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Fair Value (Tables)
 12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
 
Fair Value Measurements on a Recurring Basis
 
As of December 31, 2018
(In millions)
Quoted Market
Prices in Active
Markets
(Level 1)
 
Pricing Methods
with Significant
Observable
Market Inputs
(Level 2)
 
Pricing Methods
with Significant
Unobservable
Market Inputs
(Level 3)
 
Impact of Netting(1)
 
Total Net
Carrying Value
in Consolidated
Statement of
Condition
Assets:
 
 
 
 
 
 
 
 
 
Trading account assets:
 
 
 
 
 
 
 
 
 
U.S. government securities
$
34

 
$
—

 
$
—

 
 
 
$
34

Non-U.S. government securities
146

 
179

 
—

 
 
 
325

Other
—

 
501

 
—

 
 
 
501

Total trading account assets
180

 
680

 
—

 
 
 
860

AFS investment securities:
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies:
 
 
 
 
 
 
 
 
 
Direct obligations
1,039

 
—

 
—

 
 
 
1,039

Mortgage-backed securities
—

 
15,968

 
—

 
 
 
15,968

Total U.S. Treasury and federal agencies
1,039

 
15,968

 
—

 
 
 
17,007

Asset-backed securities:
 
 
 
 
 
 
 
 
 
Student loans
—

 
541

 
—

 
 
 
541

Credit cards
—

 
583

 
—

 
 
 
583

Collateralized loan obligations
—

 
—

 
593

 
 
 
593

Total asset-backed securities
—

 
1,124

 
593

 

 
1,717

Non-U.S. debt securities:
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
—

 
1,682

 
—

 
 
 
1,682

Asset-backed securities
—

 
943

 
631

 
 
 
1,574

Government securities
—

 
12,793

 
—

 
 
 
12,793

Other(2)
—

 
6,544

 
58

 
 
 
6,602

Total non-U.S. debt securities
—

 
21,962

 
689

 
 
 
22,651

State and political subdivisions
—

 
1,918

 
—

 
 
 
1,918

Collateralized mortgage obligations
—

 
195

 
2

 
 
 
197

Other U.S. debt securities
—

 
1,658

 
—

 
 
 
1,658

Total AFS investment securities
1,039

 
42,825

 
1,284

 

 
45,148

Other assets:
 
 
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
—

 
16,382

 
4

 
$
(11,210
)
 
5,176

Interest rate contracts
13

 
—

 
—

 
—

 
13

Total derivative instruments
13

 
16,382

 
4

 
(11,210
)
 
5,189

Other
—

 
395

 
—

 
—

 
395

Total assets carried at fair value
$
1,232

 
$
60,282

 
$
1,288

 
$
(11,210
)
 
$
51,592

Liabilities:
 
 
 
 
 
 
 
 
 
Accrued expenses and other liabilities:
 
 
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
—

 
16,518

 
4

 
(11,564
)
 
4,958

Interest rate contracts
—

 
71

 
—

 
—

 
71

Other derivative contracts
—

 
214

 
—

 
—

 
214

Total derivative instruments
—

 
16,803

 
4

 
(11,564
)
 
5,243

Total liabilities carried at fair value
$
—

 
$
16,803

 
$
4

 
$
(11,564
)
 
$
5,243

 
 
 
 
(1) Represents counterparty netting against level 2 financial assets and liabilities where a legally enforceable master netting agreement exists between us and the counterparty. Netting also reflects asset and liability reductions of $987 million and $1,341 million, respectively, for cash collateral received from and provided to derivative counterparties.
(2) As of December 31, 2018, the fair value of other non-U.S. debt securities included $1,295 million of covered bonds and $1,331 million of corporate bonds.
 
Fair Value Measurements on a Recurring Basis
 
As of December 31, 2017
(In millions)
Quoted Market
Prices in Active
Markets
(Level 1)
 
Pricing Methods
with Significant
Observable
Market Inputs
(Level 2)
 
Pricing Methods
with Significant
Unobservable
Market Inputs
(Level 3)
 
Impact of Netting(1)
 
Total Net
Carrying Value
in Consolidated
Statement of
Condition
Assets:
 
 
 
 
 
 
 
 
 
Trading account assets:
 
 
 
 
 
 
 
 
 
U.S. government securities
$
39

 
$
—

 
$
—

 
 
 
$
39

Non-U.S. government securities
389

 
93

 
—

 
 
 
482

Other
44

 
528

 
—

 
 
 
572

Total trading account assets
472

 
621

 
—

 
 
 
1,093

AFS investment securities:




 
 
 


U.S. Treasury and federal agencies:




 
 
 


Direct obligations
11


212


—

 
 

223

Mortgage-backed securities
—


10,872


—

 
 

10,872

Total U.S. Treasury and federal agencies
11


11,084


—

 
 

11,095

Asset-backed securities:




 
 
 


Student loans
—


3,358


—

 
 

3,358

Credit cards
—


1,542


—

 
 

1,542

Collateralized loan obligations
—


89


1,358

 
 

1,447

Total asset-backed securities
—


4,989


1,358

 
 

6,347

Non-U.S. debt securities:






 
 
 



Mortgage-backed securities
—


6,576


119

 
 

6,695

Asset-backed securities
—


2,545


402

 
 

2,947

Government securities
—


10,721


—

 
 

10,721

Other(2)
—


5,904


204

 
 

6,108

Total non-U.S. debt securities
—


25,746


725

 
 

26,471

State and political subdivisions
—


9,108


43

 
 

9,151

Collateralized mortgage obligations
—


1,054


—

 
 

1,054

Other U.S. debt securities
—


2,560


—

 
 

2,560

U.S. equity securities
—


46


—

 
 

46

U.S. money-market mutual funds
—


397


—

 
 

397

Total AFS investment securities
11


54,984


2,126

 
 

57,121

Other assets:




 
 
 
 
 
Derivatives instruments:




 
 
 
 
 
Foreign exchange contracts
—


11,596


1

 
$
(7,593
)
 
4,004

Interest rate contracts
8


—


—

 
—

 
8

Other derivative contracts
1


—


—

 
—

 
1

Total derivative instruments
9


11,596


1

 
(7,593
)
 
4,013

Total assets carried at fair value
$
492


$
67,201


$
2,127

 
$
(7,593
)
 
$
62,227

Liabilities:





 
 
 
 
Accrued expenses and other liabilities:





 
 
 
 
Trading account liabilities:





 
 
 
 
Other
$
39


$
—


$
—

 
$
—

 
$
39

Derivative instruments:





 
 
 
 
Foreign exchange contracts
—


11,467


1

 
(5,970
)
 
5,498

Interest rate contracts
—


100


—

 
—

 
100

Other derivative contracts
1


283


—

 
—

 
284

Total derivative instruments
1


11,850


1

 
(5,970
)
 
5,882

Total liabilities carried at fair value
$
40


$
11,850


$
1

 
$
(5,970
)
 
$
5,921

 
 
 
 
(1) Represents counterparty netting against level 2 financial assets and liabilities where a legally enforceable master netting agreement exists between us and the counterparty. Netting also reflects asset and liability reductions of $2,045 million and $422 million, respectively, for cash collateral received from and provided to derivative counterparties.
(2) As of December 31, 2017, the fair value of other non-U.S. debt securities was primarily composed of $3,537 million of covered bonds and $1,885 million of corporate bonds.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables present activity related to our level 3 financial assets during the years ended December 31, 2018 and 2017, respectively. Transfers into and out of level 3 are reported as of the beginning of the period presented. During the years ended December 31, 2018 and 2017, transfers into level 3 were mainly related to certain CMO, MBS and ABS, including non-U.S. debt securities, for which fair value was measured using information obtained from third-party sources, including non-binding broker/dealer quotes. During the years ended December 31, 2018 and 2017, transfers out of level 3 were mainly related to certain CMO, MBS and ABS, including non-U.S. debt securities, for which fair value was measured using prices for which observable market information became available.
 
Fair Value Measurements Using Significant Unobservable Inputs
 
Year Ended December 31, 2018
 
Fair Value as of
December 31,
2017
 
Total Realized and
Unrealized Gains (Losses)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers
out of Level 3
 
Fair Value 
as of December 31,
2018(1)
 
Change in Unrealized Gains (Losses) Related to Financial Instruments
Held as of
December 31, 2018
(In millions)
 
Recorded in Revenue(1)
 
Recorded in Other Comprehensive Income(1)
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AFS Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateralized loan obligations

$
1,358

 
$
4

 
$
(7
)
 
$
351

 
$
(636
)
 
$
(268
)
 
$
—

 
$
(209
)
 
$
593

 
 
Total asset-backed securities
1,358

 
4

 
(7
)
 
351

 
(636
)
 
(268
)
 
—

 
(209
)
 
593

 
 
Non-U.S. debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
119

 
—

 
—

 
—

 
—

 
—

 
—

 
(119
)
 
—

 
 
Asset-backed securities
402

 
—

 
(4
)
 
495

 
(310
)
 
(66
)
 
114

 
—

 
631

 
 
Other
204

 
—

 
—

 
13

 
(59
)
 
(36
)
 
—

 
(64
)
 
58

 
 
Total non-U.S. debt securities
725

 
—

 
(4
)
 
508

 
(369
)
 
(102
)
 
114

 
(183
)
 
689

 
 
State and political subdivisions
43

 
—

 
—

 
—

 
(37
)
 
(1
)
 
—

 
(5
)
 
—

 
 
Collateralized mortgage obligations
—

 
—

 
—

 
—

 
—

 
(6
)
 
8

 
—

 
2

 
 
Total AFS investment securities
2,126

 
4

 
(11
)
 
859

 
(1,042
)
 
(377
)
 
122

 
(397
)
 
1,284

 
 
Derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
1

 
(3
)
 
—

 
6

 
—

 
—

 
—

 
—

 
4

 
$
(3
)
Total derivative instruments
1

 
(3
)
 
—

 
6

 
—

 
—

 
—

 
—

 
4

 
(3
)
Total assets carried at fair value
$
2,127

 
$
1

 
$
(11
)
 
$
865

 
$
(1,042
)
 
$
(377
)
 
$
122

 
$
(397
)
 
$
1,288

 
$
(3
)
 
 
 
 
(1) Total realized and unrealized gains (losses) on AFS investment securities are included within gains (losses) related to investment securities, net. Total realized and unrealized gains (losses) on derivative instruments are included within foreign exchange trading services.


 
Fair Value Measurements Using Significant Unobservable Inputs
 
Year Ended December 31, 2017
 
Fair Value
as of
December 31,
2016
 
Total Realized and
Unrealized Gains (Losses)
 
Purchases
 
Sales
 
Settlements
 
Transfers
into
Level 3
 
Transfers
out of
Level 3
 
Fair Value 
as of
December 31,
2017(1)
 
Change in Unrealized Gains (Losses) Related to Financial Instruments
Held as of
December 31, 2017
(In millions)
 
Recorded
in
Revenue(1)
 
Recorded
in Other
Comprehensive
Income(1)
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AFS Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
25

 
$
(25
)
 
$
—

 
 
Asset-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loans
97

 
—

 
1

 
200

 
—

 
—

 
—

 
(298
)
 
—

 
 
Other
905

 
3

 
—

 
1,035

 
(240
)
 
(620
)
 
275

 
—

 
1,358

 
 
Total asset-backed securities
1,002

 
3

 
1

 
1,235

 
(240
)
 
(620
)
 
275

 
(298
)
 
1,358

 
 
Non-U.S. debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
—

 
—

 
(2
)
 
119

 
—

 
2

 
—

 
—

 
119

 
 
Asset-backed securities
32

 
1

 
—

 
370

 
(10
)
 
(11
)
 
67

 
(47
)
 
402

 
 
Other
248

 
—

 
1

 
5

 
(81
)
 
31

 
—

 
—

 
204

 
 
Total non-U.S. debt securities
280

 
1

 
(1
)
 
494

 
(91
)
 
22

 
67

 
(47
)
 
725

 
 
State and political subdivisions
39

 
—

 
2

 
—

 
—

 
(3
)
 
5

 
—

 
43

 
 
Collateralized mortgage obligations

16

 
—

 
(1
)
 
24

 
—

 
—

 
—

 
(39
)
 
—

 
 
Other U.S. debt securities
—

 
—

 
—

 
19

 
(19
)
 
—

 
—

 
—

 
—

 
 
Total AFS investment securities
1,337


4


1


1,772

 
(350
)

(601
)

372


(409
)

2,126

 
 
Other assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
8

 
(7
)
 
—

 
4

 
—

 
(4
)
 
—

 
—

 
1

 
$
(3
)
Total derivative instruments
8

 
(7
)
 
—

 
4

 
—

 
(4
)
 
—

 
—

 
1

 
(3
)
Total assets carried at fair value
$
1,345

 
$
(3
)
 
$
1

 
$
1,776

 
$
(350
)
 
$
(605
)
 
$
372

 
$
(409
)
 
$
2,127

 
$
(3
)

 
 
 
 
(1) Total realized and unrealized gains (losses) on AFS investment securities are included within gains (losses) related to investment securities, net. Total realized and unrealized gains (losses) on derivative instruments are included within foreign exchange trading services.
Fair Value Inputs, Liabilities, Quantitative Information
The following table presents quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our level 3 financial assets and liabilities measured at fair value on a recurring basis for which we use internally-developed pricing models. The significant unobservable inputs for our level 3 financial assets and liabilities whose fair value is measured using pricing information from non-binding broker/dealer quotes are not included in the table, as the specific inputs applied are not provided by the broker/dealer.
 
 
Quantitative Information about Level 3 Fair Value Measurements
 
 
Fair Value
 
 
 
 
 
Weighted-Average
(Dollars in millions)
 
As of December 31, 2018
 
As of December 31, 2017
 
Valuation Technique
 
Significant Unobservable Input(1)
 
As of December 31, 2018
 
As of December 31, 2017
Significant unobservable inputs readily available to State Street:
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments, foreign exchange contracts
 
$
4

 
$
1

 
Option model
 
Volatility
 
11.4
%
 
7.2
%
Total
 
$
4

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative instruments, foreign exchange contracts
 
$
4

 
$
1

 
Option model
 
Volatility
 
11.4
%
 
7.2
%
Total
 
$
4

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
(1) Significant changes in these unobservable inputs may result in significant changes in fair value measurement of the derivative instrument.
The following table presents quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our level 3 financial assets and liabilities measured at fair value on a recurring basis for which we use internally-developed pricing models. The significant unobservable inputs for our level 3 financial assets and liabilities whose fair value is measured using pricing information from non-binding broker/dealer quotes are not included in the table, as the specific inputs applied are not provided by the broker/dealer.
 
 
Quantitative Information about Level 3 Fair Value Measurements
 
 
Fair Value
 
 
 
 
 
Weighted-Average
(Dollars in millions)
 
As of December 31, 2018
 
As of December 31, 2017
 
Valuation Technique
 
Significant Unobservable Input(1)
 
As of December 31, 2018
 
As of December 31, 2017
Significant unobservable inputs readily available to State Street:
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments, foreign exchange contracts
 
$
4

 
$
1

 
Option model
 
Volatility
 
11.4
%
 
7.2
%
Total
 
$
4

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative instruments, foreign exchange contracts
 
$
4

 
$
1

 
Option model
 
Volatility
 
11.4
%
 
7.2
%
Total
 
$
4

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
(1) Significant changes in these unobservable inputs may result in significant changes in fair value measurement of the derivative instrument.
Carrying Value and Estimated Fair Value of Financial Instruments by Fair Value Hierarchy
The following tables present the reported amounts and estimated fair values of the financial assets and liabilities not carried at fair value on a recurring basis, as they would be categorized within the fair value hierarchy, as of the dates indicated.
 
 
 
 
 
 
Fair Value Hierarchy
(In millions)
 
Reported Amount 
 
Estimated Fair Value
 
Quoted Market Prices in Active Markets (Level 1)
 
Pricing Methods with Significant Observable Market Inputs (Level 2) 
 
Pricing Methods with Significant Unobservable Market Inputs (Level 3)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
Financial Assets:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
3,597

 
$
3,597

 
$
3,597

 
$
—

 
$
—

Interest-bearing deposits with banks
 
73,040

 
73,040

 
—

 
73,040

 
—

Securities purchased under resale agreements
 
4,679

 
4,679

 
—

 
4,679

 
—

Investment securities held-to-maturity
 
41,914

 
41,351

 
14,541

 
26,688

 
122

Net loans (excluding leases)(1)
 
25,722

 
25,561

 
—

 
24,648

 
913

Other(2)
 
8,500

 
8,500

 
—

 
8,500

 
—

Financial Liabilities:
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
   Non-interest-bearing
 
$
44,804

 
$
44,804

 
$
—

 
$
44,804

 
$
—

   Interest-bearing - U.S.
 
66,235

 
66,235

 
—

 
66,235

 
—

   Interest-bearing - non-U.S.
 
69,321

 
69,321

 
—

 
69,321

 
—

Securities sold under repurchase agreements
 
1,082

 
1,082

 
—

 
1,082

 
—

Other short-term borrowings
 
3,092

 
3,092

 
—

 
3,092

 
—

Long-term debt
 
11,093

 
11,048

 
—

 
10,865

 
183

Other(2)
 
8,500

 
8,500

 
—

 
8,500

 
—


 
 
 
 
(1) Includes $10 million of loans classified as held-for-sale that were measured at fair value on a non-recurring basis as of December 31, 2018.
(2) Represents a portion of underlying client assets related to our enhanced custody business, which clients have allowed us to transfer and re-pledge.
 
 
 
 
 
 
Fair Value Hierarchy
(In millions)
 
Reported Amount 
 
Estimated Fair Value
 
Quoted Market Prices in Active Markets (Level 1)
 
Pricing Methods with Significant Observable Market Inputs (Level 2) 
 
Pricing Methods with Significant Unobservable Market Inputs (Level 3)
December 31, 2017
 
 
 
 
 
 
 
 
 
 
Financial Assets:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
2,107

 
$
2,107

 
$
2,107

 
$
—

 
$
—

Interest-bearing deposits with banks
 
67,227

 
67,227

 
—

 
67,227

 
—

Securities purchased under resale agreements
 
3,241

 
3,241

 
—

 
3,241

 
—

Investment securities held-to-maturity
 
40,458

 
40,255

 
16,814

 
23,318

 
123

Net loans (excluding leases)(1)
 
22,577

 
22,482

 
—

 
22,431

 
51

Financial Liabilities:
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
   Non-interest-bearing
 
$
47,175

 
$
47,175

 
$
—

 
$
47,175

 
$
—

   Interest-bearing - U.S.
 
50,139

 
50,139

 
—

 
50,139

 
—

   Interest-bearing - non-U.S.
 
87,582

 
87,582

 
—

 
87,582

 
—

Securities sold under repurchase agreements
 
2,842

 
2,842

 
—

 
2,842

 
—

Other short-term borrowings
 
1,144

 
1,144

 
—

 
1,144

 
—

Long-term debt
 
11,620

 
11,919

 
—

 
11,639

 
280


 
 
 
 
(1) Includes $3 million of loans classified as held-for-sale that were measured at fair value on a non-recurring basis as of December 31, 2017.