Goldman Reform Presentation

8/9/2019 Goldman Reform Presentation

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2/39

Goldman Sachs Global Investment Research 2

Regulat ion

1. Stepping back whats really on the table

First tenant: limitations of scope, which would restrict the activities of banks (ie

the Volcker

rule, the Blanche Lincoln proposal)

Second tenant: alterations to existing practices and market structures (ie

the derivatives

proposals, the consumer protection agency)

2. An off-setting force credit and liquidity

Must be weighed against credit availability and liquidity in secondary markets

This may moderate some of the worst case scenarios (eg

momentum seems to be building

to remove an outright prohibition on swaps dealing by banks )

Where we would position

We believe big banks have lagged enough to justify the legislative risk

Continue to favor JPM and BAC

Exchanges (CME, ICE, NDAQ and NYX) should benefit from the move to central clearing


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5/39


Sum m ary o f key proposa ls and potent ia limpac t t o f inanc ia l sub sec t o rs

Area of reform What seems likely Points of greatest debate from here

Big

Banks

Regional

Banks

Credit

Cards

Smid

Brokers

Mkt

Structure

Asset

Mgrs

Derivatives Greater use of central clearing

1. Section 106 - can banks own swaps dealers

2. Margin requirements3. Central clearing vs. exchange trading

+

Volcker rule Less proprietary trading

1. Sponsorship of hedge funds and private equity --

i.e. can banks put HF and PE into asset mgmtdivisions

+

Consumer Protection New Consumer FinancialProtection Agency (CFPA)

1. Rule making authority: CFPA vs. Fed

2. National pre-emption vs. state by state lendinglaws

Bank tax & size limitationsSome form of tax to fund anylosses from TARP

1. Pre-funded money for any future crisis

2. Legislative restrictions on size of banks

Resolution AuthorityAbility to wind down systemicallyimportant firms

1. Impact on credit markets including potentialratings agency actions

OVERALL RISK -->

MOST

NEGATIV

E RISK

Potential Sector Risk

LESS AT RISK

POTENTIAL

MODEST

POSITIVES

Source: Goldman Sachs Research estimates.


6/39


The re form debat e f rom here

Passes Financial ServicesCommittee (Nov. 2009)

Banking Committee Markup(March 2010)

Ag. Committee Markup(April 2010)

Passes House Floor 223-202(Dec. 2009)

Senate Floor(April/May 2010)

House-Senate ConferenceCommittee

(May/June 2010)

Option 2: House Passage of Senate Bill

House Passage of SenateBill (May/June 2010)

Option 1: Conference Committee

House Passage of Conf.Report (June 2010)

Senate Passage of Conf.Report (June 2010)

House Senate


7/39

Der ivat ives and prop t rad ing


8/39Goldman Sachs Global Investment Research 8

RAFSA has t w o im por t ant proposa ls thatimpac t m ark e t s t ruc t u re com pan ies


The Volcker Rule (Section 619 or Title VII)

Would prohibit certain types of high risk activity

Proposal could reduce overall trading activity, potentially lower market liquidity, and

impact fees generated by exchanges in the transaction parts of their business

Creating a safer derivatives market: there are three tenets to this proposal:

Central clearing of OTC derivatives: all OTC products would be required to be centrallycleared with requisite initial margin requirements for all products

Exchange trading as a price transparency mechanism would be required

Can be exchange traded or traded on an alternative swap execution facility(ASEF)

Allow for some customized bilateral contracts. Exceptions are fairly well defined:

One counterparty is not a swap/security dealer or MSP (major swap participant),the product does not meet the eligibility requirements of a clearing house

Margin may be waived in certain circumstances if one party is not a swap/securitydealer or MSP, is using the swap to hedge under GAAP, and is not predominantlyengaged in financial activities



Marke t St ruc t u re & Ex c hange s tock sappear w el l pos i t ioned t o benef i t


Difficult to see how exchange and clearing stocks are not incremental beneficiaries

CME: currently trades and clears 99% of U.S. futures products on interest rates

NDAQ: acquired the International Derivatives Clearing Group (IDCG) in 2009, which is

the only market participant to have announced it has an interest rate swap clearingplatform ready for clients to test

Dealers/Brokers have less directional authority to drive clearing strategy than they have hadin the past few years

ICE Trust is the dominant provider of clearing services in CDS clearing in the U.S.

Dealers were able to secure 49% of net profits from ICE Trust to support that platform

NYSE sold 49% stake in its U.S. options business to attract flow

Beyond clearing, there could be positive impacts on transactions and associated exchangetraded product

Clearing tends to have a higher profit stickiness given underlying liquidity pool

Other market structure names may benefit: GFIG, BGCP, MKTX, NITE



Sizing t he OTC m ark et s : $604 t n not ionaland m ul t ip le the s ize o f ex c hange mark e t s


$0

$100

$200

$300

$400

$500

$600

$700

$800

1H98

2H98

1H99

2H99

1H00

2H00

1H01

2H01

1H02

2H02

1H03

2H03

1H04

2H04

1H05

2H05

1H06

2H06

1H07

2H07

1H08

2H08

1H09

Interest rate contracts Unallocated Credit default swaps

Foreign exchange contracts Commodity contracts Equity-linked contracts

72 80 81

OTC

notionalamountoutstanding($,

trillions)

88 94 95 99111

127 141169

197

220257 281 297

370414

516

596

684

592

604

Interest rate and F/X OTC markets are multiple of exchange peers

437.2

6.6

48.867.1

5.8 0.3-

50

100

150

200

250

300

350

400

450

500

Interest Rate Equity Index F/X

6.5x

1.2x

157x

11.9x

21.2x

0.6x4.5x

1.2x 2.8x 1.1x 1.0x

93.0x

45.0x

92.0x

0

1020

30

40

50

60

70

80

90

100

Total FX

Forward

FX Swaps FX

Options

Total FRAs IRS IR

Options

F/X

Futures

Rate

Futures

Equity

Futures

F/X OTC Interest Rate OTC Exchange Traded

OTC markets have grown at a 24% CAGRsince 1998

Interest Rate swaps have grown the

fastest at 26% and represent 72% of total

CDS swaps are now $25 tn

But exchange traded products turn overmuch more rapidly



CDS m ark et s : $25 t n gross not ional , butnet t ing reduces r isk roughly 90%


The CDS markets remain quite robust, withover $25 tn in gross exposure

With compression and tear-ups, the amount

of net exposure is $2.4 tn

77% of CDS is dealer to dealer and is likely tomove into the ICE Trust Clearing House

The average length of time to termination is2.7 years

Dealer to

Dealer77%

Dealer to

Client

23%

$0

$5

$10

$15

$20

$25

$30

Gross Net

Index Single Name

$25.0 tn

$2.4 tn

90% Compression

from Gross to Net

CDS exposure

$0

$2

$4

$6

$8

$10

$12

$14

$16

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

0%

20%

40%

60%

80%

100%

120%Cumulative Single Name Notional Outstanding ($ tn) Cumulative Notional % Outstanding

Average Years to Swap

Term ination: 2.7 years


12/39



In te res t Rat e Sw aps: t he upc om ing $437 tnoppor tun i ty


35% of global interest rate swap products are U.S.based

More than three-quarters are interest rate swaps,plain vanilla and somewhat easy to standardize

Roughly 60% of product is dealer-to-dealer, with theremaining 40% up for client central clearing and thusimpacted by U.S. regulatory changes

Interest Rate Swap Clearing Opportunity

Options9%

Eligible to clear by

cpty and type

27%

Basis and X-

currency

6%

Exotics

10% Currently cleared

25%

Customer trades -

focus on customer

clearing

12%

FRAs 30 yr +eligibility v ia

product set

expansion

3%

Eligible w / smaller

dealers - focus on

increased

Sw apclear 8%

Backloading

program to

address

More bespoke structures

w hose eligibility w ill

require further product

expansion

Intere st Rate Swaps by Derivative Type: Total: $437 tn

Options

11%

Interest rate sw aps

78%

Forward rate

agreements

11%

Interest Rate Swaps by Currency: Total $437 tn

Swedish krona

1%

Sterling

7%

CAD

1%

Swiss franc

1%

Other

4%

Euro

38%

US dollar

35%

Yen

13%



Cl ient Clear ing U.S. denom inat ed sw aps ist he ta rge ted In te res t Rat e produc t


The interest rate swap market is the focus of

the next leg of clearing. It represents 72% ofthe global OTC market

Total Global Interest Rate Swap

Market:$437 tn

Dealer to Client(25%):

$109 tn

USDSwaps:(35%):

$39 tn

Dealer to Dealer transactions (52%) are clearedat LCH SwapClear

The clearing opportunity lies in plain vanillaclient transactions

The initial opportunity to clear will be in USDdenominated swaps

However, their could emerge global solutionsfollowing a successful U.S. Launch



Could be up t o $570 bn in IRS in i t ia l m arg inrequi rem ent s needed for USD sw aps


We estimate USD swapsaccount for 35% of totalglobal swaps.

Initial margin

requirements are likely tobe 1%-5% of notionalbased on duration

We estimate clients mayneed to post up to $570

bn in initial margin onswap positions for USDswaps

The size of the client swapmarket may decline

meaningfully with highercosts/margin

Today, there is a deminimis amount of margincollected on client swaps

outside hedge fundclients

NDAQ and CME have announced they would offer an interest rate swapproduct for clients; LCH SwapClear has also launched a client product

NDAQs IDCG indicated it would charge $1/$100K of notional valuecleared per contract

Average duration is 5-7 years for most plain vanilla swaps

Duration

Less than 1

Year

Between 1-5

Years Over 5 Years Total

Total Interest Rate OTC Global Market ($ bn) 159,143 128,301 149,754 437,198

% of total 36% 29% 34% 100%

U.S. denominated swaps, % of total 35%U.S. denominated swaps, in $ bn 56,118 45,242 52,807 154,167

% of original interest rate swap notional value 35% 35% 35% 35%

Transaction Type

Dealer-to-Dealer 60%

Dealer-to-Client 25%

Non-Clearable (bespoke, option, basis) 15%

Dealer-to-Client summary of notional exposure ($ bn) 14,029 11,311 13,202 38,542% of original interest rate swap notional value 9% 9% 9% 9%

Estimated Compression (netting, tear-ups) 25%

Net Exposure 10,522 8,483 9,901 28,906

% of original interest rate swap notional value 7% 7% 7% 7%

Initial Margin required for U.S. denominated Swaps (est) 1.0% 2.0% 3.0% 2.0%

Initial Margin required for U.S. firms ($ bn, est) $105 $170 $297 $572

Interest Rate Margin Estimates for U.S. Clients ($ bn)



How w e th ink about t he i nt e rest rat e sw apc lear ing oppor t un i t y : up t o $400 m n annual ly

The only part of the market up for competition is the dealer-to-clientIRS market, about 25% of the total IRS market, or about $39 tn innotional

There is limited netting given client positions are bespoke

Potential revenue opportunity from clearing of $100-$400 mn over time,though this could take 4-7 years to achieve

Notes

Total Global Interest Rate Swap Notional Outstanding $437,198,000,000,000 $437 tn

U.S. Percentage of total 35%

U.S. Dollar denominated IRS $154,167,000,000,000

Swap participant break-down

Dealer to Dealer - plain vanilla 60% $92,500,200,000,000 Already within LCH SwapClear Clearing mechanism

Dealer to Client - plain vanilla 25% $38,541,750,000,000 Target market opportunity

Other (bespoke, option, basis, etc) 15% $23,125,050,000,000 Will require initial margin, not likely to be cleared

Dealer to Client Notional $38,541,750,000,000 This is the sector CME, NDAQ are pursuing

Number of 'one $ mn units' 38,541,750 Assumes full backloading, probably takes 4-7 years to reach this level

Potential Clearing Revenues Cost per million Potential revenue$2 $77,083,500

$5 $192,708,750

$10 $385,417,500 This is IDCG's target pricing

Summary

Interest Rate Swap Clearing opportunity

Source: Goldman Sachs Research


17/39

Consum er p ro tec t ion


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19/39

Reso lut ion Aut hor it y



Capi t a l leve ls are bac k t o pre-c r is is leve ls

Source: Company reports, Goldman Sachs Research

50% of banks have >8% Tier 1 commonCapital ratios back to pre-crisis levels

~5.8%

~8.3%

~11.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

1Q91

2Q92

3Q93

4Q94

1Q96

2Q97

3Q98

4Q99

1Q01

2Q02

3Q03

4Q04

1Q06

2Q07

3Q08

4Q09

USBanksCapitalRatio

s

TCE / TA

Tier 1 Common

Tier 1 Ratio

Tier 1 CommonSTT 15.9%NTRS 12.8%BK 11.6%COF 10.7%FHN 9.9%CMA 9.6%CYN 9.4%C 9.1%

JPM 9.1%BBT 8.7%

WAL 8.2%

MS 8.2%

STI 7.7%BAC 7.6%PNC 7.6%KEY 7.5%

MI 7.5%FNFG 7.5%RF 7.1%USB 7.1%WFC 7.1%ZION 7.0%FITB 7.0%HBAN 6.5%

Simple Avg 8.8%Weighted Avg 8.3%

6.0%

8.0%

100%

above 6%

50% above

8%



We are about of t he w ay through lossesand cap it a l m ark e ts rem a in ac c omm odat i ve

Source: Company reports, Goldman Sachs Research

Capital markets remain open$1.8 tn through $2.1-2.6 tn of losses

$ trillions

Out-

standingLosses

Cumulative

Loss Rate Losses

Cumulative

Loss Rate

Subprime 0.9 0.3 32% 0.3 38%

Option ARM 0.5 0.1 27% 0.2 33%

Home Equity 1.1 0.1 13% 0.2 16%

Other (FHA, GNMA) 0.9 0.1 11% 0.1 14%

Alt-A 2.2 0.2 11% 0.3 14%

Prime 5.7 0.3 5% 0.4 6%

Resi Mortgage 11.3 1.2 11% 1.5 13%

Commercial Real Estate 3.3 0.3 8% 0.3 10%

Cards 1.0 0.2 20% 0.2 23%

Auto 1.1 0.1 9% 0.2 14%

Commercial 6.8 0.4 5% 0.5 7%

Total 23.5 2.1 9% 2.6 11%

Losses Recognized as of 1Q10 $1.8TN

Low High

34%Average Deal

Performance-49% 5%-8% 62% 29%

26

45

52

140

64

9

0

20

40

60

80

100

120

140

160

2H07 1H08 2H08 1H09 2H09 1H10 TD

USBanksCommonand

ConvertsIssuance($bn)


22/39



Size c aps w ould be a b ig deal but w e renot sure t here i s support t o enac t t hem

Source: Company data, SNL, Goldman Sachs Research estimates.

Liabilities would increase through a boom,then need to fall in a bust2% GDP cap implies $2.7TN of shrinkage

$BN Assets Liabilities DepositsNon-

Deposits2% of GDP

Implied

Decline

Implied

shrinkage

BAC 2330 2,103 976 1,127 285 842 36%

JPM 2130 1,971 925 1,046 285 761 36%

C 2000 1,848 828 1,021 285 735 37%

MS 820 765 64 701 285 416 51%

WFC 1220 1,105 805 301 285 15 1%

Total 8500 7794 3598 4,196 1,426 2,770 33%

150

170

190

210

230

250

270

290

310

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2%o

fNominalGDP($bn)


24/39

Credi t ava i lab i l i t y and l iqu id i t y



Less in t eres t ra t e hedging = m ore vola t i lem or t gage ra t es rela t ive to 10yr UST

Source: Federal Reserves, Freddie Mac, Goldman Sachs Research estimates.

134bps

170bps

224bps

116bps

0bps

50bps

100bps

150bps

200bps

250bps

300bps

350bps

400bps

450bps

500bps

Jan-72

Jan-73

Jan-74

Jan-75

Jan-76

Jan-77

Jan-78

Jan-79

Jan-80

Jan-81

Jan-82

Jan-83

Jan-84

Jan-85

Jan-86

Jan-87

Jan-88

Jan-89

Jan-90

Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Conforming Mortgage spread to 10yr Treasury

Average

+1SD

-1SD

1970 - 1989 70

1990 - Now 32

Standard Deviation

Less hedging = more volatility


26/39


As pr iva t e sec t or c red i t shr ink s , loans aresh if t ed t o t he governm ent ba lance sheet

Source: Industry sources, Goldman Sachs Research.

Transfer of credit to government balance sheet most pronounced in resi mortgages

-500

-400

-300

-200

-100

0

100

200

300

400

500

Gov't incl GSEs Bank Loans Non-banks + securitization

USRes

iRea

lEs

tateCre

dit-

Yo

YChange,

$bn

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

1Q09

2Q09

3Q09

Mortgageorig

ina

tions

hare-

Fann

ie,

Fre

ddie

,FHA

Note: Loan shrinkage data cited here differs from similar data points cited on p14 and p24 as this data point is sourced from Federal Reserve-

Flow of Funds data while p12 andp28 data points are derived from the Federal Reserve- H-8 data

% of US

Credit Market

YoY %

Change

YoY $bn

Change

Non-banks + securitization 40% -12% -607

Bank loans 31% -7% -552

Government incl GSEs 29% +8% +495

Total 100% -3% -664

Non-banks and securitization account for biggest piece ofcredit outstanding and credit shrinkage

Private credit is being transferred to Government balancesheet


27/39

Bank s possib le r isk s t o norm al ized EPS


28/39


Signi f ic ant range of EPS out c om es dependingon leg is la t ion

Source: FactSet, Goldman Sachs Research estimates.

Estimate risk vs valuation gap to historyEPS risk: from small plus to -20%

Exchanges

Asset Managers

Small Brokers

Regionals

Credit CardsLarge Banks

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

-25% -20% -15% -10% -5% 0% 5% 10%

Potential Earnings Estimate Upside/Downside from Reg Reform

Cu

rrentMultiplevs.LTAverage

Negative, but

seems factored

into valuation

A positive that may

not be fully

factored in

Potential

Earning Impact

% Factored in to

Estimates

Potential EarningsEstimate

Upside/Downside

Exchanges 7% 0% 7%

Asset Managers 5% 0% 5%

Small Brokers 3% 0% 3%

Regionals -6% 70% -2%

Credit Cards -17% 80% -3%

Large Banks -26% 20% -20%

M k t t b di t i


29/39


Mark et appears t o be discount ing someelem ent o f reg re form

Source: FactSet, Goldman Sachs Research estimates.

77%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

01/01/10

01/08/10

01/15/10

01/22/10

01/29/10

02/05/10

02/12/10

02/19/10

02/26/10

03/05/10

03/12/10

03/19/10

03/26/10

04/02/10

04/09/10

04/16/10

04/23/10

04/30/10

MarketImpliedProbabilityof

FinancialRegul

atoryReform*

*: defined as underperformance of big banks relative regionals, credit cards and small brokers divided by the incremental earnings from

regulatory reforms to big banks relative to the other sectors

We estimate the market discounts about an 80% chance of worst case scenario


30/39


Assessing im pact o f leg is lat ion by i t em


Hit to Industry

Normalized EPS

Accounted for by

Street? Large Banks * Regionals All

CARD Act 2% Mostly Total risk 25.7% 5.5% 17.6%

Overdraft Fees 3% Mostly Already modeled ** 5.3% 3.7% 5.2%

TARP Tax 4% NoIncremental risk to

normalzed EPS20.4% 1.8% 12.4%

Prop Restriction 3% No*: BAC, C, JPM and MS.

Liability Caps 2% No **: assuming CARD Act and Reg E are mostly modeled in.

Derivatives Legislation 4% No

Total 18% Partly

Large Banks * 26% Partly

Regionals 5% Mostly

Everything proposed so far could haircut normalized EPS about 18%


31/39


32/39


Break -up values for BAC and J PM areh igher than the c urren t s toc k p ri ces

Source: Company data, Goldman Sachs Research estimates.

BANK OF AMERICA JP MORGAN3Q09

Commercial

Bank

Global Card

Services

Investment

BankTotal 3Q09

Commercial

Bank

Global Card

Services

Investment

BankAM & Trust Total

Net interest income 5.2 2.7 3.8 11.8 Net interest income 7.2 2.3 2.3 1.1 12.8

Noninterest income 7.7 1.3 7.8 14.6 Noninterest income 4.9 1.1 5.4 2.8 14.3

Total revenue 12.9 4.0 11.7 26.4 Total revenue 12.1 3.5 7.7 3.9 27.1

Provision expense 7.0 3.7 1.1 11.7 Provision expense 4.4 3.3 0.4 0.1 8.1Noninterest expense 8.0 2.0 6.4 16.3 Noninterest expense 5.2 1.3 4.3 2.6 13.5

Pre-tax income -2.1 -1.6 4.3 -1.6 Pre-tax income 2.5 -1.1 3.0 1.2 5.5

Taxes -0.8 -0.6 1.6 -0.6 Taxes 1.1 -0.4 0.9 0.4 2.0

Tax rate 40% 36% 36% 39% Tax rate 43% 37% 31% 37% 36%

Net income -1.3 -1.0 2.7 -1.0 Net income 1.4 -0.7 2.1 0.7 3.5

Total assets 1,237 224 885 2,345 Total assets 1,161 192 679 93 2,12

Total loans 702 208 99 1,009 Total loans 450 169 66 52 738

Adjustment Adjustment Revenue run rate 12.9 4.0 11.7 28.6 Revenue run rate 11.3 3.5 7.7 3.9 26.3

Normalized provision rate 0.50% 3.00% 0.10% 0.98% Normalized provision rate 0.50% 3.00% 0.10% 0.00% 1.00

Normalized provision ($) 3.5 6.2 0.1 9.8 Normalized provision ($) 2.3 5.1 0.1 0.0 7.4

Normal efficiency 50% 40% 70% 57% Normal efficiency 50% 40% 70% 70% 14.8

Assumed efficiency * 55% 44% 77% 62% Assumed efficiency * 55% 44% 77% 77% 63%

Annual Pre-tax 19.6 2.8 10.7 33.1 Annual Pre-tax 18.1 2.7 7.0 3.6 31.3

Tax rate 35% 35% 35% 35% Tax rate 35% 35% 35% 35% 35%

Preferred dividend 2.6 0.0 0.0 2.6 Preferred dividend 0.0 0.0 0.0 0.0 0.0

Net income 10.2 1.8 6.9 18.9 Net income 11.8 1.7 4.5 2.3 20.4

ROA 0.8% 0.8% 0.8% 0.8% ROA 1.0% 0.9% 0.7% 2.5% 1.0%

Multiple 10.0x 10.0x 10.0x 10.0x Multiple 10.0x 10.0x 10.0x 15.0x 10.6

Value 102 18 69 189 Value 118 17 45 35 215

Value per share $11.8 $2.1 $8.0 $21.8 Value per share $29.8 $4.4 $11.6 $8.8 $54.6

*: assuming expenses are 10% higher due to the cost of running businesses separately.

Note: Note:

Commercial Bank includes Deposits, Home Loans & Insurance and Global Commercial Banking. Commercial Bank includes Retail Financial Services and Commercial Banking.

Investment Bank includes Global Corporate & IB, Global Markets and GWIM. AM & Trust includes Asset Management and Treasury & Securities Services.

Corporate segment is allocated to each segment. Excluding $2.2bn of MER CVA. Corporate segment is allocated to each segment.


33/39


Ana lyst c e rt i f i ca t ion

We, Richard Ramsden, Brian Foran and Daniel Harris, hereby certify that allof the views expressed in this report accurately reflect our personal viewsabout the subject company or companies and its or their securities. We also

certify that no part of our compensation was, is, or will be, directly orindirectly, related to the specific recommendations or views expressed inthis report.


34/39

Disc losures

May 6, 2010


35/39


Disc losures

Coverage group(s) of stocks by primary analyst(s)

Compendium report: please see disclosures at http://www.gs.com/research/hedge.html.

Company-specific regulatory disclosures

Compendium report: please see disclosures at http://www.gs.com/research/hedge.html.


36/39


Disc losures

Distribution of ratings/investment banking relationships

Price target and rating history chart(s)

Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to thecompanies included in this compendium can be found in the latest

relevant published research.

Goldman Sachs Investment Research global coverage universe

Rating Distribution Investment Banking Relationships

Global

Buy Hold Sell

30% 54% 16%

Buy Hold Sell

48% 46% 38%

As of April 1, 2010, Goldman Sachs Global Investment Research had investment ratings on 2,821 equity securities. Goldman

Sachs as signs s tocks as Buys and Sells on various regional Investment Lists; stocks not so ass igned are deemed Neutral.

Such ass ignments equate to Buy, Hold and Sell for the purposes of the above disc losure required by NASD/NYSE rules. See

'Ratings, Coverage groups and view s and related def initions' below .


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Goldman Reform Presentation

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Transcript of Goldman Reform Presentation