Regulatory Capital

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

We are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum regulatory capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial condition. Under current regulatory capital adequacy guidelines, we must meet specified capital requirements that involve quantitative measures of our consolidated assets, liabilities and off-balance sheet exposures calculated in conformity with regulatory accounting practices. Our capital components and their classifications are subject to qualitative judgments by regulators about components, risk weightings and other factors.

As required by the Dodd-Frank Act, we and State Street Bank, as advanced approaches banking organizations, are subject to a permanent "capital floor" in the calculation and assessment of regulatory capital adequacy by U.S. banking regulators. Beginning on January 1, 2015, we were required to calculate our risk- based capital ratios using both the advanced approaches and the standardized approach. As a result, from January 1, 2015 going forward, our risk-based capital ratios for regulatory assessment purposes are the lower of each ratio calculated under the standardized approach and the advanced approaches.

The methods for the calculation of our and State Street Bank's risk-based capital ratios have changed as the provisions of the Basel III rule related to the numerator (capital) and denominator (RWA) were phased in, and as we calculated our RWA using the advanced approaches. These ongoing methodological changes have resulted in differences in our reported capital ratios from one reporting period to the next that are independent of applicable changes to our capital base, our asset composition, our off-balance sheet exposures or our risk profile.

As of December 31, 2019, we and State Street Bank exceeded all regulatory capital adequacy requirements to which we were subject. As of December 31, 2019, State Street Bank was categorized as “well capitalized” under the applicable regulatory capital adequacy framework, and exceeded all “well capitalized” ratio guidelines to which it was subject. Management believes that no conditions or events have occurred since December 31, 2019 that have changed the capital categorization of State Street Bank.

The following table presents the regulatory capital structure, total RWA, related regulatory capital ratios and the minimum required regulatory capital ratios for us and State Street Bank as of the dates indicated. As a result of changes in the methodologies used to calculate our regulatory capital ratios from period to period as the provisions of the Basel III rule were phased in, the ratios presented in the table for each period-end are not directly comparable. Refer to the footnotes following the table.

					State Street Corporation												State Street Bank
(Dollars in millions)					Basel III Advanced Approaches December 31, 2019(1)			Basel III Standardized Approach December 31, 2019(1)			Basel III Advanced Approaches December 31, 2018(1)			Basel III Standardized Approach December 31, 2018(1)			Basel III Advanced Approaches December 31, 2019(1)			Basel III Standardized Approach December 31, 2019(1)			Basel III Advanced Approaches December 31, 2018(1)			Basel III Standardized Approach December 31, 2018(1)
Common shareholders' equity:
Common stock and related surplus					$	10,636		$	10,636		$	10,565		$	10,565		$	12,893		$	12,893		$	12,894		$	12,894
Retained earnings					21,918			21,918			20,606			20,606			13,218			13,218			14,261			14,261
Accumulated other comprehensive income (loss)					(870		)	(870		)	(1,332		)	(1,332		)	(654		)	(654		)	(1,112		)	(1,112		)
Treasury stock, at cost					(10,209		)	(10,209		)	(8,715		)	(8,715		)	—			—			—			—
Total					21,475			21,475			21,124			21,124			25,457			25,457			26,043			26,043
Regulatory capital adjustments:
Goodwill and other intangible assets, net of associated deferred tax liabilities					(9,112		)	(9,112		)	(9,350		)	(9,350		)	(8,839		)	(8,839		)	(9,073		)	(9,073		)
Other adjustments					(150		)	(150		)	(194		)	(194		)	(1		)	(1		)	(29		)	(29		)
Common equity tier 1 capital					12,213			12,213			11,580			11,580			16,617			16,617			16,941			16,941
Preferred stock					2,962			2,962			3,690			3,690			—			—			—			—
Tier 1 capital					15,175			15,175			15,270			15,270			16,617			16,617			16,941			16,941
Qualifying subordinated long-term debt					1,095			1,095			778			778			1,099			1,099			776			776
Allowance for loan losses and other					5			90			14			83			3			90			11			83
Total capital					$	16,275		$	16,360		$	16,062		$	16,131		$	17,719		$	17,806		$	17,728		$	17,800
Risk-weighted assets:
Credit risk(2)					$	54,763		$	102,367		$	47,738		$	97,303		$	51,610		$	98,979		$	45,565		$	94,776
Operational risk(3)					47,963			NA			46,060			NA			44,138			NA			44,494			NA
Market risk					1,638			1,638			1,517			1,517			1,638			1,638			1,517			1,517
Total risk-weighted assets					$	104,364		$	104,005		$	95,315		$	98,820		$	97,386		$	100,617		$	91,576		$	96,293
Adjusted quarterly average assets					$	219,624		$	219,624		$	211,924		$	211,924		$	216,397		$	216,397		$	209,413		$	209,413
Capital Ratios:	2019 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(4)		2018 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(5)
Common equity tier 1 capital	8.5	%	7.5	%	11.7		%	11.7		%	12.1		%	11.7		%	17.1		%	16.5		%	18.5		%	17.6		%
Tier 1 capital	10.0		9.0		14.5			14.6			16.0			15.5			17.1			16.5			18.5			17.6
Total capital	12.0		11.0		15.6			15.7			16.9			16.3			18.2			17.7			19.4			18.5

⁽¹⁾ Other adjustments within CET1 primarily include the overfunded portion of the firm’s defined benefit pension plan obligation net of associated deferred tax liabilities, disallowed deferred tax assets, and other required credit risk based deductions.

⁽²⁾ Includes a CVA which reflects the risk of potential fair value adjustments for credit risk reflected in our valuation of OTC derivative contracts. We used a simple CVA approach in conformity with the Basel III advanced approaches.

⁽³⁾  Under the current advanced approaches rules and regulatory guidance concerning operational risk models, RWA attributable to operational risk can vary substantially from period-to-period, without direct correlation to the effects of a particular loss event on our results of operations and financial condition and impacting dates and periods that may differ from the dates and periods as of and during which the loss event is reflected in our financial statements, with the timing and categorization dependent on the processes for model updates and, if applicable, model revalidation and regulatory review and related supervisory processes. An individual loss event can have a significant effect on the output of our operational RWA under the advanced approaches depending on the severity of the loss event and its categorization among the seven Basel-defined UOMs.

⁽⁴⁾ Minimum requirements were phased in with full implementation beginning on January 1, 2019; minimum requirements listed are as of December 31, 2019.

⁽⁵⁾ Minimum requirements were phased in with full implementation beginning on January 1, 2019; minimum requirements listed are as of December 31, 2018.

^NA Not applicable