Interest income and Interest expense

Interest income and interest expense are 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)	2014			2013			2012
Interest income
Loans	$	32,218		$	33,489		$	35,832
Taxable securities	7,617			6,916			7,231
Non-taxable securities^(a)	1,423			896			708
Total securities	9,040			7,812			7,939
Trading assets^(b)	7,312			8,099			8,929
Federal funds sold and securities purchased under resale agreements	1,642			1,940			2,442
Securities borrowed ^(c)	(501		)	(127		)	(3		)
Deposits with banks	1,157			918			555
Other assets^(d)	663			538			259
Total interest income^(b)	51,531			52,669			55,953
Interest expense
Interest-bearing deposits	1,633			2,067			2,655
Short-term and other liabilities^(b)(e)	1,450			1,798			1,678
Long-term debt	4,409			5,007			6,062
Beneficial interests issued by consolidated VIEs	405			478			648
Total interest expense^(b)	7,897			9,350			11,043
Net interest income	43,634			43,319			44,910
Provision for credit losses	3,139			225			3,385
Net interest income after provision for credit losses	$	40,495		$	43,094		$	41,525


(a)	Represents securities which are tax exempt for U.S. Federal Income Tax purposes.


(b)	Prior period amounts have been reclassified to conform with the current period presentation.


(c)	Negative interest income for the years ended December 31, 2014, 2013 and 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.


(d)	Largely margin loans.


(e)	Includes brokerage customer payables.