GLOSSARY

List of Financial Terms in alphabetical order:

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G-7 See Group of Seven

G-10 See Group of Ten

GAAP See Generally Accepted Accounting Principles

Gap Management A process of asset-liability management whereby the gap between maturing assets and liabilities is monitored and managed in order to achieve profitability and reduce interest rate risk.

GDP See Gross Domestic Product

Gearing A term used in international banking to describe the borrowing of money to invest in an income-producing asset with capital growth capacity.

General Agency System Type of insurance marketing where an agent represents one insurance company and is responsible for managing an assigned territory, which involves hiring and training new agents.

General Liability Insurance A type of liability insurance that covers personal, professional and commercial risks (for instance it may cover physical and property damages not covered by other types of insurance such as auto insurance).

General Obligation Bond (G-O Bond) State or municipal bonds in the United States that are approved by voters and backed by the full faith, credit and taxing power of the issuer. These bonds are usually issued to finance public projects such as road construction and schools.

Generally Accepted Accounting Principles (GAAP) Rules set forth by the Financial Accounting Standards Board (FASB) that outlines conventions and procedures for accounting practices in the United States.

GIC See Guaranteed Investment Contract.

Giro An electronic credit transfer system based in Europe and Japan that is used for making consumer bill payments.

Glass-Steagall Act U.S. federal law passed in 1933 that forced a separation between commercial banking and investment banking.

G-O Bond See General Obligation Bond

Goodwill Intangible asset, such as the value of a company's brand or reputation. Goodwill is also the price paid by a company to acquire another company that exceeds the value of the acquired company's assets. Goodwill arising from an acquisition under the purchase method of accounting is shown on the acquiring company's balance sheet and, in most countries, is amortized over an extended period of time, typically in the range of 20 to 30 years. Goodwill from an acquisition in the banking industry must be deducted in full immediately from Tier I capital (core capital) for capital adequacy purposes.

Government Agency Securities Securities issued by government associated agencies that have a high credit rating but are not government obligations and therefore not directly backed by the full faith and credit of the issuing governments.

Government Depository A bank that is eligible to accept government deposits. In the U.S. these include the Federal Reserve Banks, national banks, and charted banks in the Federal Reserve System.

Government Obligations Government debt instruments that the government has pledged to repay. These may include bonds from the government treasury, notes, bills and savings bonds.

Gramm-Leach-Bliley Act A 1999 U.S. law that removed barriers for qualifying banks to participate in insurance underwriting and agency activities and provided complex rules and regulations regarding allowable activities for banks.

Gross Domestic Product (GDP) The market value of the goods and services produced in a country during a calendar year.

Group Insurance Policies Insurance written for a group of people who are then covered by one master policy. Typically, these polices are issued to employees of a company or to individuals affiliated with a specific association, such as the American Association of Retired Persons (AARP).

Group of Seven (G-7) An organization of the seven major industrialized nations that meet to discuss international economic issues. The G-7 countries are Canada, France, Germany, Great Britain, Italy, Japan and the United States.

Group of Ten (G-10) the eleven major industrialized countries that meet to coordinate policies that lead to more stable monetary and fiscal policies worldwide. The Group of Ten includes Canada, the United States, Japan, France, Germany, Great Britain, Italy, the Netherlands, Belgium, Sweden and Switzerland.

Group Term Life Insurance A type of group life insurance that provides yearly renewable term insurance for employees during the term of their employment.

Group Underwriting The underwriting of risk associated with a group rather than that associated with an individual.

Guaranteed Investment Contract (GIC) A retirement plan funding vehicle, under which the insurer accepts a single deposit from the plan sponsor and guarantees to pay a specific interest rate on the deposited funds for a specific time period. Sometimes called a guaranteed income contract or a guaranteed interest contract.

Guarantor A secondary party, either a person or company, who guarantees payment in the event of default by the responsible primary party to a transaction. Typically there are specific terms and conditions set for the guarantor that must be met in the case of default.

Guaranty Fund A fund established in the U.S. to meet the policy obligations of insurance companies that fail. The insurance companies make contributions to the fund, which was established by the U.S. government.

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