Quarterly report pursuant to Section 13 or 15(d)

Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings

v2.4.0.8
Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings
 6 Months Ended
Jun. 30, 2014
Federal Funds Sold, Securities Borrowed or Purchased Under Agreements to Resell and Short-term Borrowings [Abstract]  
Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings
NOTE 9 – Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings

The table below presents federal funds sold or purchased, securities financing agreements, which include securities borrowed or purchased under agreements to resell and securities loaned or sold under agreements to repurchase, and short-term borrowings.

 
Three Months Ended June 30
 
Six Months Ended June 30
 
Amount
 
Rate
 
Amount
 
Rate
(Dollars in millions)
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Average during period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold
$
6

 
$
13

 
0.90
%
 
0.65
%
 
$
4

 
$
8

 
0.85
%
 
0.64
%
Securities borrowed or purchased under agreements to resell
235,387

 
233,381

 
0.51

 
0.55

 
224,008

 
235,409

 
0.51

 
0.54

Total
$
235,393

 
$
233,394

 
0.51

 
0.55

 
$
224,012

 
$
235,417

 
0.51

 
0.54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased
$
166

 
$
188

 
0.05
%
 
0.09
%
 
$
170

 
$
191

 
0.04
%
 
0.07
%
Securities loaned or sold under agreements to repurchase
222,358

 
270,602

 
1.10

 
0.85

 
213,544

 
285,590

 
1.07

 
0.78

Short-term borrowings
48,723

 
47,238

 
1.26

 
1.98

 
48,447

 
42,001

 
1.01

 
2.15

Total
$
271,247

 
$
318,028

 
1.13

 
1.02

 
$
262,161

 
$
327,782

 
1.06

 
0.96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum month-end balance during period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold
$
12

 
$
5

 
 
 
 
 
$
12

 
$
5

 
 
 
 
Securities borrowed or purchased under agreements to resell
240,110

 
240,881

 
 
 
 
 
240,110

 
249,791

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased
$
170

 
$
195

 
 
 
 
 
$
213

 
$
195

 
 
 
 
Securities loaned or sold under agreements to repurchase
239,984

 
290,699

 
 
 
 
 
239,984

 
319,608

 
 
 
 
Short-term borrowings
50,071

 
46,470

 
 
 
 
 
51,409

 
46,470

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2014
 
 
 
December 31, 2013
 
 
 
 
 
Amount
 
Rate
 
 
 
 
 
Amount
 
Rate
 
 
 
 
Period-end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities borrowed or purchased under agreements to resell
$
229,449

 
0.32
%
 
 
 
 
 
$
190,328

 
0.60
%
 
 
 
 
Total
$
229,449

 
0.32

 
 
 
 
 
$
190,328

 
0.60

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds purchased
$
122

 
0.03
%
 
 
 
 
 
$
186

 
—
%
 
 
 
 
Securities loaned or sold under agreements to repurchase
217,707

 
0.85

 
 
 
 
 
197,920

 
0.92

 
 
 
 
Short-term borrowings
45,873

 
1.08

 
 
 
 
 
45,999

 
1.55

 
 
 
 
Total
$
263,702

 
0.89

 
 
 
 
 
$
244,105

 
1.03

 
 
 
 


Offsetting of Securities Financing Agreements

Substantially all of the Corporation's repurchase and resale activities are transacted under legally enforceable master repurchase agreements that give the Corporation, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the same counterparty. The Corporation offsets repurchase and resale transactions with the same counterparty on the Consolidated Balance Sheet where it has such a legally enforceable master netting agreement and the transactions have the same maturity date.

Substantially all securities borrowing and lending activities are transacted under legally enforceable master securities lending agreements that give the Corporation, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the same counterparty. The Corporation offsets securities borrowing and lending transactions with the same counterparty on the Consolidated Balance Sheet where it has such a legally enforceable master netting agreement and the transactions have the same maturity date.

The Securities Financing Agreements table presents securities financing agreements included on the Consolidated Balance Sheet in federal funds sold and securities borrowed or purchased under agreements to resell, and in federal funds purchased and securities loaned or sold under agreements to repurchase at June 30, 2014 and December 31, 2013. Balances are presented on a gross basis, prior to the application of counterparty netting. Gross assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements. For more information on the offsetting of derivatives, see Note 2 – Derivatives.

The "Other" amount in the Securities Financing Agreements table, which is included on the Consolidated Balance Sheet in other assets and in accrued expenses and other liabilities, relates to transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged or sold as collateral. In these transactions, the Corporation recognizes an asset at fair value, representing the securities received, and a liability for the same amount, representing the obligation to return those securities.

Gross assets and liabilities include activity where uncertainty exists as to the enforceability of certain master netting agreements under bankruptcy laws in some countries or industries and, accordingly, these are reported on a gross basis.

The column titled "Financial Instruments" in the Securities Financing Agreements table includes securities collateral received or pledged under repurchase or securities lending agreements where there is a legally enforceable master netting agreement. These amounts are not offset on the Consolidated Balance Sheet, but are shown as a reduction to the net balance sheet amount in this table to derive a net asset or liability. Securities collateral received or pledged where the legal enforceability of the master netting agreements is not certain is not included.

Securities Financing Agreements
 
June 30, 2014
(Dollars in millions)
Gross Assets/Liabilities
 
Amounts Offset
 
Net Balance Sheet Amount
 
Financial Instruments
 
Net Assets/Liabilities
Securities borrowed or purchased under agreements to resell
$
333,523

 
$
(104,074
)
 
$
229,449

 
$
(173,314
)
 
$
56,135

 
 
 
 
 
 
 
 
 
 
Securities loaned or sold under agreements to repurchase
$
321,781

 
$
(104,074
)
 
$
217,707

 
$
(166,331
)
 
$
51,376

Other
11,348

 
—

 
11,348

 
(11,348
)
 
—

Total
$
333,129

 
$
(104,074
)
 
$
229,055

 
$
(177,679
)
 
$
51,376

 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
Securities borrowed or purchased under agreements to resell
$
272,296

 
$
(81,968
)
 
$
190,328

 
$
(157,132
)
 
$
33,196

 
 
 
 
 
 
 
 
 
 
Securities loaned or sold under agreements to repurchase
$
279,888

 
$
(81,968
)
 
$
197,920

 
$
(160,111
)
 
$
37,809

Other
10,871

 
—

 
10,871

 
(10,871
)
 
—

Total
$
290,759

 
$
(81,968
)
 
$
208,791

 
$
(170,982
)
 
$
37,809