Offsetting Arrangements

We manage credit and counterparty risk by entering into enforceable netting agreements and other collateral arrangements with counterparties to derivative contracts 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. For additional information on offsetting arrangements, refer to pages 166 to 170 in Note 11 to the consolidated financial statements included under Item 8, Financial Statements and Supplementary Data, in our 2016 Form 10-K.

As of September 30, 2017 and December 31, 2016, the fair value of securities received as collateral from third parties where we are permitted to transfer or re-pledge the securities totaled $2.96 billion and $1.77 billion, respectively, and the fair value of the portion that had been transferred or re-pledged as of the same dates was $41.2 million and $166 million, respectively.

The following tables present information about the offsetting of assets related to derivative contracts and secured financing transactions, as of the dates indicated:



Assets:	September 30, 2017
									Gross Amounts Not Offset in Statement of Condition
(In millions)	Gross Amounts of Recognized Assets⁽¹⁾⁽²⁾		Gross Amounts Offset in Statement of Condition⁽³⁾			Net Amounts of Assets Presented in Statement of Condition			Cash and Securities Received⁽⁴⁾			Net Amount⁽⁵⁾
Derivatives:
Foreign exchange contracts	$	11,737	$	(6,389	)	$	5,348					$	5,348
Interest-rate contracts	3		(2		)	1						1
Cash collateral and securities netting	NA		(637		)	(637		)	$	(106	)	(743		)
Total derivatives	11,740		(7,028		)	4,712			(106		)	4,606
Other financial instruments:
Resale agreements and securities borrowing⁽⁶⁾	63,821		(36,728		)	27,093			(27,093		)	—
Total derivatives and other financial instruments	$	75,561	$	(43,756	)	$	31,805		$	(27,199	)	$	4,606



Assets:	December 31, 2016
									Gross Amounts Not Offset in Statement of Condition
(In millions)	Gross Amounts of Recognized Assets⁽¹⁾⁽²⁾		Gross Amounts Offset in Statement of Condition⁽³⁾			Net Amounts of Assets Presented in Statement of Condition			Cash and Securities Received⁽⁴⁾			Net Amount⁽⁵⁾
Derivatives:
Foreign exchange contracts	$	16,484	$	(8,257	)	$	8,227					$	8,227
Interest-rate contracts	68		(68		)	—						—
Cash collateral and securities netting	NA		(906		)	(906		)	$	(247	)	(1,153		)
Total derivatives	16,552		(9,231		)	7,321			(247		)	7,074
Other financial instruments:
Resale agreements and securities borrowing⁽⁶⁾	58,677		(35,517		)	23,160			(22,939		)	221
Total derivatives and other financial instruments	$	75,229	$	(44,748	)	$	30,481		$	(23,186	)	$	7,295

⁽¹⁾Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement.

⁽²⁾Derivative amounts are carried at fair value and securities financing amounts are carried at amortized cost, except for securities collateral which is also carried at fair value. For additional information about the measurement basis of these instruments, refer to pages 131 to 142 in Notes 1 and 2 to the consolidated financial statements included under Item 8, Financial Statements and Supplementary Data, in our 2016 Form 10-K.

⁽³⁾Amounts subject to netting arrangements which have been determined to be legally enforceable and eligible for netting in the consolidated statement of condition.

⁽⁴⁾ Includes securities in connection with our securities borrowing transactions.

⁽⁵⁾Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements.

⁽⁶⁾Included in the $27,093 million as of September 30, 2017 were $3,465 million of resale agreements and $23,628 million of collateral provided related to securities borrowing. Included in the $23,160 million as of December 31, 2016 were $1,956 million of resale agreements and $21,204 million of collateral provided related to securities borrowing. Resale agreements and collateral provided related to securities borrowing were recorded in securities purchased under resale agreements and other assets, respectively, in our consolidated statement of condition. Additional information about principal securities finance transactions is provided in Note 9 to the consolidated financial statements in this Form 10-Q.

^NA Not applicable

The following tables present information about the offsetting of liabilities related to derivative contracts and secured financing transactions, as of the dates indicated:



Liabilities:	September 30, 2017
									Gross Amounts Not Offset in Statement of Condition
(In millions)	Gross Amounts of Recognized Liabilities⁽¹⁾⁽²⁾		Gross Amounts Offset in Statement of Condition⁽³⁾			Net Amounts of Liabilities Presented in Statement of Condition			Cash and Securities Provided⁽⁴⁾			Net Amount⁽⁵⁾
Derivatives:
Foreign exchange contracts	$	11,583	$	(6,390	)	$	5,193					$	5,193
Interest-rate contracts⁽⁶⁾	107		(1		)	106						106
Other derivative contracts	319		—			319						319
Cash collateral and securities netting	NA		(1,074		)	(1,074		)	$	(262	)	(1,336		)
Total derivatives	12,009		(7,465		)	4,544			(262		)	4,282
Other financial instruments:
Repurchase agreements and securities lending⁽⁷⁾	45,864		(36,728		)	9,136			(6,564		)	2,572
Total derivatives and other financial instruments	$	57,873	$	(44,193	)	$	13,680		$	(6,826	)	$	6,854



Liabilities:	December 31, 2016
									Gross Amounts Not Offset in Statement of Condition
(In millions)	Gross Amounts of Recognized Liabilities⁽¹⁾⁽²⁾		Gross Amounts Offset in Statement of Condition⁽³⁾			Net Amounts of Liabilities Presented in Statement of Condition			Cash and Securities Provided⁽⁴⁾			Net Amount⁽⁵⁾
Derivatives:
Foreign exchange contracts	$	15,956	$	(8,253	)	$	7,703					$	7,703
Interest-rate contracts	348		(73		)	275						275
Other derivative contracts	380		—			380						380
Cash collateral and securities netting	NA		(2,356		)	(2,356		)	$	(180	)	(2,536		)
Total derivatives	16,684		(10,682		)	6,002			(180		)	5,822
Other financial instruments:
Resale agreements and securities lending⁽⁷⁾	44,933		(35,517		)	9,416			(7,059		)	2,357
Total derivatives and other financial instruments	$	61,617	$	(46,199	)	$	15,418		$	(7,239	)	$	8,179

⁽¹⁾Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement.

⁽³⁾Amounts subject to netting arrangements which have been determined to be legally enforceable and eligible for netting in the consolidated statement of condition.

⁽⁴⁾ Includes securities provided in connection with our securities lending transactions.

⁽⁵⁾Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements.

⁽⁶⁾Variation margin payments presented as settlements rather than collateral.

⁽⁷⁾Included in the $9,136 million as of September 30, 2017 were $3,867 million of repurchase agreements and $5,269 million of collateral received related to securities lending. Included in the $9,416 million as of December 31, 2016 were $4,400 million of repurchase agreements and $5,016 million of collateral received related to securities lending. Repurchase agreements and collateral received 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. Additional information about principal securities finance transactions is provided in Note 9 to the consolidated financial statements in this Form 10-Q.

^NA Not applicable

The securities transferred under resale and repurchase agreements typically are U.S. Treasury, agency and agency MBS. In our principal securities borrowing and lending arrangements, the securities transferred are predominantly equity securities and some corporate debt securities. The fair value of the securities transferred may increase in value to an amount greater than the amount received under our repurchase and securities lending arrangements, which exposes the Company with counterparty risk. We require the review of the price of the underlying securities in relation to the carrying value of the repurchase agreements and securities lending arrangements on a daily basis and when appropriate, adjust the cash or security to be obtained or returned to counterparties that is reflective of the required collateral levels.

The following tables summarize our repurchase agreements and securities lending transactions by category of collateral pledged and remaining maturity of these agreements as of the periods indicated:



	Remaining Contractual Maturity of the Agreements
	As of September 30, 2017
(In millions)	Overnight and Continuous		Up to 30 days		30 – 90 days		Total
Repurchase agreements:
U.S. Treasury and agency securities	$	35,009					$	35,009
Total	35,009		—		—		35,009
Securities lending transactions:
Corporate debt securities	103						103
Equity securities	10,433				297		10,730
Non-U.S. sovereign debt	22						22
Total	10,558		—		297		10,855
Gross amount of recognized liabilities for repurchase agreements and securities lending	$	45,567	$	—	$	297	$	45,864



	Remaining Contractual Maturity of the Agreements
	As of December 31, 2016
(In millions)	Overnight and Continuous		Up to 30 days		30 – 90 days		Total
Repurchase agreements:
U.S. Treasury and agency securities	$	35,509	$	—	$	—	$	35,509
Total	35,509		—		—		35,509
Securities lending transactions:
Corporate debt securities	53		—		—		53
Equity securities	8,337		—		1,034		9,371
Total	8,390		—		1,034		9,424
Gross amount of recognized liabilities for repurchase agreements and securities lending	$	43,899	$	—	$	1,034	$	44,933