Off-Balance Sheet Lending-Related Financial Instruments, Guarantees and Other Commitments (Tables)

3 Months Ended

Mar. 31, 2012

Off balance sheet lending related financial instruments guarantees and other commitments [Abstract]

Off-Balance Sheet Lending Related Financial Instruments, and Guarantees and Other Commitments

The following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at March 31, 2012, and December 31, 2011. The amounts in the table below for credit card and home equity lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card lines of credit by providing the borrower notice or, in some cases, without notice as permitted by law. The Firm may reduce or close home equity lines of credit when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower. Also, the Firm typically closes credit card lines when the borrower is 60 days or more past due.

Off–balance sheet lending-related financial instruments, guarantees and other commitments
	Contractual amount												Carrying value(i)
	March 31, 2012										December 31, 2011		March 31, 2012			December 31, 2011
By remaining maturity (in millions)	Expires in 1 year or less		Expires after 1 year through 3 years		Expires after 3 years through 5 years		Expires after 5 years		Total		Total
Lending-related
Consumer, excluding credit card:
Home equity – senior lien	$	1,103	$	4,921	$	4,742	$	5,482	$	16,248	$	16,542	$	—		$	—
Home equity – junior lien	2,361		8,981		7,630		6,444		25,416		26,408		—			—
Prime mortgage	2,594		—		—		—		2,594		1,500		—			—
Subprime mortgage	—		—		—		—		—		—		—			—
Auto	6,771		234		122		—		7,127		6,694		1			1
Business banking	10,024		513		76		328		10,941		10,299		6			6
Student and other	20		193		94		488		795		864		—			—
Total consumer, excluding credit card	22,873		14,842		12,664		12,742		63,121		62,307		7			7
Credit card	533,318		—		—		—		533,318		530,616		—			—
Total consumer	556,191		14,842		12,664		12,742		596,439		592,923		7			7
Wholesale:
Other unfunded commitments to extend credit(a)(b)	61,030		63,684		92,950		5,544		223,208		215,251		426			347
Standby letters of credit and other financial guarantees(a)(b)(c)(d)	28,383		32,434		39,039		2,158		102,014		101,899		693			696
Unused advised lines of credit	56,746		13,375		446		168		70,735		60,203		—			—
Other letters of credit(a)(d)	4,210		778		119		—		5,107		5,386		2			2
Total wholesale	150,369		110,271		132,554		7,870		401,064		382,739		1,121			1,045
Total lending-related	$	706,560	$	125,113	$	145,218	$	20,612	$	997,503	$	975,662	$	1,128		$	1,052
Other guarantees and commitments
Securities lending indemnifications(e)	$	194,641	$	—	$	—	$	—	$	194,641	$	186,077	NA			NA
Derivatives qualifying as guarantees	2,903		4,797		28,589		36,511		72,800		75,593		$	224		$	457
Unsettled reverse repurchase and securities borrowing agreements(f)	61,013		—		—		—		61,013		39,939		—			—
Loan sale and securitization-related indemnifications:
Mortgage repurchase liability(g)	NA		NA		NA		NA		NA		NA		3,516			3,557
Loans sold with recourse	NA		NA		NA		NA		10,183		10,397		142			148
Other guarantees and commitments(h)	948		292		357		4,609		6,206		6,321		(80		)	(5		)

(a) At March 31, 2012, and December 31, 2011, reflects the contractual amount net of risk participations totaling $603 million and $1.1 billion, respectively, for other unfunded commitments to extend credit; $18.7 billion and $19.8 billion, respectively, for standby letters of credit and other financial guarantees; and $934 million and $974 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.

(b) At March 31, 2012, and December 31, 2011, included credit enhancements and bond and commercial paper liquidity commitments to U.S. states and municipalities, hospitals and other not-for-profit entities of $47.9 billion and $48.6 billion, respectively. These commitments also include liquidity facilities to nonconsolidated municipal bond VIEs; for further information, see Note 15 on pages 137–144 of this Form 10-Q.

(c) At March 31, 2012, and December 31, 2011, included unissued standby letters of credit commitments of $43.5 billion and $44.1 billion, respectively.

(d) At March 31, 2012, and December 31, 2011, JPMorgan Chase held collateral relating to $42.3 billion and $41.5 billion, respectively, of standby letters of credit; and $1.2 billion and $1.3 billion, respectively, of other letters of credit.

(e) At March 31, 2012, and December 31, 2011, collateral held by the Firm in support of securities lending indemnification agreements was $195.9 billion and $186.3 billion, respectively. Securities lending collateral comprises primarily cash and securities issued by governments that are members of the Organisation for Economic Co-operation and Development (“OECD”) and U.S. government agencies.

(f) At March 31, 2012, and December 31, 2011, the amount of commitments related to forward-starting reverse repurchase agreements and securities borrowing agreements were $9.2 billion and $14.4 billion, respectively. Commitments related to unsettled reverse repurchase agreements and securities borrowing agreements with regular-way settlement periods were $51.8 billion and $25.5 billion, at March 31, 2012, and December 31, 2011, respectively.

(g) Represents the estimated mortgage repurchase liability related to indemnifications for breaches of representations and warranties in loan sale and securitization agreements. For additional information, see Loan sale and securitization-related indemnifications on page 153 of this Note.

(h) At March 31, 2012, and December 31, 2011, included unfunded commitments of $571 million and $789 million, respectively, to third-party private equity funds; and $1.6 billion and $1.5 billion, respectively, to other equity investments. These commitments included $557 million and $820 million, respectively, related to investments that are generally fair valued at net asset value as discussed in Note 3 on pages 91–100 of this Form 10-Q. In addition, at March 31, 2012, and December 31, 2011, included letters of credit hedged by derivative transactions and managed on a market risk basis of $3.9 billion and $3.9 billion, respectively.

(i) For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value. For all other products the carrying value represents the valuation reserve.

Standby letters of credit and other financial guarantees and other letters of credit

The following table summarizes the types of facilities under which standby letters of credit and other letters of credit arrangements are outstanding by the ratings profiles of the Firm’s customers, as of March 31, 2012, and December 31, 2011.

Standby letters of credit, other financial guarantees and other letters of credit

	March 31, 2012						December 31, 2011
(in millions)	Standby letters of credit and other financial guarantees				Other letters of credit		Standby letters of credit and other financial guarantees				Other letters of credit
Investment-grade(a)		$	79,149		$	3,558		$	78,884		$	4,105
Noninvestment-grade(a)		22,865			1,549			23,015			1,281
Total contractual amount(b)		$	102,014	(c)	$	5,107		$	101,899	(c)	$	5,386
Allowance for lending-related commitments		$	315		$	2		$	317		$	2
Commitments with collateral		42,263			1,201			41,529			1,264

(a) The ratings scale is based on the Firm’s internal ratings which generally correspond to ratings as defined by S&P and Moody’s.

(b) At March 31, 2012, and December 31, 2011, reflects the contractual amount net of risk participations totaling $18.7 billion and $19.8 billion, respectively, for standby letters of credit and other financial guarantees; and $934 million and $974 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.

(c) At March 31, 2012, and December 31, 2011, included unissued standby letters of credit commitments of $43.5 billion and $44.1 billion, respectively.

Summary of changes in mortgage repurchase liability

The following table summarizes the change in the mortgage repurchase liability for each of the periods presented.

Summary of changes in mortgage repurchase liability(a)
Three months ended March 31, (in millions)	2012				2011
Repurchase liability at beginning of period	$	3,557			$	3,285
Realized losses(b)	(364		)		(231		)
Provision(c)	323				420
Repurchase liability at end of period	$	3,516		(d)	$	3,474

(a) Mortgage repurchase demands associated with private-label securitizations are separately evaluated by the Firm in establishing its litigation reserves.

(b) Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expense. For the three months ended March 31, 2012 and 2011, make-whole settlements were and $186 million and $115 million, respectively.

(c) Primarily relates to increases in estimated probable future repurchase demands. Also includes $27 million and $13 million of provision related to new loan sales for the three months ended March 31, 2012 and 2011, respectively.

(d) Includes $32 million at March 31, 2012, related to future repurchase demands on loans sold by Washington Mutual to the GSEs.