Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

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, 2014		December 31, 2013
Derivatives not designated as hedging instruments:
Interest-rate contracts:
Swap agreements and forwards	$	898	$	1,023
Options and caps purchased	15		27
Options and caps written	15		27
Futures	4,063		3,282
Foreign exchange contracts:
Forward, swap and spot	1,260,080		1,124,355
Options purchased	2,486		1,666
Options written	1,631		1,423
Credit derivative contracts:
Credit swap agreements	165		141
Total return swap agreements(1)	431		—
Commodity and equity contracts:
Commodity(1)	14,800		2
Equity(1)	27		1
Other:
Stable value contracts	24,310		24,906
Deferred cash awards(2)	239		42
Derivatives designated as hedging instruments:
Interest-rate contracts:
Swap agreements	5,222		5,221
Foreign exchange contracts:
Forward and swap	2,703		2,783

⁽¹⁾ Primarily composed of positions held by a consolidated sponsored investment fund, more fully described in note 9.

⁽²⁾ Represents grants of deferred cash awards to employees; refer to discussion in this note under "Derivatives Not Designated as Hedging Instruments."

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, 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	$	2,585	$	137	$	2,722	$	2,589	$	132	$	2,721
Long-term debt(1)	2,500		—		2,500		2,500		—		2,500
Total	$	5,085	$	137	$	5,222	$	5,089	$	132	$	5,221

⁽¹⁾ As of June 30, 2014, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $40 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 tables present 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 June 30,
	2014				2013
	Contractual Rates		Rate Including Impact of Hedges		Contractual Rates		Rate Including Impact of Hedges
Long-term debt	3.53	%	2.73	%	3.40	%	2.65	%

	Six Months Ended June 30,
	2014				2013
	Contractual Rates		Rate Including Impact of Hedges		Contractual Rates		Rate Including Impact of Hedges
Long-term debt	3.46	%	2.66	%	3.57	%	2.83	%

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.

	Derivatives - Assets
	Balance Sheet Location	Fair Value
(In millions)		June 30, 2014		December 31, 2013
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other assets	$	6,346	$	11,552
Interest-rate contracts	Other assets	19		29
Other derivative contracts	Other assets	4		1
Total		$	6,369	$	11,582
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other assets	$	291	$	359
Interest-rate contracts	Other assets	39		36
Total		$	330	$	395

	Derivatives - Liabilities
	Balance Sheet Location	Fair Value
(In millions)		June 30, 2014		December 31, 2013
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other liabilities	$	6,322	$	11,428
Other derivative contracts	Other liabilities	68		23
Interest-rate contracts	Other liabilities	20		29
Total		$	6,410	$	11,480
Derivatives designated as hedging instruments:
Interest-rate contracts	Other liabilities	$	250	$	302
Foreign exchange contracts	Other liabilities	34		43
Total		$	284	$	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 June 30,					Six Months Ended June 30,
(In millions)		2014			2013		2014			2013
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Trading services revenue	$	144		$	169	$	278		$	314
Interest-rate contracts	Trading services revenue	(1		)	2		(1		)	3
Other derivative contracts	Processing fees and other revenue	—			—		(1		)	—
Total		$	143		$	171	$	276		$	317

	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 June 30					Six Months Ended June 30,
(In millions)		2014			2013		2014			2013
Derivatives not designated as hedging instruments:
Other derivative contracts	Compensation and employee benefits	$	(22	)	$	3	$	(70	)	$	6
Total		$	(22	)	$	3	$	(70	)	$	6

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 June 30, 2014			Six Months Ended June 30, 2014					Three Months Ended June 30, 2014			Six Months Ended June 30, 2014
Derivatives designated as fair value hedges:
Interest-rate contracts	Processing fees and other revenue	$	47		$	96		Long-term debt	Processing fees and other revenue	$	(44	)	$	(89	)
Interest-rate contracts	Processing fees and other revenue	(24		)	(41		)	Available-for-sale securities	Processing fees and other revenue(1)	22			38
Foreign exchange contracts	Processing fees and other revenue	18			60			Investment securities	Processing fees and other revenue	(18		)	(60		)
Total		$	41		$	115				$	(40	)	$	(111	)

	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 June 30, 2013			Six Months Ended June 30, 2013					Three Months Ended June 30, 2013			Six Months Ended June 30, 2013
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(1)	(20		)	(22		)
Total		$	(256	)	$	(266	)			$	244		$	254

⁽¹⁾ Represents amounts reclassified out of other comprehensive income, or OCI. For the three and six months endedJune 30, 2014, $13 million and $23 million, respectively, of unrealized losses on available-for-sale securities designated in fair value hedges were recognized in OCI. For the three and six months endedJune 30, 2013, $45 million and $60 million, respectively, of unrealized gains on available-for-sale securities designated in fair value hedges were recognized in OCI.

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, 2014			Six Months Ended June 30, 2014				Three Months Ended June 30, 2014			Six Months Ended June 30, 2014				Three Months Ended June 30, 2014		Six Months Ended June 30, 2014
(In millions)
Derivatives designated as cash flow hedges:
Interest-rate contracts	$	(1	)	$	(2	)	Net interest revenue	$	(1	)	$	(2	)	Net interest revenue	$	1	$	2
Foreign exchange contracts	(52		)	(64		)	Net interest revenue	—			—			Net interest revenue	1		2
Total	$	(53	)	$	(66	)		$	(1	)	$	(2	)		$	2	$	4

	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