FEDERAL FUNDS, SECURITIES BORROWED, LOANED AND SUBJECT TO REPURCHASE AGREEMENTS

Federal funds sold and securities borrowed or purchased under agreements to resell, at their respective carrying values, consisted of the following:



In millions of dollars	March 31, 2016		December 31, 2015
Federal funds sold	$	—	$	25
Securities purchased under agreements to resell	121,819		119,777
Deposits paid for securities borrowed	103,274		99,873
Total	$	225,093	$	219,675

Federal funds purchased and securities loaned or sold under agreements to repurchase, at their respective carrying values, consisted of the following:



In millions of dollars	March 31, 2016		December 31, 2015
Federal funds purchased	$	376	$	189
Securities sold under agreements to repurchase	140,267		131,650
Deposits received for securities loaned	16,565		14,657
Total	$	157,208	$	146,496

The resale and repurchase agreements represent collateralized financing transactions. The Company executes these transactions primarily through its broker-dealer subsidiaries to facilitate customer matched-book activity and to efficiently fund a portion of the Company’s trading inventory. Transactions executed by the Company’s bank subsidiaries primarily facilitate customer financing activity.

To maintain reliable funding under a wide range of market conditions, including under periods of stress, Citi manages these activities by taking into consideration the quality of the underlying collateral and stipulating financing tenor. Citi manages the risks in its collateralized financing transactions by conducting daily stress tests to account for changes in capacity, tenors, haircut, collateral profile and client actions. Additionally, Citi maintains counterparty diversification by establishing concentration triggers and assessing counterparty reliability and stability under stress.

It is the Company’s policy to take possession of the underlying collateral, monitor its market value relative to the amounts due under the agreements and, when necessary, require prompt transfer of additional collateral in order to maintain contractual margin protection. For resale and repurchase agreements, when necessary, the Company posts additional collateral in order to maintain contractual margin protection.

Collateral typically consists of government and government-agency securities, corporate and municipal bonds, equities, and mortgage-backed and other asset-backed securities.

The resale and repurchase agreements are generally documented under industry standard agreements that allow the prompt close-out of all transactions (including the liquidation of securities held) and the offsetting of obligations to return cash or securities by the non-defaulting party, following a payment default or other type of default under the relevant master agreement. Events of default generally include (i) failure to deliver cash or securities as required under the transaction, (ii) failure to provide or return cash or securities as used for margining purposes, (iii) breach of representation, (iv) cross-default to another transaction entered into among the parties, or, in some cases, their affiliates, and (v) a repudiation of obligations under the agreement. The counterparty that receives the securities in these transactions is generally unrestricted in its use of the securities, with the exception of transactions executed on a tri-party basis, where the collateral is maintained by a custodian and operational limitations may restrict its use of the securities.

A substantial portion of the resale and repurchase agreements is recorded at fair value, as described in Notes 22 and 23 to the Consolidated Financial Statements. The remaining portion is carried at the amount of cash initially advanced or received, plus accrued interest, as specified in the respective agreements.

The securities borrowing and lending agreements also represent collateralized financing transactions similar to the resale and repurchase agreements. Collateral typically consists of government and government-agency securities and corporate debt and equity securities.

Similar to the resale and repurchase agreements, securities borrowing and lending agreements are generally documented under industry standard agreements that allow the prompt close-out of all transactions (including the liquidation of securities held) and the offsetting of obligations to return cash or securities by the non-defaulting party, following a payment default or other default by the other party under the relevant master agreement. Events of default and rights to use securities under the securities borrowing and lending agreements are similar to the resale and repurchase agreements referenced above.

A substantial portion of securities borrowing and lending agreements is recorded at the amount of cash advanced or received. The remaining portion is recorded at fair value as the Company elected the fair value option for certain securities borrowed and loaned portfolios, as described in Note 23 to the Consolidated Financial Statements. With respect to securities loaned, the Company receives cash collateral in an amount generally in excess of the market value of the securities loaned. The Company monitors the market value of securities borrowed and securities loaned on a daily basis and obtains or posts additional collateral in order to maintain contractual margin protection.

The enforceability of offsetting rights incorporated in the master netting agreements for resale and repurchase agreements and securities borrowing and lending agreements is evidenced to the extent that a supportive legal opinion has been obtained from counsel of recognized standing that provides the requisite level of certainty regarding the enforceability of these agreements, and that the exercise of rights by the non-defaulting party to terminate and close-out transactions on a net basis under these agreements will not be stayed or avoided under applicable law upon an event of default including bankruptcy, insolvency or similar proceeding.

A legal opinion may not have been sought or obtained for certain jurisdictions where local law is silent or sufficiently ambiguous to determine the enforceability of offsetting rights or where adverse case law or conflicting regulation may cast doubt on the enforceability of such rights. In some jurisdictions and for some counterparty types, the insolvency law for a particular counterparty type may be nonexistent or unclear as overlapping regimes may exist. For example, this may be the case for certain sovereigns, municipalities, central banks and U.S. pension plans.

The following tables present the gross and net resale and repurchase agreements and securities borrowing and lending

agreements and the related offsetting amount permitted under ASC 210-20-45. The tables also include amounts related to financial instruments that are not permitted to be offset under ASC 210-20-45 but would be eligible for offsetting to the extent that an event of default occurred and a legal opinion supporting enforceability of the offsetting rights has been obtained. Remaining exposures continue to be secured by financial collateral, but the Company may not have sought or been able to obtain a legal opinion evidencing enforceability of the offsetting right.



	As of March 31, 2016
In millions of dollars	Gross amounts of recognized assets		Gross amounts offset on the Consolidated Balance Sheet⁽¹⁾		Net amounts of assets included on the Consolidated Balance Sheet⁽²⁾		Amounts not offset on the Consolidated Balance Sheet but eligible for offsetting upon counterparty default⁽³⁾		Net amounts⁽⁴⁾
Securities purchased under agreements to resell	$	177,767	$	55,948	$	121,819	$	87,866	$	33,953
Deposits paid for securities borrowed	103,274		—		103,274		16,291		86,983
Total	$	281,041	$	55,948	$	225,093	$	104,157	$	120,936



In millions of dollars	Gross amounts of recognized liabilities		Gross amounts offset on the Consolidated Balance Sheet⁽¹⁾		Net amounts of liabilities included on the Consolidated Balance Sheet⁽²⁾		Amounts not offset on the Consolidated Balance Sheet but eligible for offsetting upon counterparty default⁽³⁾		Net amounts⁽⁴⁾
Securities sold under agreements to repurchase	$	196,215	$	55,948	$	140,267	$	67,435	$	72,832
Deposits received for securities loaned	16,565		—		16,565		3,843		12,722
Total	$	212,780	$	55,948	$	156,832	$	71,278	$	85,554



	As of December 31, 2015
In millions of dollars	Gross amounts of recognized assets		Gross amounts offset on the Consolidated Balance Sheet⁽¹⁾		Net amounts of assets included on the Consolidated Balance Sheet⁽²⁾		Amounts not offset on the Consolidated Balance Sheet but eligible for offsetting upon counterparty default⁽³⁾		Net amounts⁽⁴⁾
Securities purchased under agreements to resell	$	176,167	$	56,390	$	119,777	$	92,039	$	27,738
Deposits paid for securities borrowed	99,873		—		99,873		16,619		83,254
Total	$	276,040	$	56,390	$	219,650	$	108,658	$	110,992



In millions of dollars	Gross amounts of recognized liabilities		Gross amounts offset on the Consolidated Balance Sheet⁽¹⁾		Net amounts of liabilities included on the Consolidated Balance Sheet⁽²⁾		Amounts not offset on the Consolidated Balance Sheet but eligible for offsetting upon counterparty default⁽³⁾		Net amounts⁽⁴⁾
Securities sold under agreements to repurchase	$	188,040	$	56,390	$	131,650	$	60,641	$	71,009
Deposits received for securities loaned	14,657		—		14,657		3,226		11,431
Total	$	202,697	$	56,390	$	146,307	$	63,867	$	82,440


(1)	Includes financial instruments subject to enforceable master netting agreements that are permitted to be offset under ASC 210-20-45.


(2)	The total of this column for each period excludes Federal funds sold/purchased. See tables above.


(3)	Includes financial instruments subject to enforceable master netting agreements that are not permitted to be offset under ASC 210-20-45, but would be eligible for offsetting to the extent that an event of default has occurred and a legal opinion supporting enforceability of the offsetting right has been obtained.


(4)	Remaining exposures continue to be secured by financial collateral, but the Company may not have sought or been able to obtain a legal opinion evidencing enforceability of the offsetting right.

The following tables present the gross amount of liabilities associated with repurchase agreements and securities lending agreements, by remaining contractual maturity:



	As of March 31, 2016
In millions of dollars	Open and overnight		Up to 30 days		31–90 days		Greater than 90 days		Total
Securities sold under agreements to repurchase	$	106,370	$	46,934	$	17,933	$	24,978	$	196,215
Deposits received for securities loaned	12,199		785		1,506		2,075		16,565
Total	$	118,569	$	47,719	$	19,439	$	27,053	$	212,780



	As of December 31, 2015
In millions of dollars	Open and overnight		Up to 30 days		31–90 days		Greater than 90 days		Total
Securities sold under agreements to repurchase	$	89,732	$	54,336	$	21,541	$	22,431	$	188,040
Deposits received for securities loaned	9,096		1,823		2,324		1,414		14,657
Total	$	98,828	$	56,159	$	23,865	$	23,845	$	202,697

The following tables present the gross amount of liabilities associated with repurchase agreements and securities lending agreements, by class of underlying collateral:



	As of March 31, 2016
In millions of dollars	Repurchase agreements		Securities lending agreements		Total
U.S. Treasury and federal agency	$	78,972	$	16	$	78,988
State and municipal	414		—		414
Foreign government	62,520		499		63,019
Corporate bonds	16,596		1,220		17,816
Equity securities	9,707		14,802		24,509
Mortgage-backed securities	18,712		—		18,712
Asset-backed securities	4,941		—		4,941
Other	4,353		28		4,381
Total	$	196,215	$	16,565	$	212,780



	As of December 31, 2015
In millions of dollars	Repurchase agreements		Securities lending agreements		Total
U.S. Treasury and federal agency	$	67,005	$	—	$	67,005
State and municipal	403		—		403
Foreign government	66,633		789		67,422
Corporate bonds	15,355		1,085		16,440
Equity securities	10,297		12,484		22,781
Mortgage-backed securities	19,913		—		19,913
Asset-backed securities	4,572		—		4,572
Other	3,862		299		4,161
Total	$	188,040	$	14,657	$	202,697