G & A expense

A shorthand expression used by many bankers to refer to general and administrative expenses. These are a subgrouping of a firm's operating expenses. In most banks, the term refers to all operating expenses excluding interest, depreciation, and amortization.

GAAP

See generally accepted accounting principles.

gains trading

The practice of purchasing securities and then selling those that subsequently appreciate in value while retaining as investment portfolio assets those that cannot be sold at a profit. Accounting and banking regulators have repeatedly and strongly criticized this practice. Rules related to the transfer of securities from trading portfolios to available-for-sale (AFS) or held-to-maturity (HTM) portfolios are specifically designed to prohibit gains trading.

gamma

The rate of change of an option’s delta for a small change in the price of the option’s underlying. See delta.

gap

(1) As a measurement of exposure to interest rate risk, the amount of mismatch or imbalance between the quantity of an entity's assets and the quantity of its liabilities that reprice in a defined or selected time period. In a single time period, the net mismatch or imbalance may be called the interval gap. Over a series of consecutive time periods or buckets, the total net imbalance or mismatch may be called the cumulative gap. See rate-sensitive assets and rate-sensitive liabilities.

(2) One of the four components of interest rate risk. The component of interest rate risk arising from the mismatch defined above. Also called mismatch or repricing risk.

(3) As a measurement of liquidity risk, the amount of mismatch between the quantities of cash provided from decreases in liabilities and increases in assets and the quantities of cash used by increases in assets and decreases in liabilities in a defined or selected time period.

gap analysis

A technique or process for quantifying exposure to adverse consequences from changes in interest rates. A comparison of the total quantity of a financial institution's rate-sensitive assets (RSAs) and rate-sensitive liabilities (RSLs) for each of a number of different future time periods or buckets. Gap analysis is used to evaluate the potential effect of rate shocks on income over these time periods. See gap, rate-sensitive assets and rate-sensitive liabilities.

gapping

Mismatching assets and liabilities, usually by borrowing short and lending long.

GASB

See Government Accounting Standards Board.

general fund

In fund accounting, the fund used to account for all financial resources, except those required to be accounted for in another fund. Often used as and referred to as the operating fund.

general intangibles

A category of personal property defined by Article 9 of the UCC. General intangibles is a catch-all term for intangibles other than accounts such as copyrights, trademarks, patent rights, franchise rights, good will, tax refunds, relocation claims, operating rights, and legal claims.

general obligation (GO)

A municipal obligation that is supported by the full faith and credit — the full taxing authority — of the municipality (as opposed to support from only the revenues from specific user fees).

general partnership

A partnership in which every partner is fully liable to the full extent of his, her, or its net worth for all the obligations of the partnership.

generally accepted accounting principles (GAAP)

Accounting treatments that fully conform to established rules from the American Institute of Certified Public Accountants (AICPA). For all nongovernment entities in the United States, GAAP is primarily determined by the Financial Accounting Standards Board (FASB). For state and local government entities in the United States, GAAP is primarily determined by the Government Accounting Standards Board (GASB). Both FASB and GASB function under the auspices of the Financial Accounting Foundation (FAF), an independent, nonprofit foundation.

geographic liquidity risk

A type of systemic risk where deterioration in regional economic conditions triggers liquidity crisis. Usually, such a crisis is triggered by credit loss. See systemic liquidity risk.

giants

FHLMC MBSs created when older pools that have been reduced to small outstanding balances (i.e., low current face) as a result of cumulative prepayments are combined to create new securities with larger remaining balances. Giants may be either fixed- or adjustable-rate securities.

Ginnie Mae

An informal name for the Government National Mortgage Association (GNMA) or for securities issued by it.

GLBA

See Gramm-Leach Bliley Act of 1999.

GNMA

See Government National Mortgage Association.

gnome

Fifteen-year FHLMC MBS pool that is issued under the FHLMC fifteen-year Cash Program. See nongnome.

GO

See general obligation.

good delivery

(1) Delivery of a security, from a seller to a buyer, that complies with all terms of the contract of sale.
(2) For a new, to-be-announced MBS, good delivery is delivery by the seller that conforms to rules published by the Bond Market Association (BMA).

good faith estimate

A document that lenders are required by regulation to provide all applicants for covered real estate loans. This document discloses the anticipated expenses that the applicant(s) will have to pay if the covered transaction is approved and closed.

goods

A category of personal property defined by Article 9 of the UCC. Sometimes called tangible goods. Further divided into consumer goods, equipment, farm products, and inventory.

Government Accounting Standards Board (GASB)

An accounting industry organization; part of the Financial Accounting Foundation. GASB issues Statements of Financial Accounting Standards that define and govern GAAP for state and local government entities in the United States.

Government National Mortgage Association (GNMA)

A government-owned corporation that is part of the U.S. Department of Housing and Urban Development. GNMA provides its guarantee, backed by the full faith and credit of the United States Government, to certain mortgage-related securities. Informally but widely known as Ginnie Mae.

grace period

A time period, usually one or more months, during which the debtor may delay principal repayment without incurring a penalty.

GPM

See graduated payment mortgage.

graduated payment mortgage (GPM)

A mortgage in which the monthly payment of principal and interest begins at a low amount and progressively increases to a predetermined higher amount. Thereafter, the amount of the monthly payment remains constant for the remaining life of the loan. The interest rate is fixed for the entire period.

Gramm-Leach Bliley Act of 1999 (GLBA)

Major banking legislation designed to significantly enhance the powers and authority of financial institutions by allowing the formation of new financial holding companies. Financial holding companies are authorized to engage in: underwriting and selling insurance and securities, conducting both commercial and merchant banking, investing in and developing real estate and other "complimentary activities." The statute also restricts the disclosure of nonpublic customer information by financial institutions and provides the major financial regulators with increased authority.

grantor

A person, partnership or corporation that gives or conveys an interest in property. Often used to identify the creator of a trust.

gross-bonded debt

The total amount of direct debt of an issuer, represented by outstanding bonds before deduction of any assets available and earmarked for their retirement.

gross margin

See margin.

gross profit

A subtotal on a firm's statement of income that is net sales minus cost of goods sold. Sometimes called gross profit on sales.

gross sales

The total dollar value of all revenue derived by the firm from the principal operations of its business during the period covered by the income statement report.

group sort

A service enabling a collecting bank to deposit checks drawn on a limited preselected group of payer institutions.

guarantee

See guaranty.

guaranteed bonds

A type of corporate bond for which a corporation other than the issuing corporation guarantees the repayment of a bond issue. Usually, the guarantee is provided by the parent firm of the issuing corporation.

guaranty

An agreement by a person, partnership, or corporation (other than the borrower) to repay a bank loan if the borrower does not pay.

guidance line of credit

A line of credit approved by the bank, but not disclosed to the borrower until some specific event, usually a request for funding from the borrower. Also called an unadvised line.