Quarterly report pursuant to Section 13 or 15(d)

Fair Value Option (Tables)

v3.22.2
Fair Value Option (Tables)
 6 Months Ended
Jun. 30, 2022
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Option Elections The following tables provide information about the fair value carrying amount and the contractual principal outstanding of assets and liabilities accounted for under the fair value option at June 30, 2022 and December 31, 2021, and information about where changes in the fair value of assets and liabilities accounted for under the fair value option are included in the Consolidated Statement of Income for the three and six months ended June 30, 2022 and 2021.
Fair Value Option Elections
June 30, 2022 December 31, 2021
(Dollars in millions)
 Fair Value
 Carrying
 Amount		 Contractual
 Principal
 Outstanding		 Fair Value
Carrying
Amount Less
 Unpaid Principal		 Fair Value
Carrying
Amount		 Contractual
 Principal
 Outstanding		 Fair Value
Carrying
  Amount Less
 Unpaid Principal
Federal funds sold and securities borrowed or purchased under agreements to resell
 $ 154,287  $ 154,412  $ (125) $ 150,665  $ 150,677  $ (12)
Loans reported as trading account assets (1)
11,234  19,087  (7,853) 10,864  18,895  (8,031)
Trading inventory – other 18,638  n/a n/a 21,986  n/a n/a
Consumer and commercial loans 5,496  5,670  (174) 7,819  7,888  (69)
Loans held-for-sale (1)
1,870  2,876  (1,006) 4,455  5,343  (888)
Other assets 583  n/a n/a 544  n/a n/a
Long-term deposits 444  486  (42) 408  401  7 
Federal funds purchased and securities loaned or sold under agreements to repurchase
 145,165  145,296  (131) 139,641  139,682  (41)
Short-term borrowings 2,931  3,196  (265) 4,279  4,127  152 
Unfunded loan commitments 220  n/a n/a 97  n/a n/a
Long-term debt 28,375  32,954  (4,579) 29,708  30,903  (1,195)
(1)A significant portion of the loans reported as trading account assets and LHFS are distressed loans that were purchased at a deep discount to par, and the remainder are loans with a fair value near contractual principal outstanding.
n/a = not applicable
Gains (Losses) Related to Assets and Liabilities Accounted for Under the Fair Value Option
Three Months Ended June 30
2022 2021
(Dollars in millions) Market making
 and similar
 activities		 Other
Income		 Total Market making
 and similar
 activities		 Other
Income		 Total
Loans reported as trading account assets $ (153) $ —  $ (153) $ 171  $ —  $ 171 
Trading inventory – other (1)
(2,588) —  (2,588) 2,304  —  2,304 
Consumer and commercial loans (48) (65) (113) 43  26  69 
Loans held-for-sale (2)
—  (90) (90) —  23  23 
Short-term borrowings 3  —  3  61  —  61 
Unfunded loan commitments —  (81) (81) —  (11) (11)
Long-term debt (3)
2,363  (9) 2,354  (1,047) (8) (1,055)
Other (4)
(1) 7  6  (1) (46) (47)
Total (5)
$ (424) $ (238) $ (662) $ 1,531  $ (16) $ 1,515 
Six Months Ended June 30
2022 2021
Loans reported as trading account assets $ (149) $ —  $ (149) $ 283  $ —  $ 283 
Trading inventory – other (1)
(2,128) —  (2,128) 1,574  —  1,574 
Consumer and commercial loans (70) (78) (148) 114  45  159 
Loans held-for-sale (2)
—  (222) (222) —  11  11 
Short-term borrowings 562  —  562  474  —  474 
Unfunded loan commitments —  (88) (88) —  (6) (6)
Long-term debt (3)
3,487  (20) 3,467  (661) (24) (685)
Other (4)
(6) 24  18  11  (24) (13)
Total (5)
$ 1,696  $ (384) $ 1,312  $ 1,795  $ 2  $ 1,797 
(1)    The gains (losses) in market making and similar activities are primarily offset by (losses) gains on trading liabilities that hedge these assets.
(2)    Includes the value of IRLCs on funded loans, including those sold during the period.
(3)    The net gains (losses) in market making and similar activities relate to the embedded derivatives in structured liabilities and are typically offset by (losses) gains on derivatives and securities that hedge these liabilities. For the cumulative impact of changes in the Corporation’s own credit spreads and the amount recognized in accumulated OCI, see Note 12 – Accumulated Other Comprehensive Income (Loss). For more information on how the Corporation’s own credit spread is determined, see Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.
(4)    Includes gains (losses) on federal funds sold and securities borrowed or purchased under agreements to resell, other assets, long-term deposits and federal funds purchased and securities loaned or sold under agreements to repurchase.
(5)    The net gains (losses) related to borrower-specific credit risk for the three and six months ended June 30, 2022 were $(432) million and $(501) million compared to $133 million and $211 million for the same periods in 2021