Interest Income and Interest Expense

12 Months Ended

Dec. 31, 2012

Interest Income (Expense), Net [Abstract]

INTEREST INCOME AND INTEREST EXPENSE

Interest income and Interest expense

Interest income and interest expense is recorded in the Consolidated Statements of Income and classified based on the nature of the underlying asset or liability. Interest income and interest expense includes the current-period interest accruals for financial instruments measured at fair value, except for financial instruments containing embedded derivatives that would be separately accounted for in accordance with U.S. GAAP absent the fair value option election; for those instruments, all changes in fair value, including any interest elements, are reported in principal transactions revenue. For financial instruments that are not measured at fair value, the related interest is included within interest income or interest expense, as applicable.

Details of interest income and interest expense were as follows.

Year ended December 31, (in millions)	2012				2011		2010
Interest income
Loans	$	35,832			$	37,098	$	40,388
Securities	7,939				9,215		9,540
Trading assets	9,039				11,142		11,007
Federal funds sold and securities purchased under resale agreements	2,442				2,523		1,786
Securities borrowed	(3		)	(c)	110		175
Deposits with banks	555				599		345
Other assets(a)	259				606		541
Total interest income	56,063				61,293		63,782
Interest expense
Interest-bearing deposits	2,655				3,855		3,424
Short-term and other liabilities(b)	1,788				2,873		2,364
Long-term debt	6,062				6,109		5,848
Beneficial interests issued by consolidated VIEs	648				767		1,145
Total interest expense	11,153				13,604		12,781
Net interest income	44,910				47,689		51,001
Provision for credit losses	3,385				7,574		16,639
Net interest income after provision for credit losses	$	41,525			$	40,115	$	34,362

(a) Largely margin loans.

(b) Includes brokerage customer payables.

(c) Negative interest income for the year ended December 31, 2012, is a result of increased client-driven demand for certain securities combined with the impact of low interest rates; the offset of this matched book activity is reflected as lower net interest expense reported within short-term and other liabilities.