAs and supplementary
leverage exposure. Adoption of SA-CCR resulted in adecrease to the firm’s Standardized CET1 capital ratio byapproximately 0.3 percentage points as of December 2021.

Requirements

Tier 1 leverage ratio
SLR

4.0%
5.0%

In the table above, the SLR requirement of 5% includes aminimum of 3% and a 2% buffer applicable to G-SIBs.
The table below presents information about leverage ratios.
For the Three Months
Ended or as of December$ in millions

2021

2020

Tier 1 capital$ 106,766$

Average total assets
Deductions from Tier 1 capital
Average adjusted total assets
Impact of SLR temporary amendment
Off-balance sheet and other exposures
Total leverage exposure$1,466,770(4,583)
1,462,187–
448,334$1,910,521$1,152,785(4,948)1,147,837(202,748)
387,848$1,332,937

7.3%
5.6%

8.1%
7.0%

Tier 1 leverage ratio
SLR

92,730In the table above:‰ Average total assets represents the average daily assets forthe quarter adjusted for the impact of CECL transition.
‰ Impact of SLR temporary amendment represented theexclusion of average holdings of U.S. Treasury securities
and average deposits at the Federal Reserve as permitted
by the FRB. The impact of this temporary amendment
was an increase in the firm’s SLR by approximately 1.0
percentage points for the three months ended
December 2020. The amendment permitting thisexclusion expired on April 1, 2021.
‰ Off-balance sheet and other exposures primarily includes
the monthly average of off-balance sheet exposures,consisting of derivatives, securities financing transactions,commitments and guarantees.
‰ Tier 1 leverage ratio is calculated as Tier 1 capital divided
by average adjusted total assets.
‰ SLR is calculated as Tier 1 capital divided by total
leverage exposure. Adoption of SA-CCR in
December 2021, as described above, did not result in amaterial impact to the firm’s SLR for the three months
ended December 2021.

Goldman Sachs 2021 Form 10-K 193

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Risk-Based Capital. The table below presents information
about risk-based capital.
As of December$ in millions‰ Deduction for investments in covered funds represents thefirm’s aggregate investments in applicable covered funds,
excluding investments that are subject to an extended
conformance period. See Note 8 for further information
about the Volcker Rule.

2021

2020

Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
CET1 capitalPreferred stock
Deduction for investments in covered funds
Other adjustments
Tier 1 capital$ 99,223
1,105(3,610)(401)(63)
96,254
10,703(189)(2)$106,766$ 84,729
1,126(3,652)(601)
39
81,641
11,203(106)(8)$ 92,730‰ Other adjustments within CET1 capital and Tier 1 capital
primarily include credit valuation adjustments onderivative liabilities, the overfunded portion of the firm’s
defined benefit pension plan obligation net of associateddeferred tax liabilities, disallowed deferred tax assets,
debt valuation adjustments and other required credit riskbased deductions. Other adjustments within Advanced
Tier 2 capital include eligible credit reserves.

Standardized Tier 2 and Total capital
Tier 1 capital
Qualifying subordinated debt
Junior subordinated debt
Allowance for credit losses
Other adjustments
Standardized Tier 2 capitalStandardized Total capital$106,766
11,554
94
3,034
(46)
14,636$121,402$ 92,730
12,196
188
3,095
(55)
15,424$108,154‰ Qualifying subordinated debt is subordinated debt issued
by Group Inc. with an original maturity of five years or
greater. The outstanding amount of subordinated debt
qualifying for Tier 2 capital is reduced upon reaching aremaining maturity of five years. See Note 14 for further
information about the firm’s subordinated debt.

Advanced Tier 2 and Total capital
Tier 1 capitalStandardized Tier 2 capital
Allowance for credit losses
Other adjustments
Advanced Tier 2 capital
Advanced Total capital$106,766
14,636(3,034)449
12,051$118,817$ 92,730
15,424(3,095)
950
13,279$106,009

In the table above:‰ Impact of CECL transition represents the impact of
adoption as of January 1, 2020 and the impact of increasing
regulatory capital by 25% of the increase in the allowancefor credit losses since January 1, 2020. The allowance for
credit losses within Standardized and Advanced Tier 2
capital also reflects the impact of these adjustments.
‰ Deduction for goodwill was net of deferred tax liabilities
of $675 million as of December 2021 and $680 million asof December 2020.
‰ Deduction for identifiable intangible assets was net ofdeferred tax liabilities of $17 million as ofDecember 2021 and $29 million as of December 2020.

194 Goldman Sachs 2021 Form 10-K

‰ Junior subordinated debt is debt issued to a Trust. As of
December 2021, 10% of this debt was included in Tier 2
capital and 90% was phased out of regulatory capital. As
of December 2020, 20% of this debt was included inTier 2 capital and 80% was phased out of regulatory
capital. Junior subordinated debt is reduced by theamount of Trust Preferred securities purchased by thefirm and was fully phased out of Tier 2 capital beginning
in January 2022. See Note 14 for further information
about the firm’s junior subordinated debt and Trust
Preferred securities.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents changes in CET1 capital, Tier 1
capital and Tier 2 capital.
$ in millions

Year Ended December 2021
CET1 capital
Beginning balance
Change in:Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
Ending balance
Tier 1 capital
Beginning balance
Change in:
CET1 capital
Deduction for investments in covered funds
Preferred stock
Other adjustments
Ending balance
Tier 2 capital
Beginning balance
Change in:
Qualifying subordinated debt
Junior subordinated debt
Allowance for credit losses
Other adjustments
Ending balance
Total capitalYear Ended December 2020
CET1 capital
Beginning balance
Change in:Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
Ending balance
Tier 1 capital
Beginning balance
Change in:
CET1 capital
Deduction for investments in covered funds
Other adjustments
Ending balance
Tier 2 capital
Beginning balance
Change in:
Qualifying subordinated debt
Junior subordinated debt
Allowance for credit losses
Other adjustments
Ending balance
Total capitalStandardized

Advanced$ 81,641 $ 81,641
14,494
14,494
(21)
(21)
42
42
200
200
(102)
(102)
$ 96,254 $ 96,254$ 92,730 $ 92,730
14,613
14,613
(83)
(83)
(500)
(500)
6
6
106,766 106,766
15,424

13,279

(642)
(642)
(94)
(94)
(61)
–
9
(492)
14,636
12,051$121,402 $118,817$ 74,850 $ 74,850
5,667
5,667
1,126
1,126
(123)
(123)
3
3
118
118
$ 81,641 $ 81,641

RWAs. RWAs are calculated in accordance with both theStandardized and Advanced Capital Rules.
Credit Risk
Credit RWAs are calculated based on measures of
exposure, which are then risk weighted under theStandardized and Advanced Capital Rules:‰ The Standardized Capital Rules apply prescribed riskweights, which depend largely on the type ofcounterparty. The exposure measure for derivatives andsecurities financing transactions are based on specificformulas which take certain factors into consideration.
‰ Under the Advanced Capital Rules, the firm computes
risk-weights for wholesale and retail credit exposures inaccordance with the Advanced Internal Ratings-Basedapproach. The exposure measures for derivatives andsecurities financing transactions are computed utilizing
internal models.
‰ For both Standardized and Advanced credit RWAs, therisk-weights for securitizations and equities are based on
specific required formulaic approaches.
Market Risk
RWAs for market risk in accordance with the Standardized
and Advanced Capital Rules are generally consistent.
Market RWAs are calculated based on measures of
exposure which include the following:‰ Value-at-Risk (VaR) is the potential loss in value of
trading assets and liabilities, as well as certain
investments, loans, and other financial assets andliabilities accounted for at fair value, due to adverse
market movements over a defined time horizon with a
specified confidence level.

$ 85,440 $ 85,440
6,791
504
(5)
92,730

6,791
504
(5)
92,73014,925

13,473

(651)
(651)
(96)
(96)
1,293
–
(47)
553
15,424
13,279$108,154 $106,009

Goldman Sachs 2021 Form 10-K 195

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
For both risk management purposes and regulatory capital
calculations, the firm uses a single VaR model which
captures risks, including those related to interest rates,
equity prices, currency rates and commodity prices.
However, VaR used for risk management purposes differsfrom VaR used for regulatory capital requirements(regulatory VaR) due to differences in time horizons,confidence levels and the scope of positions on which VaR
is calculated. For risk management purposes, a 95%
one-day VaR is used, whereas for regulatory capitalrequirements, a 99% 10-day VaR is used to determineMarket RWAs and a 99% one-day VaR is used todetermine regulatory VaR exceptions. In addition, the daily
net revenues used to determine risk management VaR
exceptions (i.e., comparing the daily net revenues to the
VaR measure calculated as of the end of the prior businessday) include intraday activity, whereas the Capital
Framework requires that intraday activity be excluded fromdaily net revenues when calculating regulatory VaR
exceptions. Intraday activity includes bid/offer net
revenues, which are more likely than not to be positive by
their nature. As a result, there may be differences in thenumber of VaR exceptions and the amount of daily net
revenues calculated for regulatory VaR compared to theamounts calculated for risk management VaR.
The firm’s positional losses observed on a single day
exceeded its 99% one-day regulatory VaR on one occasion
during 2021 and on six occasions during 2020 (all of which
occurred during March 2020 and, as permitted by the FRB,
did not have any impact on the firm’s VaR multiplier used
to calculate Market RWAs);‰ Stressed VaR is the potential loss in value of trading assets
and liabilities, as well as certain investments, loans, andother financial assets and liabilities accounted for at fairvalue, during a period of significant market stress;‰ Incremental risk is the potential loss in value of
non-securitized positions due to the default or credit
migration of issuers of financial instruments over a
one-year time horizon;‰ Comprehensive risk is the potential loss in value, due toprice risk and defaults, within the firm’s credit correlation
positions; and‰ Specific risk is the risk of loss on a position that could
result from factors other than broad market movements,
including event risk, default risk and idiosyncratic risk.
The standardized measurement method is used todetermine specific risk RWAs, by applying supervisorydefined risk-weighting factors after applicable netting is
performed.

196 Goldman Sachs 2021 Form 10-K

Operational Risk
Operational RWAs are only required to be included underthe Advanced Capital Rules. The firm utilizes an internalrisk-based model to quantify Operational RWAs.
The table below presents information about RWAs.
$ in millions

As of December 2021
Credit RWAs
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Total Credit RWAs
Market RWAs
Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Total Market RWAs
Total Operational RWAs
Total RWAs
As of December 2020
Credit RWAs
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Total Credit RWAs
Market RWAs
Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Total Market RWAs
Total Operational RWAs
Total RWAs

Standardized

Advanced$175,628
233,639
76,34643,256
71,485600,354$109,532
182,210
14,40745,582
86,768438,499

13,51038,9226,867
2,521
14,68976,509–$676,863

13,51038,9226,867
2,521
14,68976,509132,913$647,921$120,292
176,501
71,427
46,94470,274
485,438$111,691
151,587
16,56849,26883,599412,713

14,913
31,978
7,882
1,758
12,19368,724–$554,162

14,913
31,978
7,882
1,758
12,19368,724
128,313$609,750

In the table above:‰ Securities financing transactions represents resale andrepurchase agreements and securities borrowed andloaned transactions.
‰ Other includes receivables, certain debt securities, cash
and cash equivalents, and other assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents changes in RWAs.
$ in millions

Year Ended December 2021
RWAs
Beginning balance
Credit RWAs
Change in:
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Change in Credit RWAs
Market RWAs
Change in:Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Change in Market RWAs
Change in Operational RWAs
Ending balanceYear Ended December 2020
RWAs
Beginning balance
Credit RWAs
Change in:
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Change in Credit RWAs
Market RWAs
Change in:Regulatory VaRStressed VaR
Incremental risk
Comprehensive risk
Specific risk
Change in Market RWAs
Change in Operational RWAs
Ending balanceStandardized

Advanced$554,162$609,750

55,336
57,138
4,919(3,688)
1,211
114,916(2,159)30,623(2,161)(3,686)
3,169
25,786(1,403)
6,944(1,015)
763
2,496
7,785
–
$676,863(1,403)
6,944(1,015)
763
2,496
7,785
4,600
$647,921$563,575$544,653(614)(3,239)5,560(9,870)(5,386)(13,549)

39,06017,131
2,734(12,624)
5,333
51,634

5,980
1,067
3,574
365
(6,850)4,136–$554,162

5,980
1,067
3,574
567
(6,850)4,338
9,125$609,750

RWAs Rollforward Commentary
Year Ended December 2021. Standardized Credit RWAs
as of December 2021 increased by $114.92 billion
compared with December 2020, primarily reflecting an
increase in commitments, guarantees and loans (principally
due to increased lending activity and revisions to certain
interpretations of the Capital Rules underlying the RWA
calculation based on regulatory feedback) and an increasein derivatives (principally due to increased exposures andthe impact of SA-CCR adoption). Standardized Market
RWAs as of December 2021 increased by $7.79 billion
compared with December 2020, primarily reflecting an
increase in stressed VaR (principally due to increased
exposures to interest rates).

Advanced Credit RWAs as of December 2021 increased by$25.79 billion compared with December 2020, primarilyreflecting an increase in commitments, guarantees andloans (principally due to increased lending activity). This
increase was partially offset by a decrease in equity
investments (principally due to the sale of equity positions).
Advanced Market RWAs as of December 2021 increased
by $7.79 billion compared with December 2020, primarilyreflecting an increase in stressed VaR (principally due toincreased exposures to interest rates). Advanced
Operational RWAs as of December 2021 increased by$4.60 billion compared with December 2020, primarily
associated with litigation and regulatory proceedings.
Year Ended December 2020. Standardized Credit RWAs
as of December 2020 decreased by $13.55 billion comparedwith December 2019, primarily reflecting a decrease inequity investments (principally due to the sale of certain
equity positions) and a decrease in other (principally due todecreased receivables as a result of changes in risk
measurements). These decreases were partially offset by anincrease in securities financing transactions (principally due
to increased funding exposures). Standardized Market
RWAs as of December 2020 increased by $4.14 billion
compared with December 2019, primarily reflecting an
increase in regulatory VaR (principally due to increased
market volatility) and an increase in incremental risk(principally due to increased exposures in equities held formarket-making purposes). These increases were partially
offset by a decrease in specific risk (principally due tochanges in risk measurements on certain exposures).
Advanced Credit RWAs as of December 2020 increased by$51.63 billion compared with December 2019, primarilyreflecting an increase in derivatives (principally due to theimpact of higher levels of volatility and counterparty creditrisk) and an increase in commitments, guarantees and loans(principally due to increased lending activity). These
increases were partially offset by a decrease in equity
investments (principally due to the sale of certain equity
positions). Advanced Market RWAs as of December 2020
increased by $4.34 billion compared with December 2019,
primarily reflecting an increase in regulatory VaR(principally due to increased market volatility) and anincrease in incremental risk (principally due to increased
exposures in equities held for market-making purposes).
These increases were partially offset by a decrease in
specific risk (principally due to changes in risk
measurements on certain exposures). Advanced
Operational RWAs as of December 2020 increased by$9.13 billion compared with December 2019. The vast
majority of this increase was associated with litigation andregulatory proceedings.

Goldman Sachs 2021 Form 10-K 197

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Bank Subsidiaries
GS Bank USA. GS Bank USA is the firm’s primary U.S.
bank subsidiary. GS Bank USA is an FDIC-insured, NewYork State-chartered bank and a member of the Federal
Reserve System, is supervised and regulated by the FRB, theFDIC, the New York State Department of Financial
Services (NYDFS) and the Consumer Financial Protection
Bureau, and is subject to regulatory capital requirementsthat are calculated under the Capital Framework. On
July 1, 2021, GS Bank USA acquired GSBE, a non-U.S.
banking subsidiary of the firm, which is also subject tostandalone regulatory capital requirements noted below.
GS Bank USA is an Advanced approach banking
organization under the Capital Framework.
The Capital Framework includes the minimum risk-based
capital and the capital conservation buffer requirements(consisting of a 2.5% buffer and the countercyclical capital
buffer). The buffer must consist entirely of capital that
qualifies as CET1 capital. In addition, the Capital
Framework includes the leverage ratio requirement.
GS Bank USA is required to calculate the CET1 capital,
Tier 1 capital and Total capital ratios in accordance withboth the Standardized and Advanced Capital Rules. The
lower of each risk-based capital ratio under theStandardized and Advanced Capital Rules is the ratio
against which GS Bank USA’s compliance with its riskbased capital requirements is assessed. In addition, under
the regulatory framework for prompt corrective action
applicable to GS Bank USA, in order to meet thequantitative requirements for a “well-capitalized”
depository institution, GS Bank USA must also meet the“well-capitalized” requirements in the table below. GS
Bank USA’s capital levels and prompt corrective action
classification are also subject to qualitative judgments by
the regulators about components of capital, risk weightingsand other factors. Failure to comply with the capitalrequirements, including a breach of the buffers described
below, would result in restrictions being imposed by theregulators.
The table below presents GS Bank USA’s risk-based capital,
leverage and “well-capitalized” requirements.

Requirements“Well-capitalized”
Requirements

Risk-based capital requirements
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

7.0%
8.5%
10.5%

6.5%
8.0%
10.0%

Leverage requirements
Tier 1 leverage ratio
SLR

4.0%
3.0%

5.0%
6.0%

198 Goldman Sachs 2021 Form 10-K

In the table above:‰ The CET1 capital ratio requirement includes a minimumof 4.5%, the Tier 1 capital ratio requirement includes aminimum of 6.0% and the Total capital ratio requirement
includes a minimum of 8.0%. These requirements also
include the capital conservation buffer requirements
consisting of a 2.5% buffer and the countercyclical capital
buffer, which the FRB has set to zero percent.
‰ The “well-capitalized” requirements are the binding
requirements for leverage ratios.
The table below presents information about GS Bank USA’s
risk-based capital ratios.
$ in millions

As of December 2021
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
As of December 2020
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

Standardized

Advanced$ 42,535$ 42,535$ 6,430$ 48,965$312,601$ 42,535$ 42,535$ 4,646$ 47,181$222,607

13.6%
13.6%
15.7%

19.1%
19.1%
21.2%

$ 34,687$ 34,687$ 6,312$ 40,999$280,877$ 34,687$ 34,687$ 4,963$ 39,650$173,442

12.3%
12.3%
14.6%

20.0%
20.0%
22.9%

In the table above:‰ In accordance with the reporting requirements for businesscombinations of entities under common control, priorperiod amounts are presented as if the acquisition of GSBE
by GS Bank USA had occurred at the beginning of 2020.
‰ The lower of the Standardized or Advanced ratio is the ratio
against which GS Bank USA’s compliance with the capitalrequirements is assessed under the risk-based Capital Rules,
and therefore, the Standardized ratios applied to GS Bank
USA as of both December 2021 and December 2020.
‰ As permitted by the FRB, GS Bank USA elected totemporarily delay the estimated effects of adopting CECL
on regulatory capital until January 2022 and to
subsequently phase in the effects through January 2025.
In addition, GS Bank USA elected to increase regulatory
capital by 25% of the increase in the allowance for credit
losses since January 1, 2020, as permitted by the rules
issued by the FRB. The impact of this increase will also bephased in over the three-year transition period. Reflecting
the full impact of CECL as of both December 2021 andDecember 2020 would not have had a material impact on
GS Bank USA’s Standardized risk-based capital ratios.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ In connection with the regulatory feedback the firm
received in the third quarter of 2021, GS Bank USA
revised certain interpretations of the Capital Rules
underlying the calculation of Standardized RWAs. As of
December 2020, this change would have increased GS
Bank USA’s Standardized RWAs of $281 billion byapproximately $11 billion, which would have reduced GS
Bank USA’s Standardized CET1 capital ratio of 12.3% by
0.4 percentage points, Standardized Tier 1 capital ratio of
12.3% by 0.4 percentage points and Standardized Total
capital ratio of 14.6% by 0.6 percentage points.

The table below presents information about GS Bank USA’s
leverage ratios.

‰ In December 2021, GS Bank USA adopted SA-CCR, which
resulted in an increase to GS Bank USA’s Standardized
CET1 capital ratio by approximately 1.9 percentage points
as of December 2021.

In the table above:‰ The Standardized risk-based capital ratios increased from
December 2020 to December 2021, reflecting an increasein capital due to capital contributions and net earnings,
partially offset by an increase in both Credit and Market
RWAs. The increase in Standardized Credit RWAs
reflected an increase in commitments, guarantees andloans (principally due to increased lending activity andrevisions to certain interpretations of the Capital Rules
underlying the RWA calculation based on regulatory
feedback described above), partially offset by a decreasein derivatives (principally due to the impact of SA-CCR
adoption described above). The increase in Standardized
Market RWAs primarily reflected an increase in stressed
VaR and regulatory VaR (in each case, principally due toincreased exposures to interest rates).
‰ The Advanced risk-based capital ratios decreased from
December 2020 to December 2021, reflecting an increasein both Credit and Market RWAs, partially offset by anincrease in capital due to capital contributions and net
earnings. The increase in Advanced Credit RWAs
reflected an increase in commitments, guarantees andloans (principally due to increased lending activity) andthe increase in Advanced Market RWAs primarilyreflected an increase in stressed VaR and regulatory VaR(in each case, principally due to increased exposures tointerest rates).

For the Three Months
Ended or as of December$ in millions

Tier 1 capital
Average adjusted total assets
Total leverage exposure
Tier 1 leverage ratio
SLR

2021

2020

$ 42,535$409,739$627,799$ 34,687$310,690$381,637

10.4%
6.8%

11.2%
9.1%

‰ In accordance with the reporting requirements forbusiness combinations of entities under common control,
prior period amounts are presented as if the acquisition of
GSBE by GS Bank USA had occurred at the beginning of2020.
‰ Average adjusted total assets represents the average daily
assets for the quarter adjusted for deductions from Tier 1
capital and the impact of CECL transition.
‰ Total leverage exposure, for the three months ended
December 2020, excluded average holdings of U.S.
Treasury securities and average deposits at the Federal
Reserve as permitted by the FRB under a temporary
amendment. The impact of this temporary amendment
was an increase in GS Bank USA’s SLR by approximately
2.4 percentage points for the three months ended
December 2020. The amendment permitting thisexclusion expired on April 1, 2021.
‰ Tier 1 leverage ratio is calculated as Tier 1 capital divided
by average adjusted total assets.
‰ SLR is calculated as Tier 1 capital divided by total
leverage exposure. Adoption of SA-CCR in
December 2021 resulted in an increase to GS Bank USA’s
SLR by approximately 0.2 percentage points for the threemonths ended December 2021.
The deposits of GS Bank USA are insured by the FDIC to
the extent provided by law. The FRB requires that GS Bank
USA maintain cash reserves with the Federal Reserve. As ofboth December 2021 and December 2020, the reserve
requirement ratio was zero percent. The amount depositedby GS Bank USA at the Federal Reserve was $122.01 billion
as of December 2021 and $52.71 billion as ofDecember 2020.
GS Bank USA is a registered swap dealer with the CFTC
and, beginning in the fourth quarter of 2021, also became aregistered security-based swap dealer with the SEC. As of
December 2021, GS Bank USA was subject to and incompliance with applicable capital requirements for swap
dealers and security-based swap dealers.

Goldman Sachs 2021 Form 10-K 199

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
GSIB. GSIB is our U.K. bank subsidiary regulated by the
Prudential Regulation Authority (PRA) and the Financial
Conduct Authority (FCA). GSIB is subject to the U.K.
capital framework, which is largely based on Basel III.
The table below presents GSIB’s risk-based capitalrequirements.
As of December

Risk-based capital requirements
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

2021

2020

8.5%
10.5%
13.2%

8.3%
10.3%
12.9%

As of December

Risk-based capital and risk-weighted assets
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
Risk-based capital ratios
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

2021

2020

$ 3,408$ 3,408$ 826$ 4,234$17,196$ 3,051$ 3,051$ 827$ 3,878$19,263

19.8%
19.8%
24.6%

15.8%
15.8%
20.1%

Risk-based capital requirements
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

2021

2020

8.7%
10.8%
13.5%

7.0%
8.5%
10.5%

The table below presents information about GSBE’s riskbased capital ratios.
As of December

In the table above, the risk-based capital ratios as ofDecember 2021 reflected GSIB’s profits after foreseeable
charges for the year ended December 2021 (which will not
be finalized until verification by GSIB’s external auditors
and approval by GSIB’s Board of Directors for inclusion inrisk-based
capital).
These
profits
contributed
approximately 68 basis points to the CET1 capital ratio.
The eligible retail deposits of GSIB are covered by the U.K.
Financial Services Compensation Scheme to the extent
provided by law. GSIB is subject to minimum reserve
requirements at the Bank of England. The minimum reserve
requirement was $172 million as of December 2021 and$126 million as of December 2020. The amount depositedby GSIB at the Bank of England was $2.20 billion as ofDecember 2021 and $9.82 billion as of December 2020.

200 Goldman Sachs 2021 Form 10-K

The table below presents GSBE’s risk-based capitalrequirements.
As of December

The table below presents information about GSIB’s riskbased capital ratios.

$ in millions

GSBE. GSBE is our German bank subsidiary supervised by
the European Central Bank, BaFin and Deutsche
Bundesbank. GSBE is subject to the capital requirements
prescribed in the amended E.U. Capital Requirements
Directive (CRD) and E.U. Capital Requirements Regulation(CRR), which are largely based on Basel III.

$ in millions

Risk-based capital and risk-weighted assets
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
Risk-based capital ratios
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio

2021

2020

$ 6,527$ 6,527$
23$ 6,550$28,924$ 3,991$ 3,991$24$ 4,015$11,634

22.6%
22.6%
22.6%

34.3%
34.3%
34.5%

In the table above:‰ The risk-based capital ratios as of December 2021
reflected GSBE’s profits after foreseeable charges for theyear ended December 2021 (which will not be finalized
until verification by GSBE’s external auditors andapproval by GSBE’s shareholder (GS Bank USA) for
inclusion in risk-based capital). These profits contributed
approximately 106 basis points to the CET1 capital ratio.
‰ Risk-based capital ratios as of December 2021 reflected
the CRR and the CRD rules which implement changes in
the Basel standards with respect to counterparty credit
risk and large exposure. These rules became effective inJune 2021. Adoption of these rules did not result in amaterial impact to GSBE’s risk-based capital ratios as ofDecember 2021.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents GSBE’s leverage ratio requirement
which became effective in June 2021 and the leverage ratio.
As of December 2021

Leverage ratio requirement
Leverage ratio

3.0%
7.6%

In the table above, the leverage ratio as of December 2021
reflected GSBE’s profits after foreseeable charges for theyear ended December 2021 (which will not be finalized
until verification by GSBE’s external auditors and approval
by GSBE’s shareholder (GS Bank USA) for inclusion in riskbased capital). These profits contributed approximately
58 basis points to the leverage ratio.
The deposits of GSBE are covered by the German statutory
deposit protection program to the extent provided by law.
In addition, GSBE has elected to participate in the German
voluntary deposit protection program which provides
insurance for certain eligible deposits not covered by theGerman statutory deposit program. GSBE is subject tominimum reserve requirements at central banks in certainof the jurisdictions in which it operates. The minimum
reserve requirement was $189 million as of December 2021
and $25 million as of December 2020. The amountdeposited by GSBE at central banks was $20.36 billion asof December 2021 and $3.17 billion as of December 2020,
substantially all of which was deposited with Deutsche
Bundesbank.
GSBE is a registered swap dealer with the CFTC and,beginning in the fourth quarter of 2021, also became aregistered security-based swap dealer with the SEC. As of
December 2021, GSBE was subject to and in compliancewith applicable capital requirements for swap dealers andsecurity-based swap dealers.

Restrictions on Payments
Group Inc. may be limited in its ability to access capital heldat certain subsidiaries as a result of regulatory, tax or otherconstraints. These limitations include provisions ofapplicable law and regulations and other regulatory
restrictions that limit the ability of those subsidiaries todeclare and pay dividends without prior regulatory
approval. For example, the amount of dividends that may
be paid by GS Bank USA are limited to the lesser of theamounts calculated under a recent earnings test and an
undivided profits test. As a result of dividends paid inconnection with the acquisition of GSBE in July 2021, GS
Bank USA cannot currently declare any additional
dividends without prior regulatory approval.
In addition, subsidiaries not subject to separate regulatory
capital requirements may hold capital to satisfy local tax
and legal guidelines, rating agency requirements (forentities with assigned credit ratings) or internal policies,
including policies concerning the minimum amount of
capital a subsidiary should hold based on its underlying
level of risk.
Group Inc.’s equity investment in subsidiaries was$118.90 billion as of December 2021 and $103.80 billion
as of December 2020, of which Group Inc. was required tomaintain $77.22 billion as of December 2021 and$63.68 billion as of December 2020, of minimum equity
capital in its regulated subsidiaries in order to satisfy theregulatory requirements of such subsidiaries.
Group Inc.’s capital invested in certain non-U.S. dollar
functional currency subsidiaries is exposed to foreignexchange risk, substantially all of which is managed
through a combination of derivatives and non-U.S.
dollar-denominated debt. See Note 7 for information about
the firm’s net investment hedges used to hedge this risk.

Goldman Sachs 2021 Form 10-K 201

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 21.

Note 22.

Earnings Per Common Share

Transactions with Affiliated Funds

Basic EPS is calculated by dividing net earnings to common
by the weighted average number of common shares
outstanding and restricted stock units (RSUs) for which thedelivery of the underlying common stock is not subject tosatisfaction of future service, performance or market
conditions (collectively, basic shares). Diluted EPS includes
the determinants of basic EPS and, in addition, reflects thedilutive effect of the common stock deliverable for RSUs forwhich the delivery of the underlying common stock issubject to satisfaction of future service, performance ormarket conditions.

The firm has formed nonconsolidated investment fundswith third-party investors. As the firm generally acts as theinvestment manager for these funds, it is entitled to receive
management fees and, in certain cases, advisory fees or
incentive fees from these funds. Additionally, the firm
invests alongside the third-party investors in certain funds.
The tables below present information about affiliatedfunds.
Year Ended December$ in millions

The table below presents information about basic anddiluted EPS.

Fees earned from funds

2021

2020

2019

$3,707$3,393$2,967

As of December
Year Ended Decemberin millions, except per share amounts$ in millions

2021

2020

2019

Net earnings to common
Weighted average basic shares
Effect of dilutive RSUs
Weighted average diluted shares$21,151
350.5
5.3
355.8

$8,915
356.4
3.9
360.3

$7,897
371.6
3.9
375.5

Basic EPS
Diluted EPS$ 60.25$ 59.45$24.94$24.74$21.18$21.03In the table above:‰ Net earnings to common represents net earnings
applicable to common shareholders, which is calculated
as net earnings less preferred stock dividends.
‰ Unvested share-based awards that have non-forfeitablerights to dividends or dividend equivalents are treated as aseparate class of securities under the two-class method.
Distributed earnings allocated to these securities reduce
net earnings to common to calculate EPS under thismethod. The impact of applying this methodology was a
reduction in basic EPS of $0.10 for 2021, and $0.07 forboth 2020 and 2019.
‰ Diluted EPS does not include antidilutive RSUs, including
those that are subject to market conditions, of 0.3 million
for 2021, and 0.1 million for both 2020 and 2019.

202 Goldman Sachs 2021 Form 10-K

Fees receivable from funds
Aggregate carrying value of interests in funds

2021

2020

$ 873
$4,321$ 803$5,068The firm has waived, and may waive in the future, certain
management fees on selected money market funds toenhance the yield for investors in such funds. Management
fees waived were $595 million (of which $565 million
related to voluntary waivers on money market funds) for
2021, $109 million for 2020 and $44 million for 2019.
The Volcker Rule restricts the firm from providing financial
support to covered funds (as defined in the rule) after the
expiration of the conformance period. As a general matter,in the ordinary course of business, the firm does not expect
to provide additional voluntary financial support to any
covered funds, but may choose to do so with respect tofunds that are not subject to the Volcker Rule. However,any such support is not expected to be material to theresults of operations of the firm.
In March 2020, GS Bank USA and unaffiliated entities
purchased certificates of deposit and commercial paper
from two money market funds managed by the firm. These
funds are not covered funds under the Volcker Rule. GS
Bank USA’s purchase price of these securities was$1.84 billion, of which none were outstanding as ofDecember 2021 and $321 million were outstanding as ofDecember 2020. These purchases were made to promoteliquidity in the short-term credit markets and to increase thefunds’ weekly liquid assets. Group Inc. provided aguarantee to GS Bank USA in connection with thesesecurities. See Note 18 for information about guarantees
provided by Group Inc. to subsidiaries.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The firm had an outstanding guarantee, as permitted under
the Volcker Rule, on behalf of its funds, of $87 million as ofDecember 2020. The firm had voluntarily provided thisguarantee in connection with a financing agreement with athird-party lender executed by one of the firm’s real estate
funds that is not covered by the Volcker Rule. The firm hadno outstanding guarantee as of December 2021 and except
as noted above, the firm has not provided any additional
financial support to its affiliated funds during 2021 and2020.
In addition, in the ordinary course of business, the firm may
also engage in other activities with its affiliated funds,
including, among others, securities lending, trade
execution, market-making, custody, and acquisition andbridge financing. See Note 18 for information about thefirm’s investment commitments related to these funds.
Note 23.

‰ Short- and long-term borrowings include both secured
and unsecured borrowings.
‰ Other interest expense includes rebates received on otherinterest-bearing liabilities and interest expense on
customer credit balances.
Note 24.

Income Taxes
Provision for Income Taxes
Income taxes are provided for using the asset and liability
method under which deferred tax assets and liabilities arerecognized for temporary differences between the financial
reporting and tax bases of assets and liabilities. The firm
reports interest expense related to income tax matters inprovision for taxes and income tax penalties in otherexpenses.
The table below presents information about the provision
for taxes.

Interest Income and Interest Expense
Interest is recorded over the life of the instrument on an
accrual basis based on contractual interest rates.
The table below presents sources of interest income andinterest expense.
Year Ended December$ in millions

Deposits with banks
Collateralized agreements
Trading assets
Investments
Loans
Other interest
Total interest income
Deposits
Collateralized financings
Trading liabilities
Short-term borrowings
Long-term borrowings
Other interest
Total interest expense
Net interest income

2021

$

(24)
(980)
4,716
1,589
5,319
1,500
12,120
1,303
–
1,662
527
3,231
(1,073)
5,650$ 6,470

2020

2019

245
282
5,210
1,627
4,883
1,442
13,689
2,386
599
1,238
542
4,153
20
8,938
$ 4,751$ 1,211
4,397
5,899
1,457
5,411
3,363
21,738
3,568
2,658
1,213
668
5,359
3,910
17,376$ 4,362$

In the table above:‰ Collateralized agreements includes rebates paid andinterest income on securities borrowed.
‰ Loans excludes interest on loans held for sale that are
accounted for at the lower of cost or fair value. Suchinterest is included within other interest.
‰ Other interest income includes interest income on
customer debit balances, other interest-earning assets andloans held for sale that are accounted for at the lower ofcost or fair value.
‰ Collateralized financings consists
agreements and securities loaned.

ofYear Ended December$ in millions

Current taxes
U.S. federal
State and local
Non-U.S.
Total current tax expense
Deferred taxes
U.S. federal
State and local
Non-U.S.
Total deferred tax benefit
Provision for taxes

2021

2020

2019

$2,904
574
1,926
5,404

$1,759
555
1,539
3,853

$1,113
388
950
2,451

192
72
(259)
5
$5,409

(798)
(42)
7
(833)
$3,020

(383)
(20)
69
(334)
$2,117

The table below presents a reconciliation of the U.S. federal
statutory income tax rate to the effective income tax rate.
Year Ended December
2021

2020

2019

U.S. federal statutory income tax rate
21.0% 21.0%
State and local taxes, net of U.S. federal benefit
1.9
3.1
Settlement of employee share-based awards
(0.7)
(1.0)
Non-U.S. operations
(1.5)
(2.4)
Tax credits
(0.6)
(1.2)
Tax-exempt income, including dividends
(0.5)
(0.6)
Non-deductible legal expenses
–
5.6
Other
0.4
(0.3)
Effective income tax rate
20.0% 24.2%

21.0%
2.9
(0.6)
(3.6)
(1.8)
(1.0)
2.1
1.0
20.0%

In the table above, Non-U.S. operations include the impactof the Base Erosion and Anti-Abuse Tax and Global
Intangible Low Taxed Income (GILTI).

repurchase
Goldman Sachs 2021 Form 10-K 203

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of
temporary differences between the financial reporting andtax bases of assets and liabilities. These temporary
differences result in taxable or deductible amounts in futureyears and are measured using the tax rates and laws thatwill be in effect when such differences are expected toreverse. Valuation allowances are established to reducedeferred tax assets to the amount that more likely than notwill be realized and primarily relate to the ability to utilize
losses in various tax jurisdictions. Tax assets are included inother assets and tax liabilities are included in otherliabilities.
The table below presents information about deferred tax
assets and liabilities, excluding the impact of netting within
tax jurisdictions.
As of December$ in millions

2021

2020

Deferred tax assets
Compensation and benefits$1,978ASC 740 asset related to unrecognized tax benefits
287
Non-U.S. operations
606
Net operating losses
681
Occupancy-related
151
Other comprehensive income/(loss)-related593
Tax credits carryforward
43
Operating lease liabilities
624
Allowance for credit losses
1,081
Other, net
271
Subtotal
6,315
Valuation allowance(895)
Total deferred tax assets$5,420$1,609
200
737
510
138
282
34
618
1,054
333
5,515
(551)
$4,964

Deferred tax liabilities
Depreciation and amortization
Unrealized gains
Operating lease right-of-use assets
Total deferred tax liabilities$1,153
1,120
581$2,854$1,225
1,114
585$2,924

The firm has recorded deferred tax assets of $681 million asof December 2021 and $510 million as of December 2020,in connection with U.S. federal, state and local and foreign
net operating loss carryforwards. The firm also recorded avaluation allowance of $285 million as of December 2021
and $79 million as of December 2020, related to these net
operating loss carryforwards.
As of December 2021, the U.S. federal net operating loss
carryforward was $1.16 billion, the state and local net
operating loss carryforward was $1.80 billion, and theforeign net operating loss carryforward was $1.31 billion.
If not utilized, the U.S. federal, the state and local, andforeign net operating loss carryforwards will begin to
expire in 2022. If these carryforwards expire, they will nothave a material impact on the firm’s results of operations.
As of December 2021, the firm has recorded deferred tax
assets of $32 million in connection with general businesscredit carryforwards and $11 million in connection withstate and local tax credit carryforwards. If not utilized, thegeneral business credit carryforward will begin to expire in
2022 and the state and local tax credit carryforward will
begin to expire in 2023. As of December 2021, the firm did
not have any foreign tax credit carryforwards.
As of both December 2021 and December 2020, the firm
had no U.S. capital loss carryforwards and no related net
deferred income tax assets. As of December 2021, the firm
had deferred tax assets of $270 million in connection withforeign capital loss carryforwards and a valuation
allowance of $270 million related to these capital loss
carryforwards.
The valuation allowance increased by $344 million during2021 and increased by $84 million during 2020. The
increases in both 2021 and 2020 were primarily due to anincrease in deferred tax assets from which the firm does notexpect to realize any benefit.
The firm permanently reinvested eligible earnings of certain
foreign subsidiaries. As of both December 2021 andDecember 2020, all U.S. taxes were accrued on thesesubsidiaries’ distributable earnings.

204 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Unrecognized Tax Benefits
The firm recognizes tax positions in the consolidated
financial statements only when it is more likely than notthat the position will be sustained on examination by therelevant taxing authority based on the technical merits ofthe position. A position that meets this standard ismeasured at the largest amount of benefit that will more
likely than not be realized on settlement. A liability isestablished for differences between positions taken in a tax
return and amounts recognized in the consolidated
financial statements.

Regulatory Tax Examinations
The firm is subject to examination by the U.S. Internal
Revenue Service (IRS) and other taxing authorities injurisdictions where the firm has significant business
operations, such as the United Kingdom, Japan, Hong
Kong and various states, such as New York. The tax years
under examination vary by jurisdiction. The firm does notexpect completion of these audits to have a material impact
on the firm’s financial condition, but it may be material tooperating results for a particular period, depending, in part,on the operating results for that period.

The accrued liability for interest expense related to income
tax matters and income tax penalties was $131 million as ofDecember 2021 and $129 million as of December 2020.
The firm recognized interest expense and income tax
penalties of $13 million for 2021, $41 million for 2020 and$60 million for 2019. It is reasonably possible that
unrecognized tax benefits could change significantly during
the twelve months subsequent to December 2021 due topotential audit settlements. However, at this time it is notpossible to estimate any potential change.

The table below presents the earliest tax years that remainsubject to examination by major jurisdiction.

The table below presents the changes in the liability forunrecognized tax benefits, which is included in otherliabilities.
Year Ended or as of December$ in millions

2021

2020

2019

Beginning balance$1,251
Increases based on current year tax positions
297
Increases based on prior years’ tax positions
95
Decreases based on prior years’ tax positions(111)
Decreases related to settlements(80)
Exchange rate fluctuations(6)
Ending balance$1,446$1,445
164
209
(205)
(367)
5
$1,251$1,051
131
441
(54)
(125)
1
$1,445

Related deferred income tax asset
Net unrecognized tax benefit

200$1,051279$1,166287$1,159

Jurisdiction

U.S. Federal
New York State and City
United Kingdom
Japan
Hong Kong

As of
December 2021

2011
2015
2017
2016
2015

The firm has been accepted into the Compliance Assurance
Process program by the IRS for each of the tax years from2013 through 2022. This program allows the firm to workwith the IRS to identify and resolve potential U.S. Federal
tax issues before the filing of tax returns. The fieldwork for
tax years 2011 through 2018 has been completed and thefinal resolution is not expected to have a material impact on
the effective tax rate. The 2019 and 2020 tax years remainsubject to post-filing review. New York State and City
examinations of 2015 through 2018 commenced during
2021.
All years, including and subsequent to the years in the table
above, remain open to examination by the taxing
authorities. The firm believes that the liability forunrecognized tax benefits it has established is adequate inrelation to the potential for additional assessments.

Goldman Sachs 2021 Form 10-K 205

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 25.

Business Segments
The firm reports its activities in four business segments:
Investment Banking, Global Markets, Asset Management
and Consumer & Wealth Management. See Note 1 for
information about the firm’s business segments.
Compensation and benefits expenses in the firm’s segments
reflect, among other factors, the overall performance of thefirm, as well as the performance of individual businesses.
Consequently, pre-tax margins in one segment of the firm’s
business may be significantly affected by the performanceof the firm’s other business segments.
The firm allocates assets (including allocations of global
core liquid assets and cash, secured client financing andother assets), revenues and expenses among the fourbusiness segments. Due to the integrated nature of thesesegments, estimates and judgments are made in allocating
certain assets, revenues and expenses. The allocation
process is based on the manner in which management
currently views the performance of the segments.
The allocation of common shareholders’ equity andpreferred stock dividends to each segment is based on theestimated amount of equity required to support theactivities of the segment under relevant regulatory capitalrequirements.
Net earnings for each segment is calculated by applying thefirmwide tax rate to each segment’s pre-tax earnings.
Management believes that this allocation provides areasonable representation of each segment’s contribution to
consolidated net earnings to common, return on averagecommon equity and total assets. Transactions between
segments are based on specific criteria or approximate
third-party rates.

206 Goldman Sachs 2021 Form 10-K

Segment Results
The table below presents a summary of the firm’s segment
results.
Year Ended December$ in millions

2021

2020

2019

Investment Banking
Non-interest revenues
Net interest income
Total net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings
Net earnings to common
Average common equity
Return on average common equity$14,425451
14,876(298)
6,705$ 8,469$ 6,775$ 6,705$10,34164.8%$ 9,158
265
9,423
1,624
6,134
$ 1,665$ 1,262$ 1,193$11,313
10.5%$ 7,079
520
7,599
333
4,685
$ 2,581$ 2,065$ 1,996$11,167
17.9%

Global Markets
Non-interest revenues
Net interest income
Total net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings
Net earnings to common
Average common equity
Return on average common equity$19,309
2,768
22,07745
12,969$ 9,063$ 7,250$ 6,973$45,497
15.3%$18,928
2,229
21,157274
12,806$ 8,077$ 6,122$ 5,766$40,760
14.1%$13,109
1,670
14,77935
10,851$ 3,893$ 3,114$ 2,729$40,060
6.8%

Asset Management
Non-interest revenues
Net interest income
Total net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings
Net earnings to common
Average common equity
Return on average common equity$14,366
550
14,91618
5,970$ 8,928$ 7,143$ 7,046$25,195
28.0%$ 7,743
241
7,984
442
5,142
$ 2,400$ 1,819$ 1,740$20,491
8.5%$ 8,454
511
8,965
274
4,817
$ 3,874$ 3,099$ 3,013$21,575
14.0%

Consumer & Wealth Management
Non-interest revenues$ 4,769
Net interest income
2,701
Total net revenues
7,470
Provision for credit losses
592
Operating expenses
6,294
Pre-tax earnings$ 584
Net earnings$ 467
Net earnings to common$ 427
Average common equity$10,796Return on average common equity
4.0%$ 3,980
2,016
5,996
758
4,901
$ 337
$ 256
$ 216
$ 8,012
2.7%$ 3,542
1,661
5,203
423
4,545
$ 235
$ 188
$ 159
$ 6,292
2.5%

Total
Non-interest revenues
Net interest income
Total net revenues
Provision for credit losses
Operating expenses
Pre-tax earnings
Net earnings
Net earnings to common
Average common equity
Return on average common equity$39,809
4,751
44,560
3,098
28,983$12,479$ 9,459$ 8,915$80,57611.1%$32,184
4,362
36,546
1,065
24,898$10,583$ 8,466$ 7,897$79,094
10.0%$52,869
6,470
59,339357
31,938$27,044$21,635$21,151$91,82923.0%

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
In the table above:‰ Revenues and expenses directly associated with eachsegment are included in determining pre-tax earnings.
‰ Net revenues in the firm’s segments include allocations ofinterest income and expense to specific positions inrelation to the cash generated by, or funding requirementsof, such positions. Net interest is included in segment net
revenues as it is consistent with how management assesses
segment performance.
‰ Total operating expenses included net provisions forlitigation and regulatory proceedings of $534 million for
2021, $3.42 billion for 2020 and $1.24 billion for 2019,
primarily reflected in Investment Banking and Global
Markets.
‰ Overhead expenses not directly allocable to specificsegments are allocated ratably based on direct segment
expenses.
‰ Effective January 1, 2021, the allocation of attributed
equity among the firm’s segments was updated to reflect
the results of the firm’s 2020 Comprehensive Capital
Analysis and Review process. The average common
equity balances above incorporate such impact, as well as
the changes in the size and composition of assets held ineach of the firm’s segments that occurred during 2021.
See Note 20 for information about the firm’s updated
SCB, which became effective on October 1, 2021.
The table below presents depreciation and amortization
expense by segment.
Year Ended December$ in millions

Investment Banking
Global Markets
Asset Management
Consumer & Wealth Management
Total

2021

2020

2019

$ 195
772
675
373
$2,015

$ 174
611
740
377
$1,902

$ 139
646
618
301
$1,704

Segment Assets
The table below presents assets by segment.
As of December$ in millions

Investment Banking
Global Markets
Asset Management
Consumer & Wealth Management
Total

2021

2020

$ 144,157
1,082,378
91,115
146,338$1,463,988$ 116,242
844,606
95,751
106,429$1,163,028

The table below presents gross loans by segment and loantype, and allowance for loan losses by segment.
As of December$ in millions

2021

Investment Banking
Corporate
Loans, grossAllowance for loan losses
Loans

$

30,42130,421(866)
29,555

2020$

27,86627,866(1,322)
26,544Global Markets
Corporate
Real estate
Other
Loans, grossAllowance for loan losses
Loans

18,57834,986
7,838
61,402(486)
60,916

13,24816,915
3,499
33,662(448)
33,214

Asset Management
Corporate
Real estate
Other
Loans, grossAllowance for loan losses
Loans

6,928
6,810
692
14,430(732)
13,698

7,545
9,125
675
17,345(787)
16,558Consumer & Wealth Management
Wealth management
Installment
Credit cards
Loans, grossAllowance for loan losses
Loans

43,9983,672
8,212
55,882(1,489)54,39333,023
3,823
4,270
41,116(1,317)39,799162,135(3,573)$ 158,562

119,989(3,874)$ 116,115

Total
Loans, grossAllowance for loan losses
Loans

See Note 9 for further information about loans.

Goldman Sachs 2021 Form 10-K 207

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Geographic Information
Due to the highly integrated nature of international
financial markets, the firm manages its businesses based on
the profitability of the enterprise as a whole. The
methodology for allocating profitability to geographic
regions is dependent on estimates and management
judgment because a significant portion of the firm’s
activities require cross-border coordination in order tofacilitate the needs of the firm’s clients. Geographic results
are generally allocated as follows:‰ Investment Banking: location of the client and investmentbanking team.
‰ Global Markets: FICC and Equities intermediation:
location of the market-making desk; FICC and Equities
financing (excluding prime brokerage financing): locationof the desk; prime brokerage financing: location of the
primary market for the underlying security.
‰ Asset Management (excluding Equity investments andLending and debt investments): location of the sales team;
Equity investments: location of the investment; Lending
and debt investments: location of the client.
‰ Consumer & Wealth Management: Wealth management:
location of the sales team; Consumer banking: location of
the client.
The table below presents total net revenues, pre-tax
earnings and net earnings by geographic region.

Note 26.

Credit Concentrations
The firm’s concentrations of credit risk arise from its
market making, client facilitation, investing, underwriting,lending and collateralized transactions, and cash
management activities, and may be impacted by changes in
economic, industry or political factors. These activities
expose the firm to many different industries andcounterparties, and may also subject the firm to aconcentration of credit risk to a particular central bank,counterparty, borrower or issuer, including sovereignissuers, or to a particular clearing house or exchange. The
firm seeks to mitigate credit risk by actively monitoring
exposures and obtaining collateral from counterparties as
deemed appropriate.
The firm measures and monitors its credit exposure basedon amounts owed to the firm after taking into account risk
mitigants that the firm considers when determining credit
risk. Such risk mitigants include netting and collateralarrangements and economic hedges, such as credit
derivatives, futures and forward contracts. Netting andcollateral agreements permit the firm to offset receivables
and payables with such counterparties and/or enable thefirm to obtain collateral on an upfront or contingent basis.
The table below presents the credit concentrations included
in trading cash instruments and investments.
As of December$ in millions

2021

2020

2019

Year Ended December
Americas
EMEA
Asia
Total net revenues$37,379 63% $27,508 62% $22,148 60%
14,372 24% 10,868 24%
9,745 27%
7,588 13%
6,184 14%4,653 13%$59,339 100% $44,560 100% $36,546 100%

Americas$17,476 65% $ 9,019 72% $ 6,623 62%
EMEA
7,062 26%
3,041 25%
3,349 32%
Asia
2,506
9%
419
3%
611
6%
Total pre-tax earnings $27,044 100% $12,479 100% $10,583 100%
Americas
EMEA
Asia
Total net earnings$13,927 65% $ 7,468 79% $ 5,514 65%
5,695 26%
2,090 22%2,600 31%2,013
9%(99) (1)%352
4%$21,635 100% $ 9,459 100% $ 8,466 100%In the table above:‰ Asia pre-tax earnings and net earnings for 2020 and 2019were impacted by net provisions for litigation andregulatory proceedings.
‰ Substantially all of the amounts in Americas were
attributable to the U.S.
‰ Asia includes Australia and New Zealand.

208 Goldman Sachs 2021 Form 10-K

$ in millions

2021

2020

U.S. government and agency obligations$141,191
Percentage of total assets
9.6%
Non-U.S. government and agency obligations $ 51,426
Percentage of total assets
3.5%$187,009
16.1%$ 59,580
5.1%

In addition, the firm had $222.20 billion as ofDecember 2021 and $116.63 billion as of December 2020of cash deposits held at central banks (included in cash andcash equivalents), of which $122.01 billion as ofDecember 2021 and $52.71 billion as of December 2020
was held at the Federal Reserve.
As of both December 2021 and December 2020, the firm
did not have credit exposure to any other counterparty thatexceeded 2% of total assets.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Collateral obtained by the firm related to derivative assets isprincipally cash and is held by the firm or a third-party
custodian. Collateral obtained by the firm related to resaleagreements and securities borrowed transactions is
primarily U.S. government and agency obligations andnon-U.S. government and agency obligations. See Note 11
for further information about collateralized agreements andfinancings.
The table below presents U.S. government and agency
obligations and non-U.S. government and agency
obligations that collateralize resale agreements andsecurities borrowed transactions.
As of December$ in millions

U.S. government and agency obligations
Non-U.S. government and agency obligations

2021

2020

$ 86,274$141,588$60,158$68,001

In the table above:‰ Non-U.S. government and agency obligations primarily
consists of securities issued by the governments of the
U.K., France and Japan.
‰ Given that the firm’s primary credit exposure on suchtransactions is to the counterparty to the transaction, thefirm would be exposed to the collateral issuer only in theevent of counterparty default.
Note 27.

Legal Proceedings
The firm is involved in a number of judicial, regulatory andarbitration proceedings (including those described below)
concerning matters arising in connection with the conductof the firm’s businesses. Many of these proceedings are in
early stages, and many of these cases seek an indeterminate
amount of damages.
Under ASC 450, an event is “reasonably possible” if “thechance of the future event or events occurring is more thanremote but less than likely” and an event is “remote” if “thechance of the future event or events occurring is slight.”
Thus, references to the upper end of the range of reasonably
possible loss for cases in which the firm is able to estimate a
range of reasonably possible loss mean the upper end of therange of loss for cases for which the firm believes the risk ofloss is more than slight.

With respect to matters described below for which
management has been able to estimate a range ofreasonably possible loss where (i) actual or potential
plaintiffs have claimed an amount of money damages,(ii) the firm is being, or threatened to be, sued by purchasers
in a securities offering and is not being indemnified by aparty that the firm believes will pay the full amount of any
judgment, or (iii) the purchasers are demanding that thefirm repurchase securities, management has estimated theupper end of the range of reasonably possible loss based on(a) in the case of (i), the amount of money damages claimed,(b) in the case of (ii), the difference between the initial sales
price of the securities that the firm sold in such offering andthe estimated lowest subsequent price of such securities
prior to the action being commenced and (c) in the case of(iii), the price that purchasers paid for the securities less theestimated value, if any, as of December 2021 of the relevant
securities, in each of cases (i), (ii) and (iii), taking into
account any other factors believed to be relevant to theparticular matter or matters of that type. As of the datehereof, the firm has estimated the upper end of the range ofreasonably possible aggregate loss for such matters and forany other matters described below where management has
been able to estimate a range of reasonably possible
aggregate loss to be approximately $2.0 billion in excess of
the aggregate reserves for such matters.
Management is generally unable to estimate a range ofreasonably possible loss for matters other than thoseincluded in the estimate above, including where (i) actual or
potential plaintiffs have not claimed an amount of money
damages, except in those instances where management canotherwise determine an appropriate amount, (ii) matters
are in early stages, (iii) matters relate to regulatory
investigations or reviews, except in those instances wheremanagement can otherwise determine an appropriate
amount, (iv) there is uncertainty as to the likelihood of aclass being certified or the ultimate size of the class, (v) there
is uncertainty as to the outcome of pending appeals or
motions, (vi) there are significant factual issues to beresolved, and/or (vii) there are novel legal issues presented.
For example, the firm’s potential liabilities with respect tothe investigations and reviews described below in“Regulatory Investigations and Reviews and Related
Litigation” generally are not included in management’s
estimate of reasonably possible loss. However,management does not believe, based on currently available
information, that the outcomes of such other matters will
have a material adverse effect on the firm’s financial
condition, though the outcomes could be material to thefirm’s operating results for any particular period,
depending, in part, upon the operating results for such
period.

Goldman Sachs 2021 Form 10-K 209

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
1MDB-Related Matters
Between 2012 and 2013, subsidiaries of the firm acted asarrangers or purchasers of approximately $6.5 billion ofdebt securities of 1MDB.
On November 1, 2018, the U.S. Department of Justice(DOJ) unsealed a criminal information and guilty plea by
Tim Leissner, a former participating managing director of
the firm, and an indictment against Ng Chong Hwa, aformer managing director of the firm. On August 28, 2018,
Leissner was adjudicated guilty by the U.S. District Court
for the Eastern District of New York of conspiring tolaunder money and to violate the U.S. Foreign Corrupt
Practices Act’s (FCPA) anti-bribery and internal accounting
controls provisions. Ng was charged with conspiring tolaunder money and to violate the FCPA’s anti-bribery andinternal accounting controls provisions. On May 6, 2019,
Ng pleaded not guilty to the DOJ’s criminal charges, andtrial commenced on February 7, 2022.
On August 18, 2020, the firm announced that it enteredinto a settlement agreement with the Government of
Malaysia to resolve the criminal and regulatory proceedingsin Malaysia involving the firm, which includes a guaranteethat the Government of Malaysia receives at least$1.4 billion in assets and proceeds from assets seized bygovernmental authorities around the world related to
1MDB. See Note 18 for further information about thisguarantee.
On October 22, 2020, the firm announced that it reachedsettlements of governmental and regulatory investigations
relating to 1MDB with the DOJ, the SEC, the FRB, the
NYDFS, the FCA, the PRA, the Singapore Attorney
General’s Chambers, the Singapore Commercial Affairs
Department, the Monetary Authority of Singapore and theHong Kong Securities and Futures Commission. Group Inc.
entered into a three-year deferred prosecution agreementwith the DOJ, in which a charge against the firm, one countof conspiracy to violate the FCPA, was filed and will later
be dismissed if the firm abides by the terms of theagreement. In addition, GS Malaysia pleaded guilty to one
count of conspiracy to violate the FCPA, and was sentenced
on June 9, 2021. In May 2021, the U.S. Department ofLabor granted the firm a five-year exemption to maintainits status as a qualified professional asset manager(QPAM).

210 Goldman Sachs 2021 Form 10-K

The firm has received multiple demands, beginning inNovember 2018, from alleged shareholders under
Section 220 of the Delaware General Corporation Law forbooks and records relating to, among other things, thefirm’s involvement with 1MDB and the firm’s compliance
procedures. On December 13, 2019, an alleged shareholder
filed a lawsuit in the Court of Chancery of the State of
Delaware seeking books and records relating to, among
other things, the firm’s involvement with 1MDB and thefirm’s compliance procedures. The lawsuit was dismissed
without prejudice on August 4, 2021.
On February 19, 2019, a purported shareholder derivative
action relating to 1MDB was filed in the U.S. District Court
for the Southern District of New York against Group Inc.
and the directors at the time and a former chairman andchief executive officer of the firm. The second amended
complaint filed on November 13, 2020, alleges breaches offiduciary duties, including in connection with alleged
insider trading by certain current and former directors,
unjust enrichment and violations of the anti-fraud
provisions of the Exchange Act, including in connection
with Group Inc.’s common stock repurchases andsolicitation of proxies, and seeks unspecified damages,
disgorgement and injunctive relief. Defendants moved todismiss this action on January 15, 2021. On
February 3, 2022, the parties reached a settlement inprinciple, subject to final documentation and court
approval, to resolve this action.
Beginning in March 2019, the firm has also received
demands from three shareholders to investigate and pursue
claims against certain current and former directors andexecutive officers based on their oversight and public
disclosures regarding 1MDB and related internal controls.
In June 2019, the Board appointed a Special Committee toconsider the demands and, in January 2021, the Board
voted to reject them. In June 2021, the firm reached asettlement with the three shareholders. Following theBoard’s decision to reject the initial three demands, the firm
received two additional demands from alleged shareholders(one of which is the alleged shareholder that filed theDecember 2019 books and records action in Delaware
Chancery Court) to investigate and pursue claims related to
1MDB (and, for one of the demands, other matters) against
other parties, including certain current and former directors
and executive officers of the firm. In December 2021, theBoard voted to reject the two additional demands.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
On December 20, 2018, a putative securities class action
lawsuit was filed in the U.S. District Court for the Southern
District of New York against Group Inc. and certain former
officers of the firm alleging violations of the anti-fraud
provisions of the Exchange Act with respect to Group Inc.’s
disclosures and public statements concerning 1MDB andseeking unspecified damages. The plaintiffs filed the second
amended complaint on October 28, 2019. On
June 28, 2021, the court dismissed the claims against one of
the individual defendants but denied the defendants’
motion to dismiss with respect to the firm and theremaining individual defendants. On November 12, 2021,
the plaintiffs moved for class certification.
Mortgage-Related Matters
Beginning in April 2010, a number of purported securities
law class actions were filed in the U.S. District Court for theSouthern District of New York challenging the adequacy ofGroup Inc.’s public disclosure of, among other things, thefirm’s activities in the collateralized debt obligation market,
and the firm’s conflict of interest management.
The consolidated amended complaint filed on July 25, 2011,
which named as defendants Group Inc. and certain current
and former officers and employees of Group Inc. and its
affiliates, generally alleges violations of Sections 10(b) and20(a) of the Exchange Act and seeks monetary damages. The
defendants have moved for summary judgment. On
April 7, 2020, the Second Circuit Court of Appeals affirmed
the district court’s August 14, 2018 grant of classcertification. On June 21, 2021, the United States Supreme
Court vacated the judgment of the Second Circuit andremanded the case for further proceedings, and on
August 26, 2021, the Second Circuit vacated the district
court’s grant of class certification and remanded the case forfurther proceedings. On December 8, 2021, the district court
granted the plaintiffs’ motion for class certification. On
December 22, 2021, defendants filed a petition with theSecond Circuit seeking interlocutory review of the district
court’s grant of class certification.

Currencies-Related Litigation
GS&Co. and Group Inc. are among the defendants namedin an action filed in the U.S. District Court for the Southern
District of New York on November 7, 2018, and GSI,
GSIB, Goldman Sachs Group UK Limited and GS Bank
USA are among the defendants in an action filed in the High
Court of England and Wales on November 11, 2020, ineach case by certain direct purchasers of foreign exchange
instruments that opted out of a class settlement reachedwith, among others, GS&Co. and Group Inc. The thirdamended complaint in the U.S. district court action, filed on
August 3, 2020, generally alleges that the defendants
violated federal antitrust law and state common law inconnection with an alleged conspiracy to manipulate theforeign currency exchange markets and seeks declaratory
and injunctive relief, as well as unspecified amounts ofcompensatory, punitive, treble and other damages. The
claim in the English action is for breaches of English andE.U. competition rules from 2003 to 2013 and alleges
manipulation of foreign exchange rates and bid/offer
spreads, the exchange of commercially sensitive
information among defendants and collusive trading.
GS&Co. is among the defendants named in a putative classaction filed in the U.S. District Court for the Southern
District of New York on August 4, 2021. The amended
complaint, filed on January 6, 2022, generally asserts
claims under federal antitrust law and state common law inconnection with an alleged conspiracy among thedefendants to manipulate auctions for foreign exchangetransactions on an electronic trading platform, as well as
claims under the Racketeer Influenced and Corrupt
Organizations Act. The complaint seeks declaratory andinjunctive relief, as well as unspecified amounts of treble
and other damages.

Complaints were filed in the U.S. District Court for theSouthern District of New York on July 25, 2019 and
May 29, 2020 against Goldman Sachs Mortgage Company
and GS Mortgage Securities Corp. by U.S. Bank National
Association, as trustee for two residential mortgage-backed
securitization trusts that issued $1.7 billion of securities.
The complaints generally allege that mortgage loans in thetrusts failed to conform to applicable representations andwarranties and seek specific performance or, alternatively,
compensatory
damagesandotherrelief.
On
November 23, 2020, the court granted in part and denied inpart defendants’ motion to dismiss the complaint in the firstaction and denied defendants’ motion to dismiss thecomplaint in the second action. On January 14, 2021,
amended complaints were filed in both actions.
Goldman Sachs 2021 Form 10-K 211

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Banco Espirito Santo S.A. and Oak Finance
Beginning in February 2015, GSI commenced actions
against Novo Banco S.A. (Novo Banco) in the English
Commercial Court and the Bank of Portugal (BoP) in
Portuguese Administrative Court in response to BoP’s
decisions in December 2014, September 2015 andDecember 2015 to reverse an earlier transfer to Novo
Banco of an $835 million facility agreement (the Facility),
structured by GSI, between Oak Finance Luxembourg S.A.
(Oak Finance), a special purpose vehicle formed inconnection with the Facility, and Banco Espirito Santo S.A.
(BES) prior to the failure of BES. In July 2018, the English
Supreme Court found that the English courts did not yet
have jurisdiction over GSI’s action. In July 2018, theLiquidation Committee for BES issued a decision seeking toclaw back from GSI $54 million paid to GSI and$50 million paid to Oak Finance in connection with the
Facility, alleging that GSI acted in bad faith in extending the
Facility, including because GSI allegedly knew that BES wasat risk of imminent failure. In October 2018, GSI
commenced an action in Lisbon Commercial Court
challenging the Liquidation Committee’s decision and hassince also issued a claim against the Portuguese Stateseeking compensation for losses of approximately$222 million related to the failure of BES, together with acontingent claim for the $104 million sought by the
Liquidation Committee.
Financial Advisory Services
Group Inc. and certain of its affiliates are from time to time
parties to various civil litigation and arbitration
proceedings and other disputes with clients and third
parties relating to the firm’s financial advisory activities.
These claims generally seek, among other things,
compensatory damages and, in some cases, punitive
damages, and in certain cases allege that the firm did not
appropriately disclose or deal with conflicts of interest.

Archegos-Related Matters
GS&Co. is among the underwriters named as defendants in aputative securities class action filed on August 13, 2021 in
New York Supreme Court, County of New York, relating toViacomCBS Inc.’s (ViacomCBS) March 2021 public offeringsof $1.7 billion of common stock and $1.0 billion of preferredstock. In addition to the underwriters, the defendants include
ViacomCBS and certain of its officers and directors. GS&Co.
underwrote 646,154 shares of common stock representing an
aggregate offering price of approximately $55 million and
323,077 shares of preferred stock representing an aggregateoffering price of approximately $32 million. The complaint
asserts claims under the federal securities laws and alleges thatthe offering documents contained material misstatements andomissions, including, among other things, that the offering
documents failed to disclose that Archegos CapitalManagement (Archegos) had substantial exposure to
ViacomCBS, including through total return swaps to which
certain of the underwriters, including GS&Co., were allegedly
counterparties, and that such underwriters failed to disclose
their exposure to Archegos. The complaint seeks rescission
and compensatory damages in unspecified amounts. On
November 5, 2021, the plaintiffs filed an amended complaint,
and, on December 22, 2021, the defendants filed motions to
dismiss the amended complaint. On January 4, 2022, theplaintiffs moved for class certification.
Group Inc. is also a defendant in putative securities class actions
filed beginning in October 2021 in the U.S. District Court for
the Southern District of New York. The complaints allege thatGroup Inc., along with another financial institution, sold sharesin Vipshop Holdings Ltd. (Vipshop), GSX Techedu Inc.
(Gaotu), Tencent Music Entertainment Group (Tencent),
ViacomCBS, iQIYI Inc. (iQIYI) and Baidu Inc. (Baidu) based onmaterial nonpublic information regarding the liquidation ofArchegos’ position in Vipshop, Gaotu, Tencent, ViacomCBS,
iQIYI and Baidu, respectively. The complaints generally assert
violations of Sections 10(b), 20A and 20(a) of the Exchange Act
and seek unspecified damages.
On January 24, 2022, the firm received a demand from analleged shareholder under Section 220 of the Delaware
General Corporation Law for books and records relating to,among other things, the firm’s involvement with Archegos
and the firm’s controls with respect to insider trading.
Underwriting Litigation
Firm affiliates are among the defendants in a number ofproceedings in connection with securities offerings. In theseproceedings, including those described below, the plaintiffs
assert class action or individual claims under federal andstate securities laws and in some cases other applicablelaws, allege that the offering documents for the securities
that they purchased contained material misstatements andomissions, and generally seek compensatory and rescissory
damages in unspecified amounts, as well as rescission.
Certain of these proceedings involve additional allegations.

212 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Altice USA, Inc. GS&Co. is among the underwriters
named as defendants in putative securities class actions
pending in New York Supreme Court, County of Queens,and the U.S. District Court for the Eastern District of New
York beginning in June 2018, relating to Altice USA, Inc.’s(Altice) $2.15 billion June 2017 initial public offering. In
addition to the underwriters, the defendants include Alticeand certain of its officers and directors. GS&Co.
underwrote 12,280,042 shares of common stock
representing an aggregate offering price of approximately$368 million. On June 26, 2020, the court dismissed theamended complaint in the state court action, and on
September 4, 2020, plaintiffs moved for leave to file a
consolidated amended complaint. Plaintiffs in the district
court action filed a second amended complaint on
October 7, 2020. On November 8, 2021, the state court
preliminarily approved a settlement. The firm will not be
required to contribute to the settlement.
Uber Technologies, Inc. GS&Co. is among theunderwriters named as defendants in several putative
securities class actions filed beginning in September 2019 in
California Superior Court, County of San Francisco and the
U.S. District Court for the Northern District of California,
relating to Uber Technologies, Inc.’s (Uber) $8.1 billion
May 2019 initial public offering. In addition to theunderwriters, the defendants include Uber and certain of its
officers
anddirectors.
GS&Co.
underwrote
35,864,408 shares of common stock representing an
aggregate offering price of approximately $1.6 billion. On
November 16, 2020, the court in the state court action
granted defendants’ motion to dismiss the consolidated
amended complaint filed on February 11, 2020, and on
December
16,
2020,
plaintiffs
appealed.
On
August 7, 2020, defendants’ motion to dismiss the district
court action was denied. On September 25, 2020, theplaintiffs in the district court action moved for classcertification. On December 5, 2020, the plaintiffs in thestate court action filed a complaint in the district court,
which was consolidated with the existing district court
action on January 25, 2021. On May 14, 2021, theplaintiffs filed a second amended complaint in the district
court, purporting to add the plaintiffs from the state court
action as additional class representatives. On
October 1, 2021, defendants’ motion to dismiss the
additional class representatives from the second amended
complaint was denied, and, on October 29, 2021, theplaintiffs in the district court action filed a revised motion
for class certification.

Alnylam Pharmaceuticals, Inc. GS&Co. is among theunderwriters named as defendants in a putative securities
class action filed on September 12, 2019 in New YorkSupreme Court, County of New York, relating to Alnylam
Pharmaceuticals,Inc.’s(Alnylam)$805
millionNovember 2017 public offering of common stock. In
addition to the underwriters, the defendants include
Alnylam and certain of its officers and directors. GS&Co.
underwrote 2,576,000 shares of common stock
representing an aggregate offering price of approximately$322 million. On October 30, 2020, the court denied thedefendants’ motion to dismiss the amended complaint filed
on November 7, 2019. On February 22, 2021, the plaintiffs
moved for class certification. On April 29, 2021, theAppellate Division of the Supreme Court of the State of
New York for the First Department denied defendants’appeal of the New York Supreme Court’s denial of the
defendants’ motion to dismiss the amended complaint,
except with respect to one of the plaintiffs’ claims against
Alnylam’s officers and directors. On December 3, 2021, thecourt preliminarily approved a settlement. The firm will not
be required to contribute to the settlement.
Venator Materials PLC. GS&Co. is among theunderwriters named as defendants in putative securities
class actions in Texas District Court, Dallas County, NewYork Supreme Court, New York County, and the U.S.
District Court for the Southern District of Texas, filed
beginning in February 2019, relating to Venator Materials
PLC’s (Venator) $522 million August 2017 initial public
offering and $534 million December 2017 secondary equity
offering. In addition to the underwriters, the defendants
include Venator, certain of its officers and directors andcertain of its shareholders. GS&Co. underwrote 6,351,347
shares of common stock in the August 2017 initial public
offering representing an aggregate offering price ofapproximately $127 million and 5,625,768 shares ofcommon stock in the December 2017 secondary equity
offering representing an aggregate offering price ofapproximately $127 million. On January 21, 2020, theTexas Court of Appeals reversed the Texas District Courtand dismissed the claims against the underwriterdefendants, including GS&Co., in the Texas state court
action for lack of personal jurisdiction. On
March 22, 2021, the defendants’ motion to dismiss the
New York state court action was granted and the plaintiffs
have filed a notice of appeal. On July 7, 2021, the court in
the federal action granted in part and denied in part
defendants’ motion to dismiss the consolidated complaint.
On August 16, 2021, the plaintiffs in the federal action filedanamendedconsolidated
complaint.
On
November 19, 2021, the plaintiffs in the putative classaction moved for class certification.

Goldman Sachs 2021 Form 10-K 213

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
XP Inc. GS&Co. is among the underwriters named as
defendants in putative securities class actions pending in
New York Supreme Court, County of New York, and the
U.S. District Court for the Eastern District of York, filed
beginning March 19, 2020, relating to XP Inc.’s (XP)$2.3 billion December 2019 initial public offering. In
addition to the underwriters, the defendants include XP,
certain of its officers and directors and certain of its
shareholders. GS&Co. underwrote 19,326,218 shares ofcommon stock in the December 2019 initial public offering
representing an aggregate offering price of approximately$522 million. On August 5, 2020, defendants’ motion tostay the state court action in favor of the federal court
action was denied. On February 8, 2021, the state court
granted the defendants’ motion to dismiss the state court
action, and on March 7, 2021, the district court granted thedefendants’ motion to dismiss the federal court action. On
November 22, 2021, the Second Circuit affirmed the
district court’s order granting the defendants’ motion todismiss.
GoHealth, Inc. GS&Co. is among the underwriters named
as defendants in putative securities class actions filed
beginning on September 21, 2020 and consolidated in the
U.S. District Court for the Northern District of Illinois
relating to GoHealth, Inc.’s (GoHealth) $914 million
July 2020 initial public offering. In addition to theunderwriters, the defendants include GoHealth, certain of
its officers and directors and certain of its shareholders.
GS&Co. underwrote 11,540,550 shares of common stock
representing an aggregate offering price of approximately$242 million. On February 25, 2021, the plaintiffs filed aconsolidated complaint. On April 26, 2021, the defendants
filed a motion to dismiss the consolidated complaint.
Array Technologies, Inc. GS&Co. is among theunderwriters named as defendants in a putative securities
class action filed on May 14, 2021 in the U.S. District Court
for the Southern District of New York, relating to Array
Technologies, Inc.’s (Array) $1.2 billion October 2020
initial public offering of common stock, $1.3 billion
December 2020 offering of common stock and$993 million March 2021 offering of common stock. In
addition to the underwriters, the defendants include Arrayand certain of its officers and directors. GS&Co.
underwrote an aggregate of 31,912,213 shares of common
stock in the three offerings representing an aggregateoffering price of approximately $877 million. On
December 7, 2021, the plaintiffs filed an amended
consolidated complaint.

214 Goldman Sachs 2021 Form 10-K

Skillz Inc. GS&Co. is among the underwriters named as
defendants in a putative securities class action filed on
October 8, 2021 in the U.S. District Court for the Northern
District of California relating to Skillz Inc.’s (Skillz)
approximately $883 million March 2021 public offering ofcommon stock. In addition to the underwriters, thedefendants include Skillz and certain of its officers anddirectors. GS&Co. underwrote 8,832,000 shares ofcommon stock representing an aggregate offering price ofapproximately $212 million. On December 23, 2021, thedefendants filed a motion to dismiss the amended
consolidated complaint.
ContextLogic Inc. GS&Co. is among the underwriters
named as defendants in putative securities class actions filed
beginning on May 17, 2021 in the U.S. District Court for
the Northern District of California, relating toContextLogic Inc.’s (ContextLogic) $1.1 billion
December 2020 initial public offering of common stock. In
addition to the underwriters, the defendants include
ContextLogic and certain of its officers and directors.
GS&Co. underwrote 16,169,000 shares of common stock
representing an aggregate offering price of approximately$388 million.
DiDi Global Inc. Goldman Sachs (Asia) L.L.C. (GS Asia) is
among the underwriters named as defendants in putative
securities class actions filed beginning on July 6, 2021 in the
U.S. District Courts for the Southern District of New Yorkand the Central District of California relating to DiDi
Global Inc.’s (DiDi) $4.4 billion June 2021 initial public
offering of American Depositary Shares (ADS). In addition
to the underwriters, the defendants include DiDi andcertain of its officers and directors. GS Asia underwrote
104,554,000 ADS representing an aggregate offering priceof approximately $1.5 billion. On September 22, 2021,
plaintiffs in the California action voluntarily dismissed theirclaims without prejudice. On January 7, 2022, plaintiffs inthe federal action filed a consolidated amended complaint,
which includes allegations of violations of Sections 10(b)and 20A of the Exchange Act against the underwriterdefendants.
Vroom Inc. GS&Co. is among the underwriters named as
defendants in a putative securities class action filed on
October 4, 2021 in the U.S. District Court for the Southern
District of New York relating to Vroom Inc.’s (Vroom)
approximately $589 million September 2020 public
offering of common stock. In addition to the underwriters,
the defendants include Vroom and certain of its officers anddirectors. GS&Co. underwrote 3,886,819 shares ofcommon stock representing an aggregate offering price ofapproximately $212 million. On December 20, 2021, thedefendants served a motion to dismiss the consolidated
complaint.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Zymergen Inc. GS&Co. is among the underwriters named
as defendants in a putative securities class action filed on
August 4, 2021 in the U.S. District Court for the Northern
District of California relating to Zymergen Inc.’s (Zymergen)$575 million April 2021 initial public offering of common
stock. In addition to the underwriters, the defendants include
Zymergen and certain of its officers and directors. GS&Co.
underwrote 5,750,345 shares of common stock representing
an aggregate offering price of approximately $178 million.
Waterdrop Inc. GS Asia is among the underwriters named
as defendants in a putative securities class action filed on
September 14, 2021 in the U.S. District Court for theSouthern District of New York relating to Waterdrop Inc.’s(Waterdrop) $360 million May 2021 initial public offeringof ADS. In addition to the underwriters, the defendants
include Waterdrop and certain of its officers and directors.
GS Asia underwrote 15,300,000 ADS representing an
aggregate offering price of approximately $184 million.
Investment Management Services
Group Inc. and certain of its affiliates are parties to various
civil litigation and arbitration proceedings and otherdisputes with clients relating to losses allegedly sustained asa result of the firm’s investment management services.
These claims generally seek, among other things, restitution
or other compensatory damages and, in some cases,
punitive damages.
Securities Lending Antitrust Litigation
Group Inc. and GS&Co. are among the defendants named ina putative antitrust class action and three individual actions
relating to securities lending practices filed in the U.S. District
Court for the Southern District of New York beginning inAugust 2017. The complaints generally assert claims underfederal and state antitrust law and state common law inconnection with an alleged conspiracy among the defendants
to preclude the development of electronic platforms forsecurities lending transactions. The individual complaints
also assert claims for tortious interference with business
relations and under state trade practices law and, in thesecond and third individual actions, unjust enrichment understate common law. The complaints seek declaratory andinjunctive relief, as well as unspecified amounts ofcompensatory, treble, punitive and other damages. Group
Inc. was voluntarily dismissed from the putative class action
on January 26, 2018. Defendants’ motion to dismiss the classaction complaint was denied on September 27, 2018.
Defendants’ motion to dismiss the first individual action was
granted on August 7, 2019. The plaintiffs in the putativeclass action moved for class certification on
February 22, 2021. On September 30, 2021, the defendants’
motion to dismiss the second and third individual actions,which were consolidated in June 2019, was granted. On
October 25, 2021, the plaintiff in the second individual
action appealed to the Second Circuit Court of Appeals.

Variable Rate Demand Obligations Antitrust
Litigation
GS&Co. is among the defendants named in a putative classaction relating to variable rate demand obligations(VRDOs), filed beginning in February 2019 under separate
complaints and consolidated in the U.S. District Court for
the Southern District of New York. The consolidated
amended complaint, filed on May 31, 2019, generally
asserts claims under federal antitrust law and state common
law in connection with an alleged conspiracy among thedefendants to manipulate the market for VRDOs. The
complaint seeks declaratory and injunctive relief, as well as
unspecified amounts of compensatory, treble and otherdamages. On November 2, 2020, the court granted in partand denied in part the defendants’ motion to dismiss,dismissing the state common law claims against GS&Co.,
but denying dismissal of the federal antitrust law claims.
GS&Co. is also among the defendants named in a related
putative class action filed on June 2, 2021 in the U.S.
District Court for the Southern District of New York. The
complaint alleges the same conspiracy in the market for
VRDOs as that alleged in the consolidated amended
complaint filed on May 31, 2019, and asserts federal
antitrust law, state law and state common law claims
against the defendants. The complaint seeks declaratory
and injunctive relief, as well as unspecified amounts ofcompensatory, treble and other damages. On
August 6, 2021, plaintiffs in the May 31, 2019 action filed
an amended complaint consolidating the June 2, 2021
action with the May 31, 2019 action. On
September 14, 2021, defendants filed a joint partial motion
to dismiss the August 6, 2021 amended consolidated
complaint.

Goldman Sachs 2021 Form 10-K 215

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Interest Rate Swap Antitrust Litigation
Group Inc., GS&Co., GSI, GS Bank USA and Goldman
Sachs Financial Markets, L.P. are among the defendants
named in a putative antitrust class action relating to the
trading of interest rate swaps, filed in November 2015 andconsolidated in the U.S. District Court for the Southern
District of New York. The same Goldman Sachs entities arealso among the defendants named in two antitrust actions
relating to the trading of interest rate swaps, commenced in
April 2016 and June 2018, respectively, in the U.S. District
Court for the Southern District of New York by threeoperators of swap execution facilities and certain of theiraffiliates. These actions have been consolidated for pretrial
proceedings. The complaints generally assert claims underfederal antitrust law and state common law in connection
with an alleged conspiracy among the defendants topreclude exchange trading of interest rate swaps. The
complaints in the individual actions also assert claims understate antitrust law. The complaints seek declaratory andinjunctive relief, as well as treble damages in an unspecified
amount. Defendants moved to dismiss the class and the firstindividual action and the district court dismissed the statecommon law claims asserted by the plaintiffs in the firstindividual action and otherwise limited the state common
law claim in the putative class action and the antitrust
claims in both actions to the period from 2013 to 2016. On
November 20, 2018, the court granted in part and denied inpart the defendants’ motion to dismiss the second
individual action, dismissing the state common law claims
for unjust enrichment and tortious interference, but
denying dismissal of the federal and state antitrust claims.
On March 13, 2019, the court denied the plaintiffs’ motionin the putative class action to amend their complaint to add
allegations related to conduct from 2008 to 2012, but
granted the motion to add limited allegations from 2013 to2016, which the plaintiffs added in a fourth consolidated
amended complaint filed on March 22, 2019. The plaintiffs
in the putative class action moved for class certification on
March 7, 2019.
Commodities-Related Litigation
GSI is among the defendants named in putative class actions
relating to trading in platinum and palladium, filed beginningon November 25, 2014 and most recently amended on
May 15, 2017, in the U.S. District Court for the Southern
District of New York. The amended complaint generally
alleges that the defendants violated federal antitrust laws andthe Commodity Exchange Act in connection with an alleged
conspiracy to manipulate a benchmark for physical platinum
and palladium prices and seek declaratory and injunctive
relief, as well as treble damages in an unspecified amount. On
March 29, 2020, the court granted the defendants’ motions
to dismiss and for reconsideration, resulting in the dismissalof all claims. On April 27, 2020, plaintiffs appealed to theSecond Circuit Court of Appeals.
216 Goldman Sachs 2021 Form 10-K

GS&Co., GSI, J. Aron & Company and Metro
International Trade Services (Metro), a previously
consolidated subsidiary of Group Inc. that was sold in the
fourth quarter of 2014, are among the defendants in a
number of putative class and individual actions filed
beginning on August 1, 2013 and consolidated in the U.S.
District Court for the Southern District of New York. The
complaints generally allege violations of federal antitrust
laws and state laws in connection with the storage ofaluminum and aluminum trading. The complaints seek
declaratory, injunctive and other equitable relief, as well as
unspecified monetary damages, including treble damages.
In December 2016, the district court granted defendants’
motions to dismiss and on August 27, 2019, the Second
Circuit vacated the district court’s dismissals and remanded
the case to district court for further proceedings. On
July 23, 2020, the district court denied the class plaintiffs’
motion for class certification, and on December 16, 2020
the Second Circuit denied leave to appeal the denial. On
February 17, 2021, the district court granted defendants’
motion for summary judgment with respect to the claims of
most of the individual plaintiffs. On April 14, 2021, theplaintiffs appealed to the Second Circuit Court of Appeals.
In connection with the sale of Metro, the firm agreed toprovide indemnities to the buyer, including for any
potential liabilities for legal or regulatory proceedings
arising out of the conduct of Metro’s business while thefirm owned it.
U.S. Treasury Securities Litigation
GS&Co. is among the primary dealers named as defendants
in several putative class actions relating to the market for U.S.
Treasury securities, filed beginning in July 2015 andconsolidated in the U.S. District Court for the Southern
District of New York. GS&Co. is also among the primary
dealers named as defendants in a similar individual action
filed in the U.S. District Court for the Southern District of
New York on August 25, 2017. The consolidated classaction complaint, filed on December 29, 2017, generally
alleges that the defendants violated antitrust laws inconnection with an alleged conspiracy to manipulate thewhen-issued market and auctions for U.S. Treasury securities
and that certain defendants, including GS&Co., colluded topreclude trading of U.S. Treasury securities on electronic
trading platforms in order to impede competition in thebidding process. The individual action alleges a similar
conspiracy regarding manipulation of the when-issued
market and auctions, as well as related futures and options inviolation of the Commodity Exchange Act. The complaints
seek declaratory and injunctive relief, treble damages in an
unspecified amount and restitution. Defendants’ motion todismiss was granted on March 31, 2021. On May 14, 2021,
plaintiffs filed an amended complaint. On June 14, 2021,
defendants filed a motion to dismiss the amended complaint.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Corporate Bonds Antitrust Litigation
Group Inc. and GS&Co. are among the dealers named as
defendants in a putative class action relating to thesecondary market for odd-lot corporate bonds, filed on
April 21, 2020 in the U.S. District Court for the Southern
District of New York. The amended consolidated
complaint, filed on October 29, 2020, asserts claims underfederal antitrust law in connection with alleged anticompetitive conduct by the defendants in the secondary
market for odd-lots of corporate bonds, and seeks
declaratory and injunctive relief, as well as unspecified
monetary damages, including treble and punitive damages
and restitution. On October 25, 2021, the court granted
defendants’ motion to dismiss with prejudice. On
November 23, 2021, plaintiffs appealed to the Second
Circuit Court of Appeals.
Credit Default Swap Antitrust Litigation
Group Inc., GS&Co. and GSI are among the defendants
named in a putative antitrust class action relating to thesettlement of credit default swaps, filed on June 30, 2021 in
the U.S. District Court for the District of New Mexico. The
complaint generally asserts claims under federal antitrust
law and the Commodity Exchange Act in connection withan alleged conspiracy among the defendants to manipulate
the benchmark price used to value credit default swaps forsettlement. The complaint also asserts a claim for unjust
enrichment under state common law. The complaint seeks
declaratory and injunctive relief, as well as unspecified
amounts of treble and other damages. On
November 15, 2021, the defendants filed a motion todismiss the complaint. On February 4, 2022, the plaintiffs
filed an amended complaint.
Employment-Related Matters
On September 15, 2010, a putative class action was filed in
the U.S. District Court for the Southern District of New
York by three female former employees. The complaint, as
subsequently amended, alleges that Group Inc. and
GS&Co. have systematically discriminated against female
employees in respect of compensation, promotion andperformance evaluations. The complaint alleges a classconsisting of all female employees employed at specified
levels in specified areas by Group Inc. and GS&Co. since
July 2002, and asserts claims under federal and New York
City discrimination laws. The complaint seeks class action
status, injunctive relief and unspecified amounts ofcompensatory, punitive and other damages.

On March 30, 2018, the district court certified a damages
class as to the plaintiffs’ disparate impact and treatment
claims. On September 4, 2018, the Second Circuit Court ofAppeals denied defendants’ petition for interlocutory
review of the district court’s class certification decision andsubsequently denied defendants’ petition for rehearing. On
September 27, 2018, plaintiffs advised the district courtthat they would not seek to certify a class for injunctive anddeclaratory relief. On March 26, 2020, the Magistrate
Judge in the district court granted in part a motion tocompel arbitration as to class members who are parties tocertain agreements with Group Inc. and/or GS&Co. in
which they agreed to arbitrate employment-related
disputes. On April 16, 2020, plaintiffs submitted objections
to the Magistrate Judge’s order and defendants submitted
conditional objections in the event that the district judge
overturned any portion of the Magistrate Judge’s order. On
July 22, 2021, defendants filed a motion to decertify theclass. On August 9, 2021, plaintiffs filed a motion forpartial summary judgment as to a portion of a disparate
impact claim, and defendants filed a motion for summary
judgment as to plaintiff’s disparate impact and treatment
claims. On September 15, 2021, the district court affirmed
the decision of the Magistrate Judge to compel arbitration.
Communications Recordkeeping Investigation andReview
The firm is cooperating with the SEC and producing
documents in connection with an investigation of the firm’s
compliance with records preservation requirements relating
to business communications sent over electronic messaging
channels that have not been approved by the firm. The SEC
has stated that it is conducting similar investigations ofrecord preservation practices at other financial institutions.
Regulatory Investigations and Reviews and Related
Litigation
Group Inc. and certain of its affiliates are subject to a numberof other investigations and reviews by, and in some cases
have received subpoenas and requests for documents andinformation from, various governmental and regulatory
bodies and self-regulatory organizations and litigation andshareholder requests relating to various matters relating to
the firm’s businesses and operations, including:‰ The securities
practices;offering

process

andunderwriting‰ The firm’s investment management and financial
advisory services;‰ Conflicts of interest;‰ Research practices, including research independence andinteractions between research analysts and other firm
personnel, including investment banking personnel, as
well as third parties;
Goldman Sachs 2021 Form 10-K 217

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements‰ Transactions involving government-related financingsand other matters, municipal securities, including wallcross procedures and conflict of interest disclosure withrespect to state and municipal clients, the trading andstructuring of municipal derivative instruments inconnection with municipal offerings, politicalcontribution rules, municipal advisory services and thepossible impact of credit default swap transactions onmunicipal issuers;‰ Consumer lending, as well as residential mortgage
lending, servicing and securitization, and compliancewith related consumer laws;‰ The offering, auction, sales, trading and clearance ofcorporate and government securities, currencies,
commodities and other financial products and related
sales and other communications and activities, as well as
the firm’s supervision and controls relating to suchactivities, including compliance with applicable short salerules, algorithmic, high-frequency and quantitative
trading, the firm’s U.S. alternative trading system (darkpool), futures trading, options trading, when-issued
trading, transaction reporting, technology systems andcontrols, communications recordkeeping and recording,securities lending practices, prime brokerage activities,
trading and clearance of credit derivative instruments andinterest rate swaps, commodities activities and metals
storage, private placement practices, allocations of andtrading in securities, and trading activities andcommunications in connection with the establishment ofbenchmark rates, such as currency rates;‰ Compliance with the FCPA;‰ The firm’s hiring and compensation practices;‰ The firm’s system of risk management and controls; and‰ Insider trading, the potential misuse and dissemination ofmaterial nonpublic information regarding corporate andgovernmental developments and the effectiveness of thefirm’s insider trading controls and information barriers.
The firm is cooperating with all such governmental andregulatory investigations and reviews.

218 Goldman Sachs 2021 Form 10-K

Note 28.

Employee Benefit Plans
The firm sponsors various pension plans and certain otherpostretirement benefit plans, primarily healthcare and life
insurance. The firm also provides certain benefits to former
or inactive employees prior to retirement.
Defined Benefit Pension Plans and Postretirement
Plans
Employees of certain non-U.S. subsidiaries participate invarious defined benefit pension plans. These plans generally
provide benefits based on years of credited service and apercentage of eligible compensation. The firm maintains adefined benefit pension plan for certain U.K. employees. As
of April 2008, the U.K. defined benefit plan was closed to
new participants and frozen for existing participants as ofMarch 31, 2016. The non-U.S. plans do not have a material
impact on the firm’s consolidated results of operations.
The firm also maintains a defined benefit pension plan for
substantially all U.S. employees hired prior to
November 1, 2003. As of November 2004, this plan wasclosed to new participants and frozen for existing
participants. In addition, the firm maintains unfunded
postretirement benefit plans that provide medical and life
insurance for eligible retirees and their dependents covered
under these programs. These plans do not have a material
impact on the firm’s consolidated results of operations.
The firm recognizes the funded status of its defined benefit
pension and postretirement plans, measured as thedifference between the fair value of the plan assets and thebenefit obligation, in the consolidated balance sheets. As of
December 2021, other assets included $411 million (related
to overfunded pension plans) and other liabilities included$426 million related to these plans. As of December 2020,
other assets included $343 million (related to overfundedpension plans) and other liabilities included $478 million
related to these plans.
Defined Contribution Plans
The firm contributes to employer-sponsored U.S. andnon-U.S. defined contribution plans. The firm’s
contribution to these plans was $274 million for 2021,$261 million for 2020 and $254 million for 2019.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 29.

Employee Incentive Plans
The cost of employee services received in exchange for ashare-based award is generally measured based on the
grant-date fair value of the award. Share-based awards that
do not require future service (i.e., vested awards, includingawards granted to retirement-eligible employees) are
expensed immediately. Share-based awards that require
future service are amortized over the relevant service
period. Forfeitures are recorded when they occur.
Cash dividend equivalents paid on RSUs are generally
charged to retained earnings. If RSUs that require futureservice are forfeited, the related dividend equivalents
originally charged to retained earnings are reclassified tocompensation expense in the period in which forfeiture
occurs.
The firm generally issues new shares of common stock upondelivery of share-based awards. In certain cases, primarily
related to conflicted employment (as outlined in theapplicable award agreements), the firm may cash settle
share-based compensation awards accounted for as equity
instruments. For these awards, whose terms allow for cash
settlement, additional paid-in capital is adjusted to theextent of the difference between the value of the award at
the time of cash settlement and the grant-date value of theaward.
Stock Incentive Plan
The firm sponsors a stock incentive plan, The Goldman
Sachs Amended and Restated Stock Incentive Plan (2021)(2021 SIP), which provides for grants of RSUs, restricted
stock, dividend equivalent rights, incentive stock options,
nonqualified stock options, stock appreciation rights, andother share-based awards, each of which may be subject toterms and conditions, including performance or market
conditions. On April 29, 2021, shareholders approved the2021 SIP. The 2021 SIP is a successor to several predecessor
stock incentive plans, the first of which was adopted on
April 30, 1999, and each of which was approved by thefirm’s shareholders.

As of December 2021, 69.8 million shares were available tobe delivered pursuant to awards granted under the 2021
SIP. If any shares of common stock underlying awards
granted under the 2021 SIP or awards granted under the
2018, 2015 or 2013 predecessor stock incentive plans are
not delivered because such awards are forfeited, terminatedor canceled, or if shares of common stock underlying suchawards are surrendered or withheld to satisfy any
obligation of the grantee (including taxes), those shares will
become available to be delivered pursuant to awards
granted under the 2021 SIP. Shares available to be delivered
under the 2021 SIP also are subject to adjustment for
certain events or changes in corporate structure as provided
under the 2021 SIP. The 2021 SIP is scheduled to terminate
on the date of the annual meeting of shareholders that
occurs in 2025.
Restricted Stock Units
The firm grants RSUs (including RSUs subject toperformance or market conditions) to employees, which are
generally valued based on the closing price of theunderlying shares on the date of grant after taking into
account a liquidity discount for any applicable post-vestingand delivery transfer restrictions. The value of equity
awards also considers the impact of material non-public
information, if any, that the firm expects to make available
shortly following grant. RSUs generally vest and underlying
shares of common stock deliver (net of required
withholding tax) as outlined in the applicable award
agreements. Award agreements generally provide thatvesting is accelerated in certain circumstances, such as on
retirement, death, disability and, in certain cases, conflictedemployment. Delivery of the underlying shares of common
stock is conditioned on the grantees satisfying certain
vesting and other requirements outlined in the award
agreements. RSUs not subject to performance conditions
generally vest and deliver over a three-year period.
RSUs that are subject to performance or market conditions
generally deliver after the end of a three to five year period.
For awards that are subject to performance or market
conditions, generally the final award is adjusted from zero
up to 150% of the original grant based on satisfaction of
those conditions. Dividend equivalents that accrue on theseawards are paid when the awards settle.

Goldman Sachs 2021 Form 10-K 219

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
The table below presents the 2021 activity related to stock
settled RSUs.

Restricted Stock
Units Outstanding

Weighted Average
Grant-Date Fair Value ofRestricted Stock
Units Outstanding

FutureServiceRequired

No Future
ServiceRequired

FutureServiceRequired

No Future
ServiceRequired

Beginning balance 3,991,348
Granted
3,838,363
Forfeited(567,318)
Delivered–
Vested(3,219,319)
Ending balance
4,043,074

15,223,219
6,033,314(398,076)(8,144,080)
3,219,319
15,933,696$207.23$276.57$231.77$–$225.48$255.08$203.41$256.93$220.26$202.58$225.48$228.14

In the table above:‰ The weighted average grant-date fair value of RSUs
granted was $264.57 during 2021, $220.45 during 2020
and $177.42 during 2019. The fair value of the RSUs
granted included a liquidity discount of 10.2% during2021, 10.1% during 2020 and 10.5% during 2019, toreflect post-vesting and delivery transfer restrictions,generally of up to 4 years.
‰ The aggregate fair value of awards that vested was$2.64 billion during 2021, $2.01 billion during 2020 and$2.00 billion during 2019.
‰ The ending balance included restricted stock subject tofuture service requirements of 47,719 shares as ofDecember 2021 and 72,369 shares as of December 2020.
‰ The ending balance included RSUs subject to futureservice requirements and performance or market
conditions of 322,935 RSUs as of December 2021 and
210,692 RSUs as of December 2020, and the maximum
amount of such RSUs that may be earned was 387,508
RSUs as of December 2021 and 210,692 RSUs as ofDecember 2020.
‰ The ending balance also included RSUs not subject tofuture service requirements but subject to performance
conditions of 590,453 RSUs as of December 2021 and489,602 RSUs as of December 2020, and the maximum
amount of such RSUs that may be earned was 885,680
RSUs as of December 2021 and 734,403 RSUs as ofDecember 2020.

220 Goldman Sachs 2021 Form 10-K

In relation to 2021 year-end, during the first quarter of2022, the firm granted to its employees approximately
12 million RSUs (of which 4.4 million RSUs require futureservice as a condition of delivery for the related shares ofcommon stock) and delivered, net of required withholding
tax, approximately 1 million shares of restricted stock(which do not require future service). Both RSU andrestricted stock awards are subject to additional conditions
as outlined in the award agreements. Generally, shares
underlying these RSUs, net of required withholding tax,
deliver over a three-year period, but are subject to a oneyear post-vesting and delivery transfer restriction. The
restricted stock is subject to a three-year post-vesting anddelivery transfer restriction. These awards are not includedin the table above.
As of December 2021, there was $565 million of total
unrecognized compensation cost related to non-vested
share-based compensation arrangements. This cost is
expected to be recognized over a weighted average periodof 2.02 years. In addition, there is unrecognizedcompensation cost related to share-based compensation
arrangements subject to performance conditions. The
maximum payout related to these awards is $31 million.
This cost is expected to be recognized over a weighted
average period of two years.
The table below presents the share-based compensation andthe related excess tax benefit.
Year Ended December$ in millions

2021

2020

2019

Share-based compensation$2,553
Excess net tax benefit for share-based awards $ 196$1,985$ 120$2,120$ 63

In the table above, excess net tax benefit for share-based
awards includes the net tax benefit on dividend equivalents
paid on RSUs and the delivery of common stock underlying
share-based awards.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Note 30.

Parent Company
Group Inc. — Condensed Statements of Earnings

Group Inc. — Condensed Balance Sheets

Year Ended December$ in millions

2021

2020

Revenues
Dividends from subsidiaries and other affiliates:Bank$16,990 $40
Nonbank
15,562
11,860
Other revenues
529
774
Total non-interest revenues
33,081
12,674
Interest income
3,695
4,020
Interest expense
4,570
5,861
Net interest loss
(875)
(1,841)
Total net revenues
32,206
10,833Operating expenses
Compensation and benefits
750
367
Other expenses
1,005
3,339
Total operating expenses
1,755
3,706
Pre-tax earnings
30,451
7,127
Benefit for taxes
(551)
(696)
Undistributed earnings/(loss) of subsidiaries
and other affiliates(9,367)
1,636
Net earnings
21,635
9,459
Preferred stock dividends
484
544
Net earnings applicable to commonshareholders$21,151 $ 8,915

2019

$ 63
4,199
335
4,597
7,575
8,545
(970)
3,627
331
1,365
1,696
1,931
(538)
5,997
8,466
569
$7,897

Supplemental Disclosures:
In the condensed statements of earnings above, revenues
and expenses included the following with subsidiaries andother affiliates:‰ Dividends from bank subsidiaries included cash dividends
of $16.99 billion for 2021, $38 million for 2020 and$60 million for 2019.
‰ Dividends from nonbank subsidiaries and other affiliates
included cash dividends of $15.14 billion for 2021,$11.32 billion for 2020 and $4.18 billion for 2019.
‰ Other revenues included $(1.01) billion for 2021,$2.62 billion for 2020 and $1.29 billion for 2019.
‰ Interest income included $3.39 billion for 2021,$3.68 billion for 2020 and $7.26 billion for 2019.
‰ Interest expense included $1.24 billion for 2021,$1.73 billion for 2020 and $3.15 billion for 2019.
‰ Other expenses included $113 million for 2021,$100 million for 2020 and $138 million for 2019.
Group Inc.’s other comprehensive income/(loss) was$(634) million for 2021, $50 million for 2020 and$(2.18) billion for 2019.

As of December$ in millions

2021

AssetsCash and cash equivalents:
With third-party banks
With subsidiary bank
Loans to and receivables from subsidiaries:
Bank
Nonbank ($7,638 and $7,242 at fair value)
Investments in subsidiaries and other affiliates:
Bank
Nonbank
Trading assets (at fair value)
Investments ($22,525 and $16,642 at fair value)
Other assets
Total assets

$

2020

47 $
2

1,024
273,41626–

357
239,483

43,021
31,11675,883
72,6894,663
951
26,07820,2046,098
4,811$430,232 $369,637

Liabilities and shareholders’ equity
Secured borrowings with subsidiaries$ 50,805 $ 35,228
Payables to subsidiaries
1,357
503
Trading liabilities (at fair value)
1,116
320
Unsecured short-term borrowings:
With third parties ($1,215 and $1,723 at fair value)
11,127
20,563
With subsidiaries
3,687
7,385
Unsecured long-term borrowings:
With third parties ($17,690 and $11,145 at fair value) 208,796 171,934
With subsidiaries
40,40532,419Other liabilities
3,013
5,353
Total liabilities
320,306 273,705
Commitments, contingencies and guarantees
Shareholders’ equity
Preferred stock
Common stock
Share-based awards
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Stock held in treasury, at cost
Total shareholders’ equity
Total liabilities and shareholders’ equity

10,703
11,203
9
9
4,211
3,468
56,39655,679131,811 112,947(2,068)(1,434)(91,136) (85,940)
109,926
95,932$430,232 $369,637

Supplemental Disclosures:
Goldman Sachs Funding LLC (Funding IHC), a whollyowned, direct subsidiary of Group Inc., has provided
Group Inc. with a committed line of credit that allows
Group Inc. to draw sufficient funds to meet its cash needs inthe ordinary course of business.
Trading assets included derivative contracts withsubsidiaries of $1.38 billion as of December 2021 and$843 million as of December 2020.
Trading liabilities included derivative contracts withsubsidiaries of $1.12 billion as of December 2021 and$320 million as of December 2020.
As of December 2021, unsecured long-term borrowings
with subsidiaries by maturity date are $38.85 billion in
2023, $324 million in 2024, $385 million in 2025,$45 million in 2026 and $798 million in 2027-thereafter.

Goldman Sachs 2021 Form 10-K 221

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Group Inc. — Condensed Statements of Cash Flows
Year Ended December$ in millions

2021

2020

2019

Cash flows from operating activities
Net earnings$ 21,635 $ 9,459 $ 8,466
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Undistributed (earnings)/loss of
subsidiaries and other affiliates
9,367(1,636) (5,997)
Depreciation and amortization
9
6
26
Deferred income taxes
(241)
(160)
(210)
Share-based compensation
335
127
118
Gain on extinguishment of
unsecured borrowings
–
(1)
(20)
Changes in operating assets and liabilities:
Collateralized transactions (excluding
secured borrowings, net)–
332
77
Trading assets(10,273) 3,484
5,145
Trading liabilities
796
(97)
136
Other, net(5,213) (1,492) (1,208)
Net cash provided by operating activities
16,415 10,022
6,533
Cash flows from investing activities
Purchase of property, leasehold
improvements and equipment
(13)
(26)
(34)
Repayments/(issuances) of short-term loans
to subsidiaries, net(9,951) 7,021
2,079
Issuance of term loans to subsidiaries(37,260) (32,472) (7,374)
Repayments of term loans by subsidiaries
10,059 29,568
1,894
Purchase of investments(16,964) (3,767) (16,776)
Sales/paydowns of investments
10,896
4,135
9,768
Capital contributions to subsidiaries, net(23,978) (5,617)(415)
Net cash used for investing activities(67,211) (1,158) (10,858)
Cash flows from financing activities
Secured borrowings with subsidiary, net
12,346(6,360) 26,398
Unsecured short-term borrowings, net:
With third parties(683) (1,372)(22)
With subsidiaries
7,007 12,603
4,649
Issuance of unsecured long-term borrowings
73,164 24,789
8,804
Repayment of unsecured long-term borrowings (31,588) (33,432) (27,172)
Purchase of Trust Preferred securities
–
(11)
(206)
Preferred stock redemption(2,675)(350) (1,100)
Common stock repurchased(5,200) (1,928) (5,335)
Settlement of share-based awards insatisfaction of withholding tax requirements
(985)
(830)
(745)
Dividends and dividend equivalents paid on
stock and share-based awards(2,725) (2,336) (2,104)
Issuance of preferred stock, net of costs
2,172
349
1,098
Other financing, net
(14)
–
(3)
Net cash provided by/(used for) financing
activities
50,819(8,878)4,262
Net increase/(decrease) in cash and cash
equivalents
23
(14)
(63)
Cash and cash equivalents, beginning balance
26
40
103
Cash and cash equivalents, ending balance $
49 $
26 $
40

222 Goldman Sachs 2021 Form 10-K

Supplemental Disclosures:
Cash payments for interest, net of capitalized interest, were$4.72 billion for 2021, $5.92 billion for 2020 and$9.53 billion for 2019, and included $1.33 billion for 2021,$1.90 billion for 2020 and $3.01 billion for 2019 of
payments to subsidiaries.
Cash payments/(refunds) for income taxes, net, were
$3.74 billion for 2021, $1.37 billion for 2020 and$272 million for 2019.
Non-cash activities during the year ended December 2021:‰ Group Inc. exchanged $948 million of loans for
additional equity investment in its wholly-owned
subsidiaries.
Non-cash activities during the year ended December 2020:‰ Group Inc. exchanged $11.2 million of Trust Preferred
securities and common beneficial interests for$12.5 million of certain of Group Inc.’s juniorsubordinated debt.
Non-cash activities during the year ended December 2019:‰ Group Inc. acquired $8.50 billion of deposits with GS
Bank USA from Funding IHC in exchange forborrowings.
‰ Group Inc. exchanged $211 million of Trust Preferred
securities and common beneficial interests for$231 million of certain of Group Inc.’s juniorsubordinated debt.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESSupplemental Financial Information
Common Stock Performance

Statistical Disclosures

The graph and table below compare the performance of aninvestment in the firm’s common stock from
December 31, 2016 (the last trading day before the firm’s
2017 fiscal year) through December 31, 2021, with the
S&P 500 Index (S&P 500) and the S&P 500 Financials
Index (S&P 500 Financials).

Distribution of Assets, Liabilities and Shareholders’EquityThe tables below present information about averagebalances, interest and average interest rates.

$300$ in millions$250

AssetsU.S.
Non-U.S.
Deposits with banks
U.S.
Non-U.S.
Collateralized agreements
U.S.
Non-U.S.
Trading assets
U.S.
Non-U.S.
Investments
U.S.
Non-U.S.
Loans
U.S.
Non-U.S.
Other interest-earning assets
Interest-earning assets
Cash and due from banks
Other non-interest-earning assets
Assets

$200
$150
$100
$50
$0
Dec-16

Dec-17

Dec-18The Goldman Sachs Group, Inc.

Dec-19S&P 500 Index

Dec-20Dec-21

S&P 500 Financials Index

As of December
2016

2017

2018

2019

2020

2021

Group Inc.
$100.00 $107.74 $ 71.63 $100.61 $118.19 $174.44
S&P 500$100.00 $121.82 $116.47 $153.14 $181.30 $233.30
S&P 500 Financials $100.00 $122.14 $106.21 $140.30 $137.83 $185.89

The graph and table above assume $100 was invested on
December 31, 2016 in each of the firm’s common stock, theS&P 500 and the S&P 500 Financials, and the dividends
were reinvested without payment of any commissions. The
performance shown represents past performance andshould not be considered an indication of future
performance.

Average Balance for theYear Ended December
2021

2020

2019

$ 103,182 $ 55,662 $ 41,250
95,73571,312
49,161
198,917
126,974
90,411
202,841
138,447 156,769
148,604
114,974 123,069
351,445
253,421 279,838
173,498
204,118 157,266
136,075
118,642 118,086
309,573
322,760 275,352
69,89356,16738,41918,573
17,156
15,10088,46673,32353,519108,032
94,11584,416
21,455
18,867
13,839129,487
112,982
98,25598,08657,14939,961
55,53045,672
36,768
153,616
102,82176,7291,231,504
992,281 874,104
10,804
10,303
10,998
128,521116,750
86,137$1,370,829 $1,119,334 $971,239

Liabilities
U.S.
Non-U.S.
Interest-bearing deposits
U.S.
Non-U.S.
Collateralized financings
U.S.
Non-U.S.
Trading liabilities
U.S.
Non-U.S.
Short-term borrowings
U.S.
Non-U.S.
Long-term borrowings
U.S.
Non-U.S.
Other interest-bearing liabilities
Interest-bearing liabilities
Non-interest-bearing deposits
Other non-interest-bearing liabilities
Liabilities
Shareholders’ equity
Preferred stock
Common stock
Shareholders’ equity
Liabilities and shareholders’ equity$ 231,967 $ 188,767 $131,937
72,89951,99734,993304,866
240,764 166,930
110,099
77,72765,17072,69135,28431,875
182,790
113,011
97,04567,73442,21329,33375,763
55,11945,816
143,497
97,33275,14931,86634,44934,28434,326
22,113
17,323
66,19256,56251,607
216,864
199,196 205,324
29,76430,941
28,079
246,628
230,137 233,403
139,278
127,489 128,846
85,913
66,403
55,101
225,191
193,892 183,947
1,169,164
931,698 808,081
5,920
6,672
5,503
94,04089,18567,3581,269,124 1,027,555 880,942
9,876
11,203
11,20391,82980,576
79,094
101,705
91,77990,297$1,370,829 $1,119,334 $971,239

Percentage attributable to non-U.S. operations
Interest-earnings assets
38.65%
Interest-bearing liabilities
31.76%

38.96%
28.11%

40.73%
26.38%

Goldman Sachs 2021 Form 10-K 223

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESSupplemental Financial Information
Interest for theYear Ended December$ in millions

AssetsU.S.
Non-U.S.
Deposits with banks
U.S.
Non-U.S.
Collateralized agreements
U.S.
Non-U.S.
Trading assets
U.S.
Non-U.S.
Investments
U.S.
Non-U.S.
Loans
U.S.
Non-U.S.
Other interest-earning assets
Interest-earning assets

2021

$

2020

Average Rate for theYear Ended December
2021

2020

2019

AssetsU.S.
Non-U.S.
Deposits with banks
U.S.
Non-U.S.
Collateralized agreements
U.S.
Non-U.S.
Trading assets
U.S.
Non-U.S.
Investments
U.S.
Non-U.S.
Loans
U.S.
Non-U.S.
Other interest-earning assets
Interest-earning assets

0.14%(0.17)%(0.01)%(0.19)%(0.40)%(0.28)%
1.70%
1.30%
1.52%
1.42%
3.22%
1.80%
4.09%
4.18%
4.11%
1.22%
0.54%
0.98%
0.98%

0.39%
0.04%
0.19%
0.27%
(0.08)%
0.11%
1.79%
1.32%
1.61%
1.92%
3.18%
2.22%
4.31%
4.36%
4.32%
1.92%
0.75%
1.40%
1.38%

2.23%
0.60%
1.34%
2.50%
0.38%
1.57%
2.30%
1.93%
2.14%
2.53%
3.21%
2.72%
5.51%
5.46%
5.51%
5.79%
2.86%
4.38%
2.49%

Liabilities
U.S.
Non-U.S.
Interest-bearing deposits
U.S.
Non-U.S.
Collateralized financings
U.S.
Non-U.S.
Trading liabilities
U.S.
Non-U.S.
Short-term borrowings
U.S.
Non-U.S.
Long-term borrowings
U.S.
Non-U.S.
Other interest-bearing liabilities
Interest-bearing liabilities

0.47%
0.28%
0.43%
0.13%
(0.20)%
0.00%
0.98%
1.32%
1.16%
1.49%
0.15%
0.80%
1.45%
0.31%
1.31%
(0.64)%(0.20)%(0.48)%
0.48%

1.04%
0.81%
0.99%
0.71%
0.13%
0.53%
1.13%
1.38%
1.27%
1.43%
0.23%
0.96%
2.03%
0.38%
1.80%
(0.12)%
0.25%
0.01%
0.96%

2.35%
1.34%
2.14%
3.64%
0.89%
2.74%
1.59%
1.63%
1.61%
1.87%
0.15%
1.29%
2.55%
0.45%
2.30%
3.14%
(0.25)%
2.13%
2.15%

Interest rate spread
U.S.
Non-U.S.
Net yield on interest-earning assets

0.50%
0.62%
0.37%
0.53%

0.42%
0.51%
0.43%
0.48%

0.34%
0.10%
1.07%
0.50%

2019

143
(167)
(24)
(383)
(597)
(980)
2,943
1,773
4,716
991
598
1,589
4,423
896
5,319
1,201
299
1,500
$12,120

$

219
26
245
371
(89)
282
3,649
1,561
5,210
1,081
546
1,627
4,061
822
4,883
1,099
343
1,442
$13,689

$

918
293
1,211
3,925
472
4,397
3,622
2,277
5,899
972
485
1,457
4,655
756
5,411
2,313
1,050
3,363
$21,738

Liabilities
U.S.
Non-U.S.
Interest-bearing deposits
U.S.
Non-U.S.
Collateralized financings
U.S.
Non-U.S.
Trading liabilities
U.S.
Non-U.S.
Short-term borrowings
U.S.
Non-U.S.
Long-term borrowings
U.S.
Non-U.S.
Other interest-bearing liabilities
Interest-bearing liabilities$ 1,098
205
1,303
146
(146)
–
661
1,001
1,662
476
51
527
3,139
92
3,231
(897)
(176)
(1,073)$ 5,650$ 1,967
419
2,386
554
45
599
477
761
1,238
492
50
542
4,034
119
4,153
(148)
168
20
$ 8,938$ 3,099
469
3,568
2,374
284
2,658
466
747
1,213
642
26
668
5,234
125
5,359
4,048
(138)
3,910
$17,376

Net interest income
U.S.
Non-U.S.
Net interest income$ 4,695
1,775$ 6,470$ 3,104
1,647$ 4,751

$

542
3,820
$ 4,362

In the tables above:‰ Assets, liabilities and interest are classified as U.S. andnon-U.S. based on the location of the entity in which theassets and liabilities are held.
‰ Derivative instruments and commodities are included inother non-interest-earning assets and other non-interestbearing liabilities.
‰ Average
collateralized
agreements
included$167.95 billion of resale agreements and $183.50 billionof securities borrowed for 2021, $119.16 billion of resaleagreements and $134.26 billion of securities borrowed
for 2020, and $133.50 billion of resale agreements and$146.34 billion of securities borrowed for 2019.
‰ Other interest-earning assets primarily consists of certain
receivables from customers and counterparties.

224 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESSupplemental Financial Information‰ Collateralized financings included $145.68 billion of repurchaseagreements and $37.11 billion of securities loaned for 2021,$96.60 billion of repurchase agreements and $16.41 billion of
securities loaned for 2020, and $84.00 billion of repurchaseagreements and $13.05 billion of securities loaned for 2019.
‰ Substantially all of the other interest-bearing liabilities consistsof certain payables to customers and counterparties.
‰ Interest rates for borrowings include the effects of interest
rate swaps accounted for as hedges.
‰ Loans exclude loans held for sale that are accounted for at
the lower of cost or fair value. Such loans are included within
other interest-earning assets.
‰ Short- and long-term borrowings include both secured andunsecured borrowings.
Changes in Net Interest Income, Volume and Rate
Analysis
The tables below present the effect on net interest income ofvolume and rate changes. In this analysis, changes due tovolume/rate variance have been allocated to volume.
Year Ended December 2021
versus December 2020
Increase (decrease)
due to change in:$ in millions

Interest-earning assets
U.S.
Non-U.S.
Deposits with banks
U.S.
Non-U.S.
Collateralized agreements
U.S.
Non-U.S.
Trading assets
U.S.
Non-U.S.
Investments
U.S.
Non-U.S.
Loans
U.S.
Non-U.S.
Other interest-earning assets
Change in interest income
Interest-bearing liabilities
U.S.
Non-U.S.
Interest-bearing deposits
U.S.
Non-U.S.
Collateralized financings
U.S.
Non-U.S.
Trading liabilities
U.S.
Non-U.S.
Short-term borrowings
U.S.
Non-U.S.
Long-term borrowings
U.S.
Non-U.S.
Other interest-bearing liabilities
Change in interest expense
Change in net interest income

Volume

Rate

$ 66
(43)
23
(122)
(135)
(257)
(519)
227
(292)
195
46
241
570
108
678
501
53
554
947

$ (142)
(150)
(292)
(632)
(373)
(1,005)
(187)
(15)
(202)
(285)
6
(279)
(208)
(34)
(242)
(399)
(97)
(496)
(2,516)

204
59
263
43
(75)
(32)
249
273
522
(39)
18
(21)
256
(4)
252
(76)
(40)
(116)
868
$ 79

(1,073)(273)(1,346)
(451)
(116)
(567)
(65)
(33)
(98)
23
(17)
6
(1,151)(23)(1,174)
(673)
(304)
(977)
(4,156)$ 1,640

Net
Change

$

(76)
(193)
(269)
(754)
(508)
(1,262)
(706)
212
(494)
(90)
52
(38)
362
74
436
102
(44)
58
(1,569)

(869)
(214)
(1,083)
(408)
(191)
(599)
184
240
424
(16)
1
(15)
(895)
(27)
(922)
(749)
(344)
(1,093)(3,288)$ 1,719

Year Ended December 2020
versus December 2019
Increase (decrease)
due to change in:$ in millions

Interest-earning assets
U.S.
Non-U.S.
Deposits with banks
U.S.
Non-U.S.
Collateralized agreements
U.S.
Non-U.S.
Trading assets
U.S.
Non-U.S.
Investments
U.S.
Non-U.S.
Loans
U.S.
Non-U.S.
Other interest-earning assets
Change in interest income
Interest-bearing liabilities
U.S.
Non-U.S.
Interest-bearing deposits
U.S.
Non-U.S.
Collateralized financings
U.S.
Non-U.S.
Trading liabilities
U.S.
Non-U.S.
Short-term borrowings
U.S.
Non-U.S.
Long-term borrowings
U.S.
Non-U.S.
Other interest-bearing liabilities
Change in interest expense
Change in net interest income

VolumeRate

Net
Change

$

57
8
65
(49)
6
(43)
838
7
845
342
65
407
419
219
638
331
67
398
2,310

$

(756)
(275)
(1,031)(3,505)(567)(4,072)(811)(723)(1,534)
(233)
(4)
(237)
(1,013)(153)(1,166)(1,545)(774)(2,319)(10,359)$ (699)(267)(966)(3,554)(561)(4,115)
27
(716)
(689)
109
61
170
(594)
66
(528)
(1,214)(707)(1,921)(8,049)

592
137
729
90
4
94
146
128
274
2
11
13
(124)
11
(113)
2
29
31
1,028
$1,282(1,724)(187)(1,911)(1,910)(243)(2,153)
(135)
(114)
(249)
(152)
13
(139)
(1,076)(17)(1,093)(4,198)277(3,921)(9,466)$ (893)(1,132)(50)(1,182)(1,820)(239)(2,059)
11
14
25
(150)
24
(126)
(1,200)(6)(1,206)(4,196)306(3,890)(8,438)$ 389

Deposits
The table below presents information about interestbearing deposits.
Year Ended December$ in millions

Average balances
U.S.
Savings and demandTime
Total U.S.
Non-U.S.
DemandTime
Total non-U.S.
Total
Average interest rates
U.S.
Savings and demandTime
Total U.S.
Non-U.S.
DemandTime
Total non-U.S.
Total

2021

2020

$174,745
57,222
231,967$125,264
63,503
188,767

43,70929,19072,899$304,866

34,83817,15951,997$240,764

0.34%
0.89%
0.47%

0.72%
1.68%
1.04%

0.33%
0.21%
0.28%
0.43%

0.79%
0.84%
0.81%
0.99%

Goldman Sachs 2021 Form 10-K 225

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIESSupplemental Financial Information
In the table above, deposits are classified as U.S. andnon-U.S. based on the location of the entity in which suchdeposits are held.
The amount of deposits in U.S. offices held by non-U.S.
depositors was $7.56 billion as of December 2021 and$4.53 billion as of December 2020.
The amount of uninsured deposits in U.S. offices was$127.05 billion as of December 2021 and $83.33 billion asof December 2020. The amount of uninsured deposits in
non-U.S. offices was $49.08 billion as of December 2021
and $26.08 billion as of December 2020.
The table below presents uninsured time deposits bymaturity.

Maturities and Interest Rates. The table below presents
gross loans by tenor.
As of December 2021

$ in millions

More than More than
1 year or 1 year to 5 years to More thanless
5 years 15 years 15 years

Corporate$ 7,618
Wealth management
29,799Commercial real estate
2,552
Residential real estate
4,811
Consumer:
176
Installment
Credit cards
8,212
Other
824
Total
$53,992

Total$40,955
5,495
19,690
10,152$ 7,200
70
3,555
60

$

154 $ 55,927
8,634
43,99886
25,883890
15,913

3,112
–
4,895
$84,299

384
–
2,287
$13,556

–
3,672
–
8,212
524
8,530
$10,288 $162,135

The table below presents the gross loans by tenor and forloans with tenors greater than one year, the distributions ofsuch loans between fixed and floating interest rates.
As of December 2021

As of December 2021
$ in millions

U.S.

3 months or less
3 to 6 months
6 to 12 months
Greater than 12 months
Total

Non-U.S.

$ 7,651
8,961
3,711
1,542
$21,865$12,240
8,683
9,974
1,710
$32,607

In the table above:‰ All U.S. time deposits were in accounts eligible for FDIC
insurance and non-U.S. time deposits include deposits inaccounts eligible for insurance in their local jurisdictions,as well as deposits in uninsured accounts.
‰ The insurance limit is allocated between time and otherdeposits on a pro-rata basis for account holders who haveboth time and other deposits that, in aggregate, exceed
the insurance limit.
Loan Portfolio
The table below presents information about loans.
As of December$ in millions

Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

2021

$ in millions

Corporate
Wealth management
Commercial real estate
Residential real estateConsumer:
Installment
Credit cards
Other
Total

1 yearor lessMore than one year
Fixed-rate Floating-rate

Total$ 7,618
29,799
2,552
4,811

$ 301
–
611
4

$ 48,008 $ 55,927
14,19943,99822,72025,883
11,09815,913

176
8,212
824
$53,992

3,496–
10$4,422

–
3,672
–
8,212
7,696
8,530
$103,721 $162,135

Allowance for Loan Losses
The table below presents information about the allowance
for loan losses.
As of December$ in millions

Corporate
Wealth management
Commercial real estate
Residential real estate
Other
Wholesale
Installment
Credit cards
Consumer
Total

2021

2020

$1,395
51
473
105
111
2,135
490
948
1,438
$3,573$1,948
27
448
68
93
2,584
717
573
1,290
$3,874

The table below presents information about the net
charge-off ratio for loans accounted for at amortized cost.

2020$ 55,927
43,99825,883
15,913

35%
27%
16%
10%

$ 48,659
33,023
20,290
5,750

41%
27%
17%
5%

3,672
8,212
8,530
$162,135

2%
5%
5%
100%

3,823
4,270
4,174
$119,989

3%
4%
3%
100%

Net
charge-offs

Averagebalance

Net chargeoff ratio

Year ended December 2021
Wholesale
Installment
Credit cards
Consumer
Total

$130
68
135
203
$333

$111,088
3,497
5,495
8,992
$120,080

0.1%
1.9%
2.5%
2.3%
0.3%

Year ended December 2020
Wholesale
Installment
Credit cards
Consumer
Total

$615
220
72
292
$907

$ 95,256
4,419
2,572
6,991
$102,247

0.6%
5.0%
2.8%
4.2%
0.9%

$ in millions

In the table above, the net charge-off ratio is calculated by
dividing the net charge-offs by average gross loans
accounted for at amortized cost. Net charge-offs forwholesale loans were primarily related to corporate loans
for both 2021 and 2020.
226 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Item 9. Changes in and Disagreementswith Accountants on Accounting and
Financial Disclosure
There were no changes in or disagreements withaccountants on accounting and financial disclosure during
the last two years.

Item 9A. Controls and Procedures
As of the end of the period covered by this report, anevaluation was carried out by Goldman Sachs management,with the participation of our Chief Executive Officer andChief Financial Officer, of the effectiveness of ourdisclosure controls and procedures (as defined inRule 13a-15(e) under the Exchange Act). Based upon that
evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that these disclosure controls andprocedures were effective as of the end of the period
covered by this report. In addition, no change in ourinternal control over financial reporting (as defined inRule 13a-15(f) under the Exchange Act) occurred during
the fourth quarter of our year ended December 31, 2021
that has materially affected, or is reasonably likely tomaterially affect, our internal control over financial
reporting.

PART III
Item 10. Directors, Executive Officers
and Corporate Governance
Information about our executive officers is included on
page 25 of this Form 10-K. Information about our
directors, including our audit committee and audit
committee financial experts and the procedures by whichshareholders can recommend director nominees, and our
executive officers will be in our definitive Proxy Statementfor our 2022 Annual Meeting of Shareholders, which will
be filed within 120 days of the end of 2021 (2022 Proxy
Statement) and is incorporated in this Form 10-K byreference. Information about our Code of Business Conduct
and Ethics, which applies to our senior financial officers, isincluded in “Business — Available Information” in Part I,
Item 1 of this Form 10-K.

Item 11. Executive Compensation
Information relating to our executive officer and director
compensation and the compensation committee of theBoard will be in the 2022 Proxy Statement and isincorporated in this Form 10-K by reference.

Management’s Report on Internal Control over Financial
Reporting and the Report of Independent Registered Public
Accounting Firm are set forth in Part II, Item 8 of thisForm 10-K.

Item 9B. Other Information
Not applicable.

Item 9C.
Disclosure
RegardingForeign Jurisdictions that Prevent
Inspections
Not applicable.

Goldman Sachs 2021 Form 10-K 227

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

Item 12. Security Ownership of Certain
Beneficial Owners and Management andRelated Stockholder Matters

Item 13. Certain Relationships andRelated Transactions, and Director
Independence

Information relating to security ownership of certain
beneficial owners of our common stock and information
relating to the security ownership of our management will
be in the 2022 Proxy Statement and is incorporated in thisForm 10-K by reference.

Information regarding certain relationships and relatedtransactions and director independence will be in the 2022
Proxy Statement and is incorporated in this Form 10-K byreference.

The table below presents information as ofDecember 31, 2021 regarding securities to be issued
pursuant to outstanding restricted stock units (RSUs) andsecurities remaining available for issuance under our equity
compensation plans that were in effect during 2021.

Plan Category

Securities
Securities
to be Issued
Weighted
Available
Upon
Average
For Future
Exercise of
ExerciseIssuance
Outstanding
Price of Under Equity
Options and Outstanding Compensation
Rights (a) Options (b)Plans (c)Equity compensation plans:
Approved by security holders
20,288,851
Not approved by security holders–
Total
20,288,851

N/A–

69,806,823–
69,806,823

Item 14. Principal Accountant Fees
and Services
Information regarding principal accountant fees andservices will be in the 2022 Proxy Statement and isincorporated in this Form 10-K by reference.

PART IV
Item 15. Exhibit and Financial Statement
Schedules(a) Documents filed as part of this Report:

In the table above:

1. Consolidated Financial Statements‰ Securities to be Issued Upon Exercise of Outstanding
Options and Rights includes 20,288,851 shares that may
be issued pursuant to outstanding RSUs. These awards
are subject to vesting and other conditions to the extent
set forth in the respective award agreements, and theunderlying shares will be delivered net of any required tax
withholding. As of December 31, 2021, there were no
outstanding options.

The consolidated financial statements required to be filed inthis Form 10-K are included in Part II, Item 8 hereof.

‰ Shares underlying RSUs are deliverable without thepayment of any consideration, and therefore these awards
have not been taken into account in calculating theweighted average exercise price.
‰ Securities Available For Future Issuance Under Equity
Compensation Plans represents shares remaining to beissued under our current stock incentive plan (SIP),
excluding shares reflected in column (a). If any shares ofcommon stock underlying awards granted under ourcurrent SIP, our SIP adopted in 2018, our SIP adopted in2015 or our SIP adopted in 2013 are not delivered due toforfeiture, termination or cancellation or are surrenderedor withheld, those shares will again become available tobe delivered under our current SIP. Shares available for
grant are also subject to adjustment for certain changes incorporate structure as permitted under our current SIP.

228 Goldman Sachs 2021 Form 10-K

2. Exhibits
2.1

Plan of Incorporation (incorporated byreference to Exhibit 2.1 to the Registrant’s
Registration Statement on Form S-1(No. 333-74449)).

3.1

Restated Certificate of Incorporation of The
Goldman Sachs Group, Inc., amended as ofNovember 10, 2021 (incorporated by reference
to Exhibit 3.1 to the Registrant’s Current
Report
on
Form
8-K,
filed
on
November 10, 2021).

3.2

Amended and Restated By-Laws of The
Goldman Sachs Group, Inc., amended as of
October 28, 2021 (incorporated by reference to
Exhibit 3.1 to the Registrant’s Quarterly
Report on Form 10-Q for the quarter ended
September 30, 2021).

4.1

Description of The Goldman Sachs Group,
Inc.’s Securities registered pursuant to
Section 12 of the Securities Exchange Act of1934.

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

4.2

Indenture, dated as of May 19, 1999, between The
Goldman Sachs Group, Inc. and The Bank of New
York, as trustee (incorporated by reference to
Exhibit 6 to the Registrant’s Registration
Statement on Form 8-A, filed on June 29, 1999).

4.3

Subordinated Debt Indenture, dated as ofFebruary 20, 2004, between The Goldman Sachs
Group, Inc. and The Bank of New York, as trustee(incorporated by reference to Exhibit 4.2 to theRegistrant’s Annual Report on Form 10-K for the
fiscal year ended November 28, 2003).

4.4

4.5

Warrant Indenture, dated as of February 14, 2006,
between The Goldman Sachs Group, Inc. and The
Bank of New York, as trustee (incorporated byreference to Exhibit 4.34 to the Registrant’s PostEffective Amendment No. 3 to Form S-3, filed on
March 1, 2006).
SeniorDebt
Indenture,
dated
as
of
December 4, 2007, among GS Finance Corp., asissuer, The Goldman Sachs Group, Inc., asguarantor, and The Bank of New York, as trustee(incorporated by reference to Exhibit 4.69 to theRegistrant’s Post-Effective Amendment No. 10 toForm S-3, filed on December 4, 2007).

4.6

Senior Debt Indenture, dated as of July 16, 2008,
between The Goldman Sachs Group, Inc. and The
Bank of New York Mellon, as trustee(incorporated by reference to Exhibit 4.82 to theRegistrant’s Post-Effective Amendment No. 11 toForm S-3 (No. 333-130074), filed on
July 17, 2008).

4.7

Fourth Supplemental Indenture, dated as ofDecember 31, 2016, between The Goldman Sachs
Group, Inc. and The Bank of New York Mellon, as
trustee, with respect to the Senior Debt Indenture,
dated as of July 16, 2008 (incorporated byreference to Exhibit 4.1 to the Registrant’s Current
Report on Form 8-K, filed on January 6, 2017).

4.8

SeniorDebt
Indenture,
dated
as
of
October 10, 2008, among GS Finance Corp., asissuer, The Goldman Sachs Group, Inc., asguarantor, and The Bank of New York Mellon, as
trustee (incorporated by reference to Exhibit 4.70
to the Registrant’s Registration Statement on
Form S-3 (No. 333-154173), filed on
October 10, 2008).

4.9

4.10

4.11

4.12

4.13

4.14

First Supplemental Indenture, dated as ofFebruary 20, 2015, among GS Finance Corp., as issuer,
The Goldman Sachs Group, Inc., as guarantor, and The
Bank of New York Mellon, as trustee, with respect to
the Senior Debt Indenture, dated as of October 10, 2008
(incorporated by reference to Exhibit 4.7 to theRegistrant’s Annual Report on Form 10-K for the fiscal
year endedDecember 31, 2014).
Fourth Supplemental Indenture, dated as ofAugust 21, 2018, among GS Finance Corp., as issuer,
The Goldman Sachs Group, Inc., as guarantor, and
The Bank of New York Mellon, as trustee, withrespect to the Senior Debt Indenture, dated as of
October 10, 2008 (incorporated by reference to
Exhibit 4.1 to the Registrant’s Quarterly Report on
Form 10-Q for the period ended September 30, 2018).
Ninth
Supplemental
SubordinatedDebt
Indenture, dated as of May 20, 2015, between
The Goldman Sachs Group, Inc. and The Bank of
New York Mellon, as trustee, with respect to the
Subordinated Debt Indenture, dated as ofFebruary 20, 2004 (incorporated by reference to
Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K, filed on May 22, 2015).
Tenth Supplemental Subordinated Debt Indenture,
dated as of July 7, 2017, between The Goldman
Sachs Group, Inc. and The Bank of New York
Mellon, as trustee, with respect to the SubordinatedDebt Indenture, dated as of February 20, 2004
(incorporated by reference to Exhibit 4.89 to theRegistrant’s Registration Statement on Form S-3(No. 333-219206), filed on July 10, 2017).
Seventh Supplemental Indenture, dated as ofJuly 1, 2020, among GS Finance Corp., as issuer, The
Goldman Sachs Group, Inc., as guarantor, and The
Bank of New York Mellon, as trustee, with respect to
the Senior Debt Indenture, dated as of
October 10, 2008 (incorporated by reference to
Exhibit 4.69 to the Registrant’s Registration Statement
on Form S-3 (No. 333-239610), filed on July 1, 2020).
Eighth Supplemental Indenture, dated as of
October 14, 2020, among GS Finance Corp., asissuer, The Goldman Sachs Group, Inc., asguarantor, and The Bank of New York Mellon, as
trustee, with respect to the Senior Debt Indenture,
dated as of October 10, 2008 (incorporated byreference to Exhibit 4.1 to the Registrant’s Current
Report on Form 8-K, filed on October 14, 2020).
Certain instruments defining the rights of holdersof long-term debt securities of the Registrant andits subsidiaries are omitted pursuant to
Item 601(b)(4)(iii) of Regulation S-K. The
Registrant hereby undertakes to furnish to theSEC, upon request, copies of any such instruments.
Goldman Sachs 2021 Form 10-K 229

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

10.1

The Goldman Sachs Amended and Restated
Stock Incentive Plan (2021) (incorporated byreference to Annex C to the Registrant’s
Definitive Proxy Statement on Schedule 14A,
filed on March 19, 2021). †10.10

Form of Indemnification Agreement, dated asof July 5, 2000 (incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly
Report on Form 10-Q for the period ended
August 25, 2000).

10.2

The Goldman Sachs Partner CompensationPlan(incorporated
byreference
to
Exhibit 10.18 to the Registrant’s Registration
Statement on Form S-1 (No. 333-74449)). †

10.11

10.3

The Goldman Sachs Amended and RestatedRestricted Partner Compensation Plan(incorporated by reference to Exhibit 10.1 to
the Registrant’s Quarterly Report on
Form 10-Q for the period ended
February 24, 2006). †Formof
Amendment,
dated
November 27, 2004, to Agreement Relating toNoncompetition and Other Covenants, dated
May 7, 1999 (incorporated by reference to
Exhibit 10.32 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
November 26, 2004). †10.12

Form of Employment Agreement for
Participating
Managing
Directors(incorporated by reference to Exhibit 10.19 to
the Registrant’s Registration Statement on
Form S-1 (No. 333-75213)). †Form of Year-End Option Award Agreement(incorporated by reference to Exhibit 10.36 to
the Registrant’s Annual Report on Form 10-K
forthefiscalyear
ended
November 28, 2008). †

10.13

Form
of
Agreement
RelatingtoNoncompetition and Other Covenants(incorporated by reference to Exhibit 10.20 to
the Registrant’s Registration Statement on
Form S-1 (No. 333-75213)). †Form of Non-Employee Director Option
Award Agreement (incorporated by reference
to Exhibit 10.34 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2009). †10.14

Form of Non-Employee Director RSU Award
Agreement (pre-2015) (incorporated byreference to Exhibit 10.21 to the Registrant’s
Annual Report on Form 10-K for the fiscal year
ended December 31, 2014). †10.15

Ground Lease, dated August 23, 2005, between
Battery Park City Authority d/b/a/ Hugh L.
Carey Battery Park City Authority, as
Landlord, and Goldman Sachs Headquarters
LLC, as Tenant (incorporated by reference to
Exhibit 10.1 to the Registrant’s Current Reporton Form 8-K, filed on August 26, 2005).

10.16

GeneralGuarantee
Agreement,
dated
January 30, 2006, made by The Goldman
Sachs Group, Inc. relating to certain
obligations of Goldman Sachs & Co. LLC(incorporated by reference to Exhibit 10.45 to
the Registrant’s Annual Report on Form 10-K
for the fiscal year ended November 25, 2005).

10.17

Goldman Sachs & Co. LLC Executive Life
Insurance Policy and Certificate with
Metropolitan Life Insurance Company for
Participating
Managing
Directors(incorporated by reference to Exhibit 10.1 to
the Registrant’s Quarterly Report on
Form 10-Q for the period ended
August 25, 2006). †

10.4

10.5

10.6

10.7

AmendedandRestated
Shareholders’
Agreement, effective as of December 31, 2019,
among The Goldman Sachs Group, Inc. andvarious parties (incorporated by reference to
Exhibit 10.6 to the Registrant’s Annual Reporton Form 10-K for the fiscal year ended
December 31, 2019).
Instrument of Indemnification (incorporated byreference to Exhibit 10.27 to the Registrant’s
Registration Statement on Form S-1(No. 333-75213)).

10.8

Form
of
Indemnification
Agreement(incorporated by reference to Exhibit 10.28
to the Registrant’s Annual Report on
Form 10-K for the fiscal year ended
November 26, 1999).

10.9

Form
of
Indemnification
Agreement(incorporated by reference to Exhibit 10.44
to the Registrant’s Annual Report on
Form 10-K for the fiscal year ended
November 26, 1999).

230 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

10.18

10.19

Form of Goldman Sachs & Co. LLC Executive
Life Insurance Policy with Pacific Life &Annuity Company for Participating Managing
Directors, including policy specifications andform of restriction on Policy Owner’s Rights(incorporated by reference to Exhibit 10.2 tothe Registrant’s Quarterly Report on
Form 10-Q for the period ended
August 25, 2006). †Form of Second Amendment, dated
November 25, 2006, to Agreement Relating toNoncompetition and Other Covenants, dated
May 7, 1999, as amended effective
November 27, 2004 (incorporated by reference
to Exhibit 10.51 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
November 24, 2006). †10.20

Description
Program. †10.21

Letter, dated June 28, 2008, from The
Goldman Sachs Group, Inc. to Mr. Lakshmi N.
Mittal (incorporated by reference to
Exhibit 99.1 to the Registrant’s Current Reporton Form 8-K, filed on June 30, 2008). †

10.22

of

PMD

RetireeForm of Year-End RSU Award Agreement(fully vested) (pre-2015) (incorporated byreference to Exhibit 10.37 to the Registrant’s
Annual Report on Form 10-K for the fiscal year
ended December 31, 2014). †10.27

Form of Year-End RSU Award Agreement(Base and/or Supplemental) (pre-2015)(incorporated by reference to Exhibit 10.38 to
the Registrant’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2014). †10.28

Form of Year-End Restricted Stock Award
Agreement(fullyvested)(pre-2015)(incorporated by reference to Exhibit 10.41 to
the Registrant’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2013). †10.29

Form of Year-End Restricted Stock Award
Agreement (Base and/or Supplemental)(pre-2015) (incorporated by reference to
Exhibit 10.41 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2014). †10.30

Form of Fixed Allowance RSU Award
Agreement (pre-2015) (incorporated byreference to Exhibit 10.43 to the Registrant’s
Annual Report on Form 10-K for the fiscal year
ended December 31, 2014). †10.31

Form of Deed of Gift (incorporated byreference to Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10-Q for the period
ended June 30, 2010). †10.32

The Goldman Sachs Long-Term Performance
Incentive Plan, dated December 17, 2010
(incorporated by reference to Exhibit 10.1 to
the Registrant’s Current Report on Form 8-K,
filed on December 23, 2010). †10.33

Form of Performance-Based Restricted Stock
Unit
Award
Agreement(pre-2015)(incorporated by reference to Exhibit 10.2 tothe Registrant’s Current Report on Form 8-K,
filed on December 23, 2010). †10.34

Form of Performance-Based Option Award
Agreement (incorporated by reference to
Exhibit 10.3 to the Registrant’s Current Reporton Form 8-K, filed on December 23, 2010). †MedicalGeneralGuarantee
Agreement,
dated
December 1, 2008, made by The Goldman
Sachs Group, Inc. relating to certain
obligations of Goldman Sachs Bank USA(incorporated by reference to Exhibit 4.80 to
the Registrant’s Post-Effective Amendment
No. 2 to Form S-3, filed on March 19, 2009).

10.23

Form of One-Time RSU Award Agreement(pre-2015) (incorporated by reference to
Exhibit 10.32 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2014). †10.24

Amendments to Certain Non-Employee
Director
EquityAward
Agreements(incorporated by reference to Exhibit 10.69 to
the Registrant’s Annual Report on Form 10-K
forthefiscalyear
ended
November 28, 2008). †

10.25

10.26

Form of Year-End RSU Award Agreement (notfully vested) (pre-2015) (incorporated byreference to Exhibit 10.36 to the Registrant’s
Annual Report on Form 10-K for the fiscal year
ended December 31, 2014). †Goldman Sachs 2021 Form 10-K 231

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

10.35

Form
of
Performance-Based
Cash
Compensation Award Agreement (pre-2015)(incorporated by reference to Exhibit 10.4 to
the Registrant’s Current Report on Form 8-K,
filed on December 23, 2010). †10.47

Form of Year-End Short-Term Restricted StockAward Agreement (incorporated by reference
to Exhibit 10.57 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2015). †10.36

Amended and Restated General Guarantee
Agreement, dated November 21, 2011, madeby The Goldman Sachs Group, Inc. relating tocertain obligations of Goldman Sachs Bank
USA (incorporated by reference to Exhibit 4.1
to the Registrant’s Current Report on
Form 8-K, filed on November 21, 2011).

10.48

Form of Fixed Allowance RSU Award
Agreement (incorporated by reference to
Exhibit 10.49 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2020). †10.49

Form of Fixed Allowance Restricted StockAward Agreement (incorporated by reference
to Exhibit 10.50 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2020). †10.50

Form of Fixed Allowance Deferred Cash
Award Agreement (incorporated by reference
to Exhibit 10.59 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2015). †10.51

Form of Performance-Based Restricted Stock
Unit Award Agreement (fully vested). †10.52

Form of Performance-Based Restricted Stock
Unit Award Agreement (not fully vested). †10.53

Form of Performance-Based Cash Compensation
Award Agreement (incorporated by reference to
Exhibit 10.61 to the Registrant’s Annual Reporton Form 10-K for the fiscal year ended
December 31, 2015). †10.54

Form of Signature Card for Equity Awards. †10.55

Amended and Restated General Guarantee
Agreement, dated September 28, 2018, madeby The Goldman Sachs Group, Inc. relating tocertain obligations of Goldman Sachs Bank
USA (incorporated by reference to Exhibit 4.1
to the Registrant’s Current Report on
Form 8-K, filed on September 28, 2018).

10.56

Amended and Restated General Guarantee
Agreement, dated September 28, 2018, madeby The Goldman Sachs Group, Inc. relating tocertain obligations of Goldman Sachs & Co.
LLC (incorporated by reference to Exhibit 99.1
to the Registrant’s Current Report on
Form 8-K, filed on September 28, 2018).

10.37

Form of Aircraft Time Sharing Agreement(incorporated by reference to Exhibit 10.61 to
the Registrant’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2011). †10.38

The Goldman Sachs Group, Inc. Clawback
Policy, effective as of January 1, 2015
(incorporated by reference to Exhibit 10.53 to
the Registrant’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2014).

10.39

Form of Non-Employee Director RSU Award
Agreement. †10.40

Form of One-Time/Year-End RSU Award
Agreement. †10.41

Form of Year-End RSU Award Agreement (notfully vested). †10.42

Form of Year-End RSU Award Agreement(fully vested). †10.43

Form of Year-End RSU Award Agreement(Base (not fully vested) and/or Supplemental). †10.44

Form of Year-End Short-Term RSU Award
Agreement. †10.45

Form of Year-End Restricted Stock Award
Agreement (incorporated by reference to
Exhibit 10.46 to the Registrant’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2020). †10.46

Form of Year-End Restricted Stock Award
Agreement (fully vested) (incorporated byreference to Exhibit 10.53 to the Registrant’s
Annual Report on Form 10-K for the fiscal year
ended December 31, 2017). †232 Goldman Sachs 2021 Form 10-K

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES

10.57

Lease, dated August 17, 2018, between
Farringdon Street Partners Limited andFarringdon Street (Nominee) Limited, as
Landlord, and Goldman Sachs International, as
Tenant (incorporated by reference to
Exhibit 10.3 to the Registrant’s Quarterly
Report on Form 10-Q for the period ended
September 30, 2018).

21.1

List of significant subsidiaries of The Goldman
Sachs Group, Inc.

22.1

Issuers of guaranteed securities (incorporated
by reference to Exhibit 22.1 to the Registrant’s
Post-Effective Amendment No. 1 to Form S-3,
filed on February 18, 2021).

23.1

Consent of Independent Registered Public
Accounting Firm.

31.1

Rule 13a-14(a) Certifications.

32.1

Section 1350 Certifications (This information
is furnished and not filed for purposes ofSections 11 and 12 of the Securities Act of 1933
and Section 18 of the Securities Exchange Actof 1934).

101

Pursuant to Rules 405 and 406 of Regulation
S-T, the following information is formatted in
iXBRL (Inline eXtensible Business Reporting
Language): (i) the Consolidated Statements ofEarnings
for
the
years
ended
December 31, 2021, December 31, 2020 and
December 31, 2019, (ii) the Consolidated
Statements of Comprehensive Income for the
years
ended
December
31,
2021,
December 31, 2020 and December 31, 2019,(iii) the Consolidated Balance Sheets as ofDecember 31, 2021 and December 31, 2020,(iv) the Consolidated Statements of Changes inShareholders’ Equity for the years ended
December 31, 2021, December 31, 2020 and
December 31, 2019, (v) the Consolidated
Statements of Cash Flows for the years ended
December 31, 2021, December 31, 2020 and
December 31, 2019, (vi) the notes to theConsolidated Financial Statements and (vii) thecover page.

104

Cover Page Interactive Data File (formatted in
iXBRL in Exhibit 101).
† This exhibit is a management contract or a compensatory planor arrangement.

Goldman Sachs 2021 Form 10-K 233

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

By:
Name:
Capacity:
Date:

/s/

Lakshmi N. Mittal
Lakshmi N. Mittal
Director
February 24, 2022

THE GOLDMAN SACHS GROUP, INC.

By:
Name:
Capacity:
Date:

/s/

Adebayo O. Ogunlesi
Adebayo O. Ogunlesi
Director
February 24, 2022

By:
Name:
Capacity:
Date:

/s/

Peter Oppenheimer
Peter Oppenheimer
Director
February 24, 2022

By:
Name:
Capacity:
Date:

/s/

Jan E. Tighe
Jan E. Tighe
Director
February 24, 2022

By:
Name:
Capacity:
Date:

/s/

Jessica R. Uhl
Jessica R. Uhl
Director
February 24, 2022

By:
Name:
Capacity:
Date:

/s/

David A. ViniarDavid A. Viniar
Director
February 24, 2022

By:
Name:
Capacity:
Date:

/s/

Mark O. WinkelmanMark O. Winkelman
Director
February 24, 2022

By:
Name:
Capacity:/s/

Denis P. Coleman III
Denis P. Coleman III
Chief Financial Officer(Principal Financial Officer)
February 24, 2022/s/

Sheara J. Fredman
Sheara J. Fredman
Chief Accounting Officer(Principal Accounting Officer)
February 24, 2022

By:
Name:
Title:
Date:/s/

Denis P. Coleman III
Denis P. Coleman III
Chief Financial Officer
February 24, 2022

Pursuant to the requirements of the Securities Exchange Actof 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities andon the dates indicated.
By:
Name:
Capacity:

/s/

Date:
By:
Name:
Capacity:
Date:

/s/

By:
Name:
Capacity:
Date:

/s/

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/s/

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David SolomonDavid Solomon
Director, Chairman and Chief Executive
Officer (Principal Executive Officer)
February 24, 2022
M. Michele Burns
M. Michele Burns
Director
February 24, 2022
Drew G. Faust
Drew G. Faust
Director
February 24, 2022
Mark A. FlahertyMark A. Flaherty
Director
February 24, 2022
Kimberley D. Harris
Kimberley D. Harris
Director
February 24, 2022
Ellen J. Kullman
Ellen J. Kullman
Director
February 24, 2022

234 Goldman Sachs 2021 Form 10-K

Date:
By:
Name:
Capacity:
Date:Shareholder Information

Executive Offices

2021 Annual Report on Form 10-K

The Goldman Sachs Group, Inc.
200 West Street
New York, New York 10282
1-212-902-1000
www.goldmansachs.com

Copies of the firm’s 2021 Annual Report on
Form 10-K as filed with the U.S. Securities and Exchange
Commission can be accessed via our Web site atwww.goldmansachs.com/investor-relations.

Common Stock
The common stock of The Goldman Sachs Group, Inc. islisted on the New York Stock Exchange and trades under
the ticker symbol “GS.”
Shareholder Inquiries
Information about the firm, including all quarterly earnings
releases and financial filings with the U.S. Securities andExchange Commission, can be accessed via our Web siteat www.goldmansachs.com.
Shareholder inquiries can also be directed to Investor
Relations via email at gs-investor-relations@gs.com
or by calling 1-212-902-0300.

Copies can also be obtained bycontacting Investor Relations via email at
gs-investor-relations@gs.com
or by calling 1-212-902-0300.
Transfer Agent and Registrar for Common Stock
Questions from registered shareholders of The Goldman
Sachs Group, Inc. regarding lost or stolen stock certificates,
dividends, changes of address, and other issues related
to registered share ownership should be addressed(by regular mail or phone) to:Computershare
P.O. Box 505000
Louisville, KY 40233-5000
U.S. and Canada: 1-800-419-2595
International: 1-201-680-6541
www.computershare.com
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, New York 10017

The papers used in the printing of this Annual Report are certified by
the Forest Stewardship Council,® which promotes environmentally
appropriate, socially beneficial and economically viable managementof the world’s forests. These papers contain a mix of pulp that is derived
from FSC® certified well-managed forests; post-consumer recycled paper
fibers and other controlled sources. Sandy Alexander Inc FSC® “Chainof Custody” certification is BVQI-C020268.

© 2022 Goldman Sachs
4350-21-102

goldmansachs.com