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Offsetting Arrangements
 6 Months Ended
Jun. 30, 2013
Offsetting [Abstract]  
Offsetting Arrangements
Offsetting Arrangements
 We manage credit and counterparty risk by entering into enforceable netting agreements and other collateral arrangements with counterparties to derivative financial instruments and secured financing transactions, including resale and repurchase agreements, and principal securities borrowing and lending agreements. These netting agreements mitigate our counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement. In limited cases, a netting agreement may also provide for the periodic netting of settlement payments with respect to multiple different transaction types in the normal course of business.
Certain of our derivative contracts are executed under either standardized netting agreements or, for exchange-traded derivatives, the relevant contracts for a particular exchange which contain enforceable netting provisions. In certain cases, we may have cross-product netting arrangements which allow for netting and set-off of a variety of types of derivatives with a single counterparty. A derivative netting arrangement creates an enforceable right of set-off that becomes effective, and affects the realization or settlement of individual financial assets and liabilities, only following a specified event of default. Collateral requirements associated with our derivative contracts are determined after a review of the creditworthiness of each counterparty, and the requirements are monitored and adjusted daily, typically based on net exposure by counterparty. Collateral is generally in the form of cash or highly liquid U.S. government securities.
In connection with our secured financing activities, we enter into netting agreements and other collateral arrangements with counterparties, which provide for the right to liquidate collateral upon an event of default. Required collateral is generally in the form of cash, equities or fixed-income securities. Default events may include the failure to make payments or deliver securities timely, material adverse changes in financial condition or insolvency, the breach of minimum regulatory capital requirements, or loss of license, charter or other legal authorization necessary to perform under the contract.
In order for an arrangement to be eligible for netting, we must have a basis to conclude that such netting arrangements are legally enforceable. The analysis of the legal enforceability of an arrangement differs by jurisdiction, depending on the laws of that jurisdiction. In many jurisdictions, specific legislation exists that provides for the enforceability in bankruptcy of close-out netting under a netting agreement, typically by way of specific exception from more general prohibitions on the exercise of creditor rights.
When we have a basis to conclude that a legally enforceable netting arrangement exists between us and the derivative counterparty and the relevant transaction is the type of transaction that is recorded in our consolidated statement of condition, we offset derivative assets and liabilities, and the related collateral received and provided, in our consolidated statement of condition. We also offset secured financing assets and liabilities with the same counterparty or clearinghouse which have the same maturity date and are settled in the normal course of business on a net basis.



The following tables present information about the offsetting of derivative financial instruments and secured financing transactions, as of the dates indicated:
Assets:
 
June 30, 2013
 
December 31, 2012
(In millions)
 
Gross Amounts of Recognized Assets(1)
 
Gross Amounts Offset in Statement of Condition(2)
 
Net Amounts of Assets Presented in Statement of Condition
 
Gross Amounts of Recognized Assets(1)
 
Gross Amounts Offset in Statement of Condition(2)
 
Net Amounts of Assets Presented in Statement of Condition
Derivatives:
 
 
 
 
 
 
 
 
Interest-rate contracts
 
$
71

 
$
(51
)
 
$
20

 
$
223

 
$
(19
)
 
$
204

Foreign exchange contracts
 
11,559

 
(4,583
)
 
6,976

 
9,378

 
(3,575
)
 
5,803

Cash collateral netting
 
—

 
(861
)
 
(861
)
 
—

 
(1,451
)
 
(1,451
)
Total derivatives
 
$
11,630

 
$
(5,495
)
 
$
6,135

 
$
9,601

 
$
(5,045
)
 
$
4,556

Other financial instruments:
 
 
 
 
 
 
 
 
Resale agreements and securities borrowing(3)
 
$
41,627

 
$
(26,167
)
 
$
15,460

 
$
35,658

 
$
(23,809
)
 
$
11,849

Total derivatives and other financial instruments
 
$
53,257

 
$
(31,662
)
 
$
21,595

 
$
45,259

 
$
(28,854
)
 
$
16,405

 
 
 
 
 
(1) Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement.
(2) Amounts subject to netting arrangements which have been determined to be legally enforceable.
(3) Included in the $15,460 million as of June 30, 2013 was $5,569 million of resale agreements and $9,891 million of collateral related to securities borrowing. Included in the $11,849 million as of December 31, 2012 was $5,016 million of resale agreements and $6,833 million of collateral related to securities borrowing. Resale agreements and collateral related to securities borrowing were recorded in securities purchased under resale agreements and other assets, respectively, in our consolidated statement of condition. Refer to note 8 for additional information with respect to principal securities finance transactions.

 
 
June 30, 2013
 
December 31, 2012
 
 
 
 
Gross Amounts Not Offset in Statement of Condition(1)
 
 
 
 
 
Gross Amounts Not Offset in Statement of Condition(1)
 
 
(In millions)
 
Net Amount of Assets Presented in Statement of Condition
 
Counterparty Netting
 
Collateral Received
 
Net Amount(2)
 
Net Amount of Assets Presented in Statement of Condition
 
Counterparty Netting
 
Collateral Received
 
Net Amount(2)
Derivatives
 
$
6,135

 
$
—

 
$
(34
)
 
$
6,101

 
$
4,556

 
$
—

 
$
(105
)
 
$
4,451

Resale agreements and securities borrowing
 
15,460

 
(205
)
 
(15,192
)
 
63

 
11,849

 
(126
)
 
(11,626
)
 
97

Total
 
$
21,595

 
$
(205
)
 
$
(15,226
)
 
$
6,164

 
$
16,405

 
$
(126
)
 
$
(11,731
)
 
$
4,548

 
 
 
 
 
(1) Amounts subject to netting arrangements which have been determined to be legally enforceable
(2) Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements.
The following tables present information about the offsetting of derivative financial instruments and secured financing transactions, as of the dates indicated:
Liabilities:
 
June 30, 2013
 
December 31, 2012
(In millions)
 
Gross Amounts of Recognized Liabilities(1)
 
Gross Amounts Offset in Statement of Condition(2)
 
Net Amounts of Liabilities Presented in Statement of Condition
 
Gross Amounts of Recognized Liabilities(1)
 
Gross Amounts Offset in Statement of Condition(2)
 
Net Amounts of Liabilities Presented in Statement of Condition
Derivatives:
 
 
 
 
 
 
 
 
Interest-rate contracts
 
$
332

 
$
(51
)
 
$
281

 
$
345

 
$
(19
)
 
$
326

Foreign exchange contracts
 
11,193

 
(4,583
)
 
6,610

 
9,084

 
(3,574
)
 
5,510

Other derivative contracts
 
9

 
—

 
9

 
9

 
—

 
9

Cash collateral netting
 
—

 
(904
)
 
(904
)
 
—

 
(478
)
 
(478
)
Total derivatives
 
$
11,534

 
$
(5,538
)
 
$
5,996

 
$
9,438

 
$
(4,071
)
 
$
5,367

Other financial instruments:
 
 
 
 
 
 
 
 
Repurchase agreements and securities lending(3)
 
$
41,193

 
$
(26,167
)
 
$
15,026

 
$
36,801

 
$
(23,809
)
 
$
12,992

Total derivatives and other financial instruments
 
$
52,727

 
$
(31,705
)
 
$
21,022

 
$
46,239

 
$
(27,880
)
 
$
18,359

 
 
 
 
 
(1) Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement.
(2) Amounts subject to netting arrangements which have been determined to be legally enforceable.
(3) Included in the $15,026 million as of June 30, 2013 was $9,154 million of repurchase agreements and $5,872 million of collateral related to securities lending. Included in the $12,992 million as of December 31, 2012 was $8,006 million of repurchase agreements and $4,986 million of collateral related to securities lending. Repurchase agreements and collateral related to securities lending were recorded in securities sold under repurchase agreements and accrued expenses and other liabilities, respectively, in our consolidated statement of condition. Refer to note 8 for additional information with respect to principal securities finance transactions.

 
 
June 30, 2013
 
December 31, 2012
 
 
 
 
Gross Amounts Not Offset in Statement of Condition(1)
 
 
 
 
 
Gross Amounts Not Offset in Statement of Condition(1)
 
 
(In millions)
 
Net Amount of Liabilities Presented in Statement of Condition
 
Counterparty Netting
 
Collateral Provided
 
Net Amount(2)
 
Net Amount of Liabilities Presented in Statement of Condition
 
Counterparty Netting
 
Collateral Provided
 
Net Amount(2)
Derivatives
 
$
5,996

 
$
—

 
$
(2
)
 
$
5,994

 
$
5,367

 
$
—

 
$
—

 
$
5,367

Repurchase agreements and securities lending
 
15,026

 
(205
)
 
(14,036
)
 
785

 
12,992

 
(126
)
 
(12,067
)
 
799

Total
 
$
21,022

 
$
(205
)
 
$
(14,038
)
 
$
6,779

 
$
18,359

 
$
(126
)
 
$
(12,067
)
 
$
6,166

 
 
 
 
 
(1) Amounts subject to netting arrangements which have been determined to be legally enforceable
(2) Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements.