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Off-Balance Sheet Lending-Related Financial Instruments, Guarantees and Other Commitments (Tables)
 6 Months Ended
Jun. 30, 2013
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 June 30, 2013, and December 31, 2012. The amounts in the table below for lending-related commitments represent the total available credit, inclusive of certain non-legally binding lines of credit. 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 these non-legally binding 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(g)
 
Jun 30, 2013
Dec 31,
2012
 
Jun 30,
2013
Dec 31,
2012
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
$
2,501

$
4,609

$
4,764

$
2,348

$
14,222

$
15,180

 
$
—

$
—

Home equity – junior lien
4,128

7,366

5,815

2,456

19,765

21,796

 
—

—

Prime mortgage
7,701

—

—

—

7,701

4,107

 
—

—

Subprime mortgage
—

—

—

—

—

—

 
—

—

Auto
8,194

227

146

29

8,596

7,185

 
1

1

Business banking
10,225

595

98

375

11,293

11,092

 
7

6

Student and other
108

144

5

469

726

796

 
—

—

Total consumer, excluding credit card
32,857

12,941

10,828

5,677

62,303

60,156

 
8

7

Credit card
532,359

—

—

—

532,359

533,018

 
—

—

Total consumer
565,216

12,941

10,828

5,677

594,662

593,174

 
8

7

Wholesale:
 
 
 
 
 
 
 
 
 
Other unfunded commitments to extend credit(a)(b)
61,810

83,940

99,091

6,284

251,125

243,225

 
455

377

Standby letters of credit and other financial guarantees(a)(b)(c)
26,108

32,013

35,514

1,463

95,098

100,929

 
634

647

Unused advised lines of credit
80,776

11,740

822

372

93,710

85,087

 
—

—

Other letters of credit(a)
4,308

1,112

58

61

5,539

5,573

 
2

2

Total wholesale
173,002

128,805

135,485

8,180

445,472

434,814

 
1,091

1,026

Total lending-related
$
738,218

$
141,746

$
146,313

$
13,857

$
1,040,134

$
1,027,988

 
$
1,099

$
1,033

Other guarantees and commitments
 
 
 
 
 
 
 
 
 
Securities lending indemnification agreements and guarantees(d)
$
189,113

$
—

$
—

$
—

$
189,113

$
166,493

 
NA

NA

Derivatives qualifying as guarantees
1,386

1,280

16,942

37,297

56,905

61,738

 
$
115

$
42

Unsettled reverse repurchase and securities borrowing agreements(e)
56,657

—

—

—

56,657

34,871

 
—

—

Loan sale and securitization-related indemnifications:
 
 
 
 
 
 
 
 
 
Mortgage repurchase liability
 NA

 NA

 NA

 NA

NA

NA

 
2,476

2,811

Loans sold with recourse
 NA

 NA

 NA

 NA

8,600

9,305

 
140

141

Other guarantees and commitments(f)
554

327

1,472

4,248

6,601

6,780

 
(108
)
(75
)
(a)
At June 30, 2013, and December 31, 2012, reflects the contractual amount net of risk participations totaling $406 million and $473 million, respectively, for other unfunded commitments to extend credit; $15.8 billion and $16.6 billion, respectively, for standby letters of credit and other financial guarantees; and $609 million and $690 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(b)
At June 30, 2013, and December 31, 2012, included credit enhancements and bond and commercial paper liquidity commitments to U.S. states and municipalities, hospitals and other nonprofit entities of $39.9 billion and $44.5 billion, respectively. These commitments also include liquidity facilities to nonconsolidated municipal bond VIEs; for further information, see Note 15 on pages 177–184 of this Form 10-Q.
(c)
At June 30, 2013, and December 31, 2012, included unissued standby letters of credit commitments of $42.6 billion and $44.4 billion, respectively.
(d)
At June 30, 2013, and December 31, 2012, collateral held by the Firm in support of securities lending indemnification agreements was $189.9 billion and $165.1 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.
(e)
At June 30, 2013, and December 31, 2012, the amount of commitments related to forward-starting reverse repurchase agreements and securities borrowing agreements were $11.1 billion and $13.2 billion, respectively. Commitments related to unsettled reverse repurchase agreements and securities borrowing agreements with regular-way settlement periods were $45.6 billion and $21.7 billion, at June 30, 2013, and December 31, 2012, respectively.
(f)
At June 30, 2013, and December 31, 2012, included unfunded commitments of $251 million and $370 million, respectively, to third-party private equity funds; and $1.5 billion, for both periods, to other equity investments. These commitments included $225 million and $333 million, respectively, related to investments that are generally fair valued at net asset value as discussed in Note 3 on pages 114–127 of this Form 10-Q. In addition, at June 30, 2013, and December 31, 2012, included letters of credit hedged by derivative transactions and managed on a market risk basis of $4.6 billion and $4.5 billion, respectively.
(g)
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.
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 June 30, 2013, and December 31, 2012.
Standby letters of credit, other financial guarantees and other letters of credit
 
June 30, 2013
 
December 31, 2012
(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)
 
$
72,107

 
$
4,329

 
 
$
77,081

 
$
3,998

Noninvestment-grade(a)
 
22,991

 
1,210

 
 
23,848

 
1,575

Total contractual amount
 
$
95,098

 
$
5,539

 
 
$
100,929

 
$
5,573

Allowance for lending-related commitments
 
$
288

 
$
2

 
 
$
282

 
$
2

Commitments with collateral
 
41,002

 
1,498

 
 
42,654

 
1,145

(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.
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 June 30,
 
Six months ended June 30,
(in millions)
2013
 
2012
 
2013
 
2012
Repurchase liability at beginning of period
$
2,674

 
$
3,516

 
$
2,811

 
$
3,557

Net realized losses(b)
(191
)
 
(259
)
 
(403
)
 
(623
)
Provision for repurchase losses(c)
(7
)
 
36

 
68

 
359

Repurchase liability at end of period
$
2,476

 
$
3,293

 
$
2,476

 
$
3,293

(a)
All mortgage repurchase demands associated with private-label securitizations are separately evaluated by the Firm in establishing its litigation reserves.
(b)
Realized repurchase losses are presented net of third-party recoveries and include principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expense. Make-whole settlements were $133 million and $107 million for the three months ended June 30, 2013 and 2012, respectively and $254 million and $293 million for the six months ended June 30, 2013 and 2012, respectively.
(c)
Included $6 million and $28 million of provision related to new loan sales for the three months ended June 30, 2013 and 2012, respectively and $14 million and $55 million of provision related to new loan sales for the six months ended June 30, 2013 and 2012, respectively.