Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2011

Derivatives and Hedging Activities (Tables) [Abstract]

Schedule of derivative instruments in statement of financial position, fair value

The following table summarizes the total gross fair value, excluding interest accruals, of derivative assets and liabilities as of June 30, 2011 and December 31, 2010:

		Other Assets				Other Liabilities
		Fair Value				Fair Value
(Millions)		2011		2010		2011		2010
Derivatives designated as hedging instruments:
Interest rate contracts
	Fair value hedges	$	864	$	909	$	9	$	38
	Cash flow hedges		―		2		―		13
Foreign exchange contracts
	Net investment hedges		141		66		100		272
Total derivatives designated as hedging instruments		$	1,005	$	977	$	109	$	323
Derivatives not designated as hedging instruments:
	Interest rate contracts	$	2	$	3	$	3	$	3
	Foreign exchange contracts, including certain embedded derivatives(a)		64		109		90		91
	Equity-linked embedded derivative(b)		―		―		2		2
Total derivatives not designated as hedging instruments			66		112		95		96
Total derivatives(c)		$	1,071	$	1,089	$	204	$	419

(a) Includes foreign currency derivatives embedded in certain operating agreements.

(b) Represents an equity-linked derivative embedded in one of the Company's investment securities.

(c) GAAP permits the netting of derivative assets and derivative liabilities when a legally enforceable master netting agreement exists between the Company and its derivative counterparty. As of June 30, 2011 and December 31, 2010, $21million and $18 million, respectively, of derivative assets and liabilities have been offset and presented net on the Consolidated Balance Sheets.

Effect of fair value hedges on results of operations

The following table summarizes the impact on the Consolidated Statements of Income associated with the Company's hedges of fixed-rate long-term debt:

For the Three Months Ended June 30:
(Millions)	Gains (losses) recognized in income
	Derivative contract					Hedged item					Net hedge
	Location	Amount				Location	Amount				ineffectiveness
Derivative relationship		2011		2010			2011		2010		2011		2010
Interest rate contracts	Other, net expenses	$	142	$	289	Other, net expenses	$	(138)	$	(252)	$	4	$	37

For the Six Months Ended June 30:
(Millions)	Gains (losses) recognized in income
	Derivative contract					Hedged item					Net hedge
	Location	Amount				Location	Amount				ineffectiveness
Derivative relationship		2011		2010			2011		2010		2011		2010
Interest rate contracts	Other, net expenses	$	(16)	$	413	Other, net expenses	$	1	$	(367)	$	(15)	$	46

Impact of cash flow hedges and investment hedges on Consolidated Statement of Income

The following table summarizes the impact of cash flow hedges and net investment hedges on the Consolidated Statements of Income:

For the Three Months Ended June 30:
(Millions)		Gains (losses) recognized in income
			Amount reclassified
			from AOCI into					Net hedge
			income					ineffectiveness
		Location	2011		2010		Location	2011		2010
Cash flow hedges:(a)
	Interest rate contracts	Interest expense	$	(5)	$	(8)	Other, net expenses	$	―	$	―
Net investment hedges:
	Foreign exchange contracts	Other, net expenses	$	―	$	―	Other, net expenses	$	―	$	―

For the Six Months Ended June 30:
(Millions)		Gains (losses) recognized in income
			Amount reclassified
			from AOCI into					Net hedge
			income					ineffectiveness
		Location	2011		2010		Location	2011		2010
Cash flow hedges:(a)
	Interest rate contracts	Interest expense	$	(13)	$	(21)	Other, net expenses	$	―	$	―
Net investment hedges:
	Foreign exchange contracts	Other, net expenses	$	―	$	―	Other, net expenses	$	(3)	$	―

(a) During the three and six months endedJune 30, 2011 and 2010, there were no forecasted transactionsthat were considered no longer probable to occur.

Derivative instruments gain loss recognized in income

The following table summarizes the impact of derivatives not designated as hedges on the Consolidated Statements of Income:

For the Three Months Ended June 30:
(Millions)	Gains (losses) recognized in income
	Location	Amount
		2011		2010
Interest rate contracts	Other, net expenses	$	―	$	(13)
Foreign exchange contracts(a)	Interest and dividends on investment securities		3		―
	Interest expense on short-term borrowings		2		2
	Interest expense on long-term debt and other		31		23
	Other, net expenses		(68)		(22)
Equity-linked contract	Other non-interest revenues		(1)		(1)
Total		$	(33)	$	(11)

For the Six Months Ended June 30:
(Millions)	Gains (losses) recognized in income
	Location	Amount
		2011		2010
Interest rate contracts	Other, net expenses	$	2	$	(14)
Foreign exchange contracts(a)	Interest and dividends on investment securities		5		1
	Interest expense on short-term borrowings		3		4
	Interest expense on long-term debt and other		61		42
	Other, net expenses		(49)		(54)
Equity-linked contract	Other non-interest revenues		―		(1)
Total		$	22	$	(22)

(a) For the three and six months endedJune 30, 2011 and 2010, foreign exchange contracts include embedded foreign currency derivatives. Gains (losses) on these embedded derivatives are included in other, net expenses.