Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Outstanding Hedges: (Notional Amount)

The following table presents the aggregate contractual, or notional, amounts of derivative financial instruments entered into in connection with our trading and asset-and-liability management activities as of the dates indicated:

(In millions)	June 30, 2013		December 31, 2012
Derivatives not designated as hedging instruments:
Interest-rate contracts:
Swap agreements and forwards	$	1,355	$	1,578
Options and caps purchased	46		68
Options and caps written	46		68
Futures	2,434		1,910
Foreign exchange contracts:
Forward, swap and spot	1,182,949		897,354
Options purchased	3,785		9,454
Options written	3,418		8,734
Credit derivative contracts:
Credit swap agreements	105		27
Other:
Stable value contracts	28,440		33,512
Futures	3		—
Derivatives designated as hedging instruments:
Interest-rate contracts:
Swap agreements	4,970		3,153
Foreign exchange contracts:
Forward and swap	3,002		3,477

Notional Amount of Interest Rate Swap Agreements Designated as Fair Value and Cash Flow Hedges

The following table presents the aggregate notional amounts of these interest-rate contracts and the related assets or liabilities being hedged as of the dates indicated:

	June 30, 2013						December 31, 2012
(In millions)	Fair Value Hedges		Cash Flow Hedges		Total		Fair Value Hedges		Cash Flow Hedges		Total
Investment securities available for sale	$	2,598	$	122	$	2,720	$	1,573	$	130	$	1,703
Long-term debt(1)	2,250		—		2,250		1,450		—		1,450
Total	$	4,848	$	122	$	4,970	$	3,023	$	130	$	3,153

⁽¹⁾ As of June 30, 2013 and December 31, 2012, fair value hedges of long-term debt increased the carrying value of long-term debt presented in our consolidated statement of condition by $38 million and $174 million, respectively.

Contractual and Weighted-Average Interest Rates, Which Include the Effects of Hedges Related to Financial Instruments

The following table presents the contractual and weighted-average interest rates for long-term debt, which include the effects of the hedges presented in the table above, for the periods indicated:

	Three Months Ended June 30,
	2013				2012
	Contractual Rates		Rate Including Impact of Hedges		Contractual Rates		Rate Including Impact of Hedges
Long-term debt	3.40	%	2.65	%	3.98	%	3.14	%

	Six Months Ended June 30,
	2013				2012
	Contractual Rates		Rate Including Impact of Hedges		Contractual Rates		Rate Including Impact of Hedges
Long-term debt	3.57	%	2.83	%	3.95	%	3.19	%

Schedule of the Fair Values of Derivative Financial Instruments

The following tables present the fair value of derivative financial instruments, excluding the impact of master netting agreements, recorded in our consolidated statement of condition as of the dates indicated. The impact of master netting agreements is disclosed in note 2.

	Asset Derivatives			Liability Derivatives
	June 30, 2013			June 30, 2013
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other assets	$	11,201	Other liabilities	$	11,191
Interest-rate contracts	Other assets	43		Other liabilities	44
Other derivative contracts	Other assets	—		Other liabilities	9
Total		$	11,244		$	11,244
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other assets	$	358	Other liabilities	$	2
Interest-rate contracts	Other assets	28		Other liabilities	288
Total		$	386		$	290

	Asset Derivatives			Liability Derivatives
	December 31, 2012			December 31, 2012
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other assets	$	9,243	Other liabilities	$	9,067
Interest-rate contracts	Other assets	61		Other liabilities	61
Other derivative contracts	Other assets	—		Other liabilities	9
Total		$	9,304		$	9,137
Derivatives designated as hedging instruments:
Interest-rate contracts	Other assets	$	162	Other liabilities	$	284
Foreign exchange contracts	Other assets	135		Other liabilities	17
Total		$	297		$	301

Impact of Derivatives on Consolidated Statement of Income

The following tables present the impact of our use of derivative financial instruments on our consolidated statement of income for the periods indicated:

	Location of Gain (Loss) on Derivative in Consolidated Statement of Income	Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income
		Three Months Ended					Six Months Ended
(In millions)		June 30, 2013		June 30, 2012			June 30, 2013		June 30, 2012
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Trading services revenue	$	169	$	129		$	314	$	346
Foreign exchange contracts	Processing fees and other revenue	—		(1		)	—		(3		)
Interest-rate contracts	Trading services revenue	2		—			3		(88		)
Interest-rate contracts	Processing fees and other revenue	—		—			—		2
Total		$	171	$	128		$	317	$	257

Schedule of Differences Between the Gains (Losses) on the Derivative and the Gains (Losses) on the Hedged Item

	Location of Gain (Loss) on Derivative in Consolidated Statement of Income	Amount of Gain (Loss) on Derivative Recognized  in Consolidated Statement of Income						Hedged Item in Fair Value Hedging Relationship	Location of Gain (Loss) on Hedged Item in Consolidated Statement  of Income	Amount of Gain (Loss) on Hedged Item Recognized in Consolidated Statement of Income
		Three Months Ended June 30, 2013			Six Months Ended June 30, 2013					Three Months Ended June 30, 2013			Six Months Ended June 30, 2013
(In millions)
Derivatives designated as fair value hedges:
Foreign exchange contracts	Processing fees and other revenue	$	(159	)	$	(155	)	Investment securities	Processing fees and other revenue	$	159		$	155
Interest-rate contracts	Processing fees and other revenue	(117		)	(132		)	Long-term debt	Processing fees and other revenue	105			121
Interest-rate contracts	Processing fees and other revenue	20			21			Available-for-sale securities	Processing fees and other revenue	(20		)	(22		)
Total		$	(256	)	$	(266	)			$	244		$	254

	Location of Gain (Loss) on Derivative in Consolidated Statement of Income	Amount of Gain (Loss) on Derivative Recognized  in Consolidated Statement of Income						Hedged Item in Fair Value Hedging Relationship	Location of  Gain (Loss) on Hedged Item  in Consolidated Statement  of Income	Amount of Gain (Loss) on Hedged Item Recognized in Consolidated Statement of Income
		Three Months Ended June 30, 2012			Six Months Ended June 30, 2012					Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
(In millions)
Derivatives designated as fair value hedges:
Foreign exchange contracts	Processing fees and other revenue	$	(26	)	$	4		Investment securities	Processing fees and other revenue	$	26		$	(4	)
Interest-rate contracts	Processing fees and other revenue	(31		)	(6		)	Available-for-sale securities	Processing fees and other revenue	29			2
Interest-rate contracts	Processing fees and other revenue	56			40			Long-term debt	Processing fees and other revenue	(50		)	(37		)
Total		$	(1	)	$	38				$	5		$	(39	)

Differences between the gains (losses) on the derivative and the gains (losses) on the hedged item, excluding any amounts recorded in net interest revenue, represent hedge ineffectiveness.

	Amount of Gain (Loss) on Derivative Recognized in Other Comprehensive Income					Location of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income	Amount of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income						Location of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income	Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income
	Three Months Ended June 30, 2013			Six Months Ended June 30, 2013			Three Months Ended June 30, 2013			Six Months Ended June 30, 2013				Three Months Ended June 30, 2013		Six Months Ended June 30, 2013
(In millions)
Derivatives designated as cash flow hedges:
Interest-rate contracts	$	(1	)	$	11	Net interest revenue	$	(1	)	$	(2	)	Net interest revenue	$	1	$	2
Foreign exchange contracts	48			153		Net interest revenue	—			—			Net interest revenue	2		5
Total	$	47		$	164		$	(1	)	$	(2	)		$	3	$	7

	Amount of Gain (Loss) on Derivative Recognized in Other Comprehensive Income				Location of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income	Amount of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income						Location of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income	Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income
	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012			Three Months Ended June 30, 2012			Six Months Ended June 30, 2012				Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
(In millions)
Derivatives designated as cash flow hedges:
Interest-rate contracts	$	2	$	3	Net interest revenue	$	(1	)	$	(3	)	Net interest revenue	$	—	$	1
Foreign exchange contracts	1		1		Net interest revenue	—			—			Net interest revenue	—		—
Total	$	3	$	4		$	(1	)	$	(3	)		$	—	$	1