Fair Value Option (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Gains and Losses on Other Financial Assets and Financial Liabilities at Fair Value

The table below presents the gains and losses recognized in earnings as a result of the election to apply the fair value option to certain financial assets and liabilities.

	Three Months Ended September				Nine Months Ended September
$ in millions	2023		2022		2023		2022
Unsecured short-term borrowings	$	(111)	$	1,114	$	(2,934)	$	5,379
Unsecured long-term borrowings	1,551		2,445		(890)		8,316
Other	(38)		434		(177)		1,255
Total	$	1,402	$	3,993	$	(4,001)	$	14,950

In the table above:

•Gains/(losses) were substantially all included in market making.

•Gains/(losses) exclude contractual interest, which is included in interest income and interest expense, for all instruments other than hybrid financial instruments. See Note 23 for further information about interest income and interest expense.

•Gains/(losses) included in unsecured short- and long-term borrowings were substantially all related to the embedded derivative component of hybrid financial instruments. These gains and losses would have been recognized under other U.S. GAAP even if the firm had not elected to account for the entire hybrid financial instrument at fair value.

•Gains/(losses) included in other were substantially all related to resale and repurchase agreements, deposits, other secured financings and other liabilities.•Other financial assets and liabilities at fair value are frequently economically hedged with trading assets and liabilities. Accordingly, gains or losses on such other financial assets and liabilities can be partially offset by gains or losses on trading assets and liabilities. As a result, gains or losses on other financial assets and liabilities do not necessarily represent the overall impact on the firm’s results of operations, liquidity or capital resources.

Summary of DVA Gains/(Losses) on Financial Liabilities

The table below presents information about the net debt valuation adjustment (DVA) gains/(losses) on financial liabilities for which the fair value option was elected.

	Three Months Ended September				Nine Months Ended September
$ in millions	2023		2022		2023		2022
Pre-tax DVA	$	443	$	907	$	(370)	$	3,488
After-tax DVA	$	328	$	673	$	(283)	$	2,601

In the table above:

•After-tax DVA is included in debt valuation adjustment in the consolidated statements of comprehensive income.

•The gains/(losses) reclassified to market making in the consolidated statements of earnings from accumulated other comprehensive income/(loss) upon extinguishment of such financial liabilities were not material for each of the three and nine months ended September 2023 and September 2022.

Loans and Lending Commitments

The table below presents the difference between the aggregate fair value and the aggregate contractual principal amount for loans (included in trading assets and loans in the consolidated balance sheets) for which the fair value option was elected.

	As of
	September		December
$ in millions	2023		2022
Performing loans
Aggregate contractual principal in excess of fair value	$	2,434	$	2,645
Loans on nonaccrual status and/or more than 90 days past due
Aggregate contractual principal in excess of fair value	$	2,556	$	3,331
Aggregate fair value	$	1,955	$	2,633

In the table above, the aggregate contractual principal amount of loans on nonaccrual status and/or more than 90 days past due (which excludes loans carried at zero fair value and considered uncollectible) exceeds the related fair value primarily because the firm regularly purchases loans, such as distressed loans, at values significantly below the contractual principal amounts.