Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Outstanding Hedges: (Notional Amount)

For cash flow hedges, any changes in the fair value of the derivative financial instruments remain in AOCI, and are generally recorded in our consolidated statement of income in future periods when earnings are affected by the var

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:

	March 31, 2014						December 31, 2013
(In millions)	Fair Value Hedges		Cash Flow Hedges		Total		Fair Value Hedges		Cash Flow Hedges		Total
Investment securities available for sale	$	2,589	$	133	$	2,722	$	2,589	$	132	$	2,721
Long-term debt(1)	2,500		—		2,500		2,500		—		2,500
Total	$	5,089	$	133	$	5,222	$	5,089	$	132	$	5,221

⁽¹⁾ As of March 31, 2014, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $3 million. As of December 31, 2013, these fair value hedges decreased the carrying value of long-term debt presented in our consolidated statement of condition by $35 million.

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 fair value hedges presented in the table above, for the periods indicated:

	Three Months Ended March 31,
	2014				2013
	Contractual Rates		Rate Including Impact of Hedges		Contractual Rates		Rate Including Impact of Hedges
Long-term debt	3.39	%	2.60	%	3.77	%	3.03	%

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
	Balance Sheet Location	Fair Value
(In millions)		March 31, 2014		December 31, 2013
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other assets	$	8,012	$	11,552
Interest-rate contracts	Other assets	21		29
Other derivative contracts	Other assets	2		1
Total		$	8,035	$	11,582
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other assets	$	306	$	359
Interest-rate contracts	Other assets	35		36
Total		$	341	$	395

	Liability Derivatives
	Balance Sheet Location	Fair Value
(In millions)		March 31, 2014		December 31, 2013
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other liabilities	$	7,771	$	11,428
Interest-rate contracts	Other liabilities	21		29
Other derivative contracts	Other liabilities	10		9
Total		$	7,802	$	11,466
Derivatives designated as hedging instruments:
Interest-rate contracts	Other liabilities	$	248	$	302
Foreign exchange contracts	Other liabilities	71		43
Total		$	319	$	345

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 March 31,
(In millions)		2014			2013
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Trading services revenue	$	134		$	145
Interest-rate contracts	Trading services revenue	—			1
Other derivative contracts	Processing fees and other revenue	(1		)	—
Total		$	133		$	146

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
(In millions)		Three Months Ended March 31,								Three Months Ended March 31,
Derivatives designated as fair value hedges:		2014			2013					2014			2013
Foreign exchange contracts	Processing fees and other revenue	$	42		$	4		Investment securities	Processing fees and other revenue	$	(42	)	$	(4	)
Interest-rate contracts	Processing fees and other revenue	(12		)	1			Available-for-sale securities	Processing fees and other revenue	12			(2		)
Interest-rate contracts	Processing fees and other revenue	49			(15		)	Long-term debt	Processing fees and other revenue	(45		)	16
Total		$	79		$	(10	)			$	(75	)	$	10

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 March 31,						Three Months Ended March 31,							Three Months Ended March 31,
(In millions)	2014			2013			2014			2013				2014		2013
Derivatives designated as cash flow hedges:
Interest-rate contracts	$	(1	)	$	12	Net interest revenue	$	(1	)	$	(1	)	Net interest revenue	$	1	$	1
Foreign exchange contracts	(12		)	105		Net interest revenue	—			—			Net interest revenue	1		3
Total	$	(13	)	$	117		$	(1	)	$	(1	)		$	2	$	4