Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

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, 2015		December 31, 2014
Derivatives not designated as hedging instruments:
Interest-rate contracts:
Swap agreements and forwards	$	266	$	645
Options and caps purchased	2		7
Options and caps written	2		7
Futures	12,225		3,939
Foreign exchange contracts:
Forward, swap and spot	1,331,780		1,231,344
Options purchased	2,433		2,767
Options written	2,309		2,404
Credit derivative contracts:
Credit swap agreements	229		191
Commodity and equity contracts:
Commodity(1)	77		26
Equity(1)	52		2
Other:
Stable value contracts	23,280		23,409
Deferred value awards(2)	386		210
Derivatives designated as hedging instruments:
Interest-rate contracts:
Swap agreements	6,961		6,077
Foreign exchange contracts:
Forward and swap	9,570		2,705

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

⁽²⁾ Represents grants of deferred value 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, 2015(1)
(In millions)	Fair Value Hedges
Investment securities available for sale	$	1,761
Long-term debt(2)	5,200
Total	$	6,961

	December 31, 2014
(In millions)	Fair Value Hedges
Investment securities available for sale	$	2,577
Long-term debt(2)	3,500
Total	$	6,077

⁽¹⁾ As of June 30, 2015 there were no interest-rate contracts designated as cash flow hedges.

⁽²⁾ As of June 30, 2015, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $47 million. As of December 31, 2014, these fair value hedges decreased the carrying value of long-term debt presented in our consolidated statement of condition by $76 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,
	2015				2014
	Contractual Rates		Rate  Including Impact of Hedges		Contractual Rates		Rate  Including Impact of Hedges
Long-term debt	3.70	%	2.67	%	3.53	%	2.73	%

	Six Months Ended June 30,
	2015				2014
	Contractual Rates		Rate  Including Impact of Hedges		Contractual Rates		Rate  Including Impact of Hedges
Long-term debt	3.61	%	2.60	%	3.46	%	2.66	%

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.

Derivative Assets(1)
	Fair Value
(In millions)	June 30, 2015		December 31, 2014
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	10,030	$	14,626
Interest-rate contracts	4		15
Other derivative contracts	4		2
Total	$	10,038	$	14,643
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	509	$	509
Interest-rate contracts	45		62
Total	$	554	$	571

⁽¹⁾ Derivative assets are included within other assets in our consolidated statement of condition.

Derivative Liabilities(1)
	Fair Value
(In millions)	June 30, 2015		December 31, 2014
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	9,976	$	14,922
Other derivative contracts	107		70
Interest-rate contracts	4		16
Total	$	10,087	$	15,008
Derivatives designated as hedging instruments:
Interest-rate contracts	$	215	$	223
Foreign exchange contracts	27		3
Total	$	242	$	226

⁽¹⁾ Derivative liabilities are included within other liabilities in our consolidated statement of condition.

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)		2015			2014			2015			2014
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Trading services revenue	$	165		$	144		$	369		$	278
Interest-rate contracts	Trading services revenue	(1		)	(1		)	(1		)	(1		)
Other derivative contracts	Trading services revenue	1			—			3			—
Other derivative contracts	Processing fees and other revenue	—			—			—			(1		)
Total		$	165		$	143		$	371		$	276

	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)		2015		2014			2015		2014
Derivatives not designated as hedging instruments:
Other derivative contracts	Compensation and employee benefits	$	33	$	(22	)	$	92	$	(70	)
Total		$	33	$	(22	)	$	92	$	(70	)

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, 2015			Six Months Ended June 30, 2015					Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
Derivatives designated as fair value hedges:
Foreign exchange contracts	Processing fees and other revenue	$	12		$	(52	)	Investment securities	Processing fees and other revenue	$	(12	)	$	52
Foreign exchange contracts	Processing fees and other revenue	(13		)	(13		)	FX deposit	Processing fees and other revenue	13			13
Interest-rate contracts	Processing fees and other revenue	37			12			Available-for-sale securities	Processing fees and other revenue(1)	(38		)	(12		)
Interest-rate contracts	Processing fees and other revenue	(85		)	(17		)	Long-term debt	Processing fees and other revenue	82			17
Total		$	(49	)	$	(70	)			$	45		$	70

	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:
Foreign exchange contracts	Processing fees and other revenue	$	47		96			Investment securities	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
Interest-rate contracts	Processing fees and other revenue	18			60			Long-term debt	Processing fees and other revenue	(18		)	(60		)
Total		$	41		$	115				$	(40	)	$	(111	)

⁽¹⁾ Represents amounts reclassified out of or into other comprehensive income, or OCI. For the three and six months ended June 30, 2015, $22 million and $7 million, respectively, of unrealized gains on available-for-sale securities designated in fair value hedges were recognized in OCI. For the three and six months ended June 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.

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
(In millions)	Three Months Ended June 30, 2015		Six Months Ended June 30, 2015			Three Months Ended June 30, 2015			Six Months Ended June 30, 2015				Three Months Ended June 30, 2015		Six Months Ended June 30, 2015
Derivatives designated as cash flow hedges:
Interest-rate contracts	$	—	$	—	Net interest revenue	$	(1	)	$	(2	)	Net interest revenue	$	—	$	—
Foreign exchange contracts	21		41		Net interest revenue	—			—			Net interest revenue	2		4
Total	$	21	$	41		$	(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
(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				Three Months Ended June 30, 2014		Six Months Ended June 30, 2014
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