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.

The following table presents the components of interest income and interest expense:



Year ended December 31, (in millions)	2016			2015			2014
Interest Income
Loans^(a)	$	36,634		$	33,134		$	32,218
Taxable securities	5,538			6,550			7,617
Non taxable securities^(b)	1,766			1,706			1,423
Total securities	7,304			8,256			9,040
Trading assets	7,292			6,621			7,312
Federal funds sold and securities purchased under resale agreements	2,265			1,592			1,642
Securities borrowed^(c)	(332		)	(532		)	(501		)
Deposits with banks	1,863			1,250			1,157
Other assets^(d)	875			652			663
Total interest income	$	55,901		$	50,973		$	51,531
Interest expense
Interest bearing deposits	$	1,356		$	1,252		$	1,633
Federal funds purchased and securities loaned or sold under repurchase agreements	1,089			609			604
Commercial paper	135			110			134
Trading liabilities - debt, short-term and other liabilities^(e)	1,170			622			712
Long-term debt	5,564			4,435			4,409
Beneficial interest issued by consolidated VIEs	504			435			405
Total interest expense	$	9,818		$	7,463		$	7,897
Net interest income	$	46,083		$	43,510		$	43,634
Provision for credit losses	5,361			3,827			3,139
Net interest income after provision for credit losses	$	40,722		$	39,683		$	40,495


(a)	Includes the amortization of purchase price discounts or premiums, as well as net deferred loan fees or costs.


(b)	Represents securities that are tax exempt for U.S. federal income tax purposes.


(c)	Securities borrowed’s negative interest income, for the years ended December 31, 2016, 2015 and 2014, is a result of client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense.


(d)	Largely margin loans.


(e)	Includes brokerage customer payables.

Interest income and interest expense includes the current-period interest accruals for financial instruments measured at fair value, except for derivatives and 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.