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Derivative Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments
The following table presents the fair value of derivative contracts by major product type on a gross basis. Gross fair values exclude the effects of both counterparty netting as well as collateral, and therefore are not representative of our exposure. The table below presents the amounts of counterparty netting and cash collateral that have been offset in the consolidated balance sheet, as well as cash and securities collateral posted and received under enforceable credit support agreements that do not meet the criteria for netting. Derivative assets and liabilities which are not subject to an enforceable master netting agreement, or are subject to a netting agreement that we have not yet determined to be enforceable, have not been netted in the table below. Where we have received or posted collateral under credit support agreements, but have not yet determined such agreements are enforceable, the related collateral also has not been netted in the table below.
 
September 30, 2014
 
December 31, 2013
 
Derivative assets
 
Derivative liabilities
 
Derivative assets
 
Derivative liabilities
 
(in millions)
Derivatives accounted for as fair value hedges(1)
 
 
 
 
 
 
 
OTC-cleared(2)
$
15

 
$
117

 
$
75

 
$
20

Bilateral OTC(2)
45

 
205

 
203

 
192

Interest rate contracts
60

 
322

 
278

 
212

 
 
 
 
 
 
 
 
Derivatives accounted for as cash flow hedges(1)
 
 
 
 
 
 
 
Bilateral OTC(2)
26

 
(1
)
 
—

 
3

Foreign exchange contracts
26

 
(1
)
 
—

 
3

 
 
 
 
 
 
 
 
OTC-cleared(2)
7

 
—

 
16

 
—

Bilateral OTC(2)
3

 
112

 
16

 
62

Interest rate contracts
10

 
112

 
32

 
62

 
 
 
 
 
 
 
 
Total derivatives accounted for as hedges
96

 
433

 
310

 
277

 
 
 
 
 
 
 
 
Trading derivatives not accounted for as hedges(3)
 
 
 
 
 
 
 
Exchange-traded(2)
39

 
33

 
82

 
32

OTC-cleared(2)
12,179

 
13,178

 
24,218

 
25,468

Bilateral OTC(2)
27,794

 
27,366

 
31,097

 
30,451

Interest rate contracts
40,012

 
40,577

 
55,397

 
55,951

 
 
 
 
 
 
 
 
Exchange-traded(2)
—

 
9

 
7

 
16

Bilateral OTC(2)
18,033

 
17,151

 
15,422

 
14,565

Foreign exchange contracts
18,033

 
17,160

 
15,429

 
14,581

 
 
 
 
 
 
 
 
Equity contract - bilateral OTC(2)
1,423

 
1,420

 
1,413

 
1,412

 
 
 
 
 
 
 
 
Exchange-traded(2)
203

 
5

 
181

 
6

Bilateral OTC(2)
1,306

 
754

 
1,402

 
815

Precious metals contracts
1,509

 
759

 
1,583

 
821

 
 
 
 
 
 
 
 
OTC-cleared(2)
458

 
514

 
576

 
604

Bilateral OTC(2)
3,819

 
3,696

 
4,079

 
4,104

Credit contracts
4,277

 
4,210

 
4,655

 
4,708

 
 
 
 
 
 
 
 
Other derivatives not accounted for as hedges(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts - bilateral OTC(2)
619

 
79

 
470

 
91

 
 
 
 
 
 
 
 
Foreign exchange contracts - bilateral OTC(2)
—

 
38

 
—

 
44

 
 
 
 
 
 
 
 
Equity contracts - bilateral OTC(2)
703

 
190

 
789

 
148

 
 
 
 
 
 
 
 
Precious metals contracts - bilateral OTC(2)
—

 
30

 
—

 
36

 
 
 
 
 
 
 
 
Credit contracts - bilateral OTC(2)
30

 
10

 
9

 
11

 
 
 
 
 
 
 
 
Total derivatives
66,702

 
64,906

 
80,055

 
78,080

 
 
 
 
 
 
 
 
Less: Gross amounts of receivable / payable subject to enforceable master netting agreements(4)(6)
56,849

 
56,849

 
68,616

 
68,616

Less: Gross amounts of cash collateral received / posted subject to enforceable master netting agreements(5)(6)
3,759

 
1,725

 
3,870

 
2,116

Net amounts of derivative assets / liabilities presented in the balance sheet
6,094

 
6,332

 
7,569

 
7,348

 
 
 
 
 
 
 
 
Less: Gross amounts of financial instrument collateral received / posted subject to enforceable master netting agreements but not offset in the consolidated balance sheet
1,399

 
2,652

 
1,641

 
3,094

Net amounts of derivative assets / liabilities
$
4,695

 
$
3,680

 
$
5,928

 
$
4,254

 
(1) 
Derivative assets / liabilities related to cash flow hedges, fair value hedges and derivative instruments held for purposes other than for trading are recorded in other assets / interest, taxes and other liabilities on the consolidated balance sheet.
(2) 
Over-the-counter (OTC) derivatives include derivatives executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house. The credit risk associated with bilateral OTC derivatives is managed through master netting agreements and obtaining collateral. OTC-cleared derivatives are executed bilaterally in the OTC market but then novated to a central clearing counterparty, whereby the central clearing counterparty becomes the counterparty to both of the original counterparties. Exchange traded derivatives are executed directly on an organized exchange that provides pre-trade price transparency. Credit risk is minimized for OTC-cleared derivatives and exchange traded derivatives through daily margining required by central clearing counterparties.
(3) 
Trading related derivative assets/liabilities are recorded in trading assets/trading liabilities on the consolidated balance sheet.
(4) 
Represents the netting of derivative receivable and payable balances for the same counterparty under enforceable netting agreements.
(5) 
Represents the netting of cash collateral posted and received by counterparty under enforceable credit support agreements.
(6) 
Netting is performed at a counterparty level in cases where enforceable master netting and credit support agreements are in place, regardless of the type of derivative instrument. Therefore, we have not attempted to allocate netting to the different types of derivative instruments shown in the table above.
Derivative Instruments, Gain (Loss)
The following table presents information on gains and losses on derivative instruments designated and qualifying as hedging instruments in fair value hedges and the hedged items in fair value hedges and their location on the consolidated statement of income:
 
Gain (Loss) on Derivative
 
Gain (Loss) on Hedged Items
 
Net Ineffective Gain (Loss) Recognized
  
Interest Income
(Expense)
 
Other Income
 
Interest Income
(Expense)
 
Other Income
 
Other Income
 
(in millions)
Three Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
Interest rate contracts/AFS Securities
$
(61
)
 
$
10

 
$
90

 
$
(10
)
 
$
—

Interest rate contracts/subordinated debt
2

 
—

 
—

 
—

 
—

Total
$
(59
)
 
$
10

 
$
90

 
$
(10
)
 
$
—

 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
Interest rate contracts/AFS Securities
$
(56
)
 
$
42

 
$
112

 
$
(39
)
 
$
3

Interest rate contracts/subordinated debt
4

 
—

 
(15
)
 
1

 
1

Total
$
(52
)
 
$
42

 
$
97

 
$
(38
)
 
$
4

 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
Interest rate contracts/AFS Securities
$
(188
)
 
$
(396
)
 
$
289

 
$
391

 
$
(5
)
Interest rate contracts/subordinated debt
7

 
(1
)
 
(16
)
 
1

 
—

Total
$
(181
)
 
$
(397
)
 
$
273

 
$
392

 
$
(5
)
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
Interest rate contracts/AFS Securities
$
(168
)
 
$
609

 
$
337

 
$
(593
)
 
$
16

Interest rate contracts/subordinated debt
12

 
(1
)
 
(46
)
 
1

 
—

Total
$
(156
)
 
$
608

 
$
291

 
$
(592
)
 
$
16

The following table presents information on gains and losses on derivative instruments held for non-qualifying hedging activities and their locations on the consolidated statement of income:
 
Location of Gain (Loss)
Recognized in Income on Derivatives
Amount of Gain (Loss) Recognized in Income on Derivatives
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
(in millions)
Interest rate contracts
Gain (loss) on instruments designated at fair value and related derivatives
$
42

 
$
(15
)
 
$
269

 
$
(253
)
Interest rate contracts
Residential mortgage banking revenue
—

 
(9
)
 
—

 
(5
)
Foreign exchange contracts
Gain (loss) on instruments designated at fair value and related derivatives
5

 
(2
)
 
18

 
(57
)
Equity contracts
Gain (loss) on instruments designated at fair value and related derivatives
(67
)
 
234

 
272

 
474

Precious metals contracts
Gain (loss) on instruments designated at fair value and related derivatives
(12
)
 
42

 
12

 
—

Credit contracts
Gain (loss) on instruments designated at fair value and related derivatives
(1
)
 
(1
)
 
—

 
—

Credit contracts
Other income
3

 
(3
)
 
(8
)
 
—

Total
 
$
(30
)
 
$
246

 
$
563

 
$
159
Gains and Losses on Derivative Instruments Designated and Qualifying as Hedging Instruments in Cash Flow Hedges
The following table presents information on gains and losses on derivative instruments designated and qualifying as hedging instruments in cash flow hedges (including amounts recognized in AOCI from all terminated cash flow hedges) and their locations on the consolidated statement of income:
 
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)
 
Location of Gain
(Loss) Reclassified
from AOCI
into Income (Effective Portion)
 
Gain (Loss)
Reclassed
From AOCI
into Income
(Effective
Portion)
 
Location of Gain
(Loss)
Recognized
in Income
on the Derivative
(Ineffective Portion and
Amount Excluded from Effectiveness Testing)
 
Gain (Loss)
Recognized
in Income
on the
Derivative
(Ineffective
Portion)
 
2014
 
2013
 
 
2014
 
2013
 
 
2014
 
2013
 
(in millions)
Three Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
$
1

 
$
2

 
Interest income (expense)
 
$
—

 
$
—

 
Other income
 
$
—

 
$
—

Interest rate contracts
(11
)
 
32

 
Interest income (expense)
 
(2
)
 
(2
)
 
Other income
 
—

 
—

Total
$
(10
)
 
$
34

 
 
 
$
(2
)
 
$
(2
)
 
 
 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
$
2

 
$
3

 
Interest income (expense)
 
$
—

 
$
—

 
Other income
 
$
—

 
$
—

Interest rate contracts
(72
)
 
150

 
Interest income (expense)
 
(4
)
 
(9
)
 
Other income
 
—

 
—

Total
$
(70
)
 
$
153

 
 
 
$
(4
)
 
$
(9
)
 
 
 
$
—

 
$
—
Gains and Losses on Derivative Instruments Held for other Purposes
The following table presents information on gains and losses on derivative instruments held for trading purposes and their locations on the consolidated statement of income:
 
Location of Gain (Loss)
Recognized in Income on Derivatives
Amount of Gain (Loss) Recognized in Income on Derivatives
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
 
 
(in millions)
Interest rate contracts
Trading revenue (expense)
$
215

 
$
13

 
$
183

 
$
(369
)
Interest rate contracts
Residential mortgage banking revenue
(2
)
 
(4
)
 
33

 
(45
)
Foreign exchange contracts
Trading revenue (expense)
(182
)
 
77

 
(99
)
 
655

Equity contracts
Trading revenue (expense)
—

 
2

 
—

 
4

Precious metals contracts
Trading revenue (expense)
36

 
(55
)
 
54

 
6

Credit contracts
Trading revenue (expense)
(76
)
 
2

 
(191
)
 
80

Total
 
$
(9
)
 
$
35

 
$
(20
)
 
$
331
Credit-Risk Related Contingent Features
The following tables summarize our obligation to post additional collateral (from the current collateral level) in certain hypothetical commercially reasonable downgrade scenarios. It is not appropriate to accumulate or extrapolate information presented in the tables below to determine our total obligation because the information presented to determine the obligation in hypothetical rating scenarios is not mutually exclusive.
Moody’s
Long-Term Ratings
Short-Term Ratings
A1
 
A2
 
A3
 
(in millions)
P-1
$
—

 
$
35

 
$
250

P-2
1

 
35

 
250


S&P
Long-Term Ratings
Short-Term Ratings
AA-
 
A+
 
A
 
(in millions)
A-1+
$
—

 
$
—

 
$
34

A-1
3

 
3

 
37
Notional Value of Derivative Contracts
The following table summarizes the notional values of derivative contracts:

September 30, 2014
 
December 31, 2013
 
(in millions)
Interest rate:
 
 
 
Futures and forwards
$
220,669

 
$
175,468

Swaps
3,056,578

 
3,645,085

Options written
53,332

 
85,021

Options purchased
70,007

 
87,735

 
3,400,586

 
3,993,309

Foreign Exchange:
 
 
 
Swaps, futures and forwards
892,385

 
804,278

Options written
131,705

 
82,817

Options purchased
133,386

 
84,835

Spot
79,880

 
52,193

 
1,237,356

 
1,024,123

Commodities, equities and precious metals:
 
 
 
Swaps, futures and forwards
50,332

 
41,123

Options written
14,740

 
21,531

Options purchased
20,491

 
21,723

 
85,563

 
84,377

Credit derivatives
346,794

 
355,286

Total
$
5,070,299

 
$
5,457,095