Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2014

Derivatives and Hedging Activities (Tables) [Abstract]

Schedule of derivative instruments in statement of financial position, fair value

The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of March 31, 2014 and December 31, 2013:

		Other Assets				Other Liabilities
		Fair Value				Fair Value
(Millions)		2014		2013		2014		2013
Derivatives designated as hedging instruments:
Interest rate contracts
	Fair value hedges	$	412	$	455	$	11	$	2
Total return contract
	Fair value hedge		―		8		2		―
Foreign exchange contracts
	Net investment hedges		62		174		180		116
Total derivatives designated as hedging instruments			474		637		193		118
Derivatives not designated as hedging instruments:
	Foreign exchange contracts, including certain embedded derivatives^(a)		126		64		54		95
Total derivatives not designated as hedging instruments			126		64		54		95
Total derivatives, gross			600		701		247		213
Cash collateral netting^(b)			(295)		(336)		(12)		―
Derivative asset and derivative liability netting^(c)			(54)		(36)		(54)		(36)
Total derivatives, net^(d)		$	251	$	329	$	181	$	177

Includes foreign currency derivatives embedded in certain operating agreements.
Represents the offsetting of derivative instruments and the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) arising from derivative instrument(s) executed with the same counterparty under an enforceable master netting arrangement. Additionally, the Company posted $50 million and $26 million as of March 31, 2014 and December 31, 2013, respectively, as initial margin on its centrally cleared interest rate swaps; such amounts are not netted against the derivative balances.
Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.
The Company has no individually significant derivative counterparties and therefore, no significant risk exposure to any single derivative counterparty. The total net derivative assets and derivative liabilities are presented within other assets and other liabilities on the Company's Consolidated Balance Sheets.

Effect of fair value hedges on results of operations

The following table summarizes the impact on the Consolidated Statements of Income associated with the Company's hedges of its fixed-rate long-term debt and its investment in ICBC for the three months ended March 31:

For the Three Months Ended March 31: (Millions)
	Gains (losses) recognized in income
	Derivative contract					Hedged item					Net hedge
		Amount					Amount				ineffectiveness
Derivative relationship	Income Statement Line Item	2014		2013		Income Statement Line Item	2014		2013		2014		2013
Interest rate contracts	Other expenses	$	(51)	$	(104)	Other expenses	$	51	$	110	$	―	$	6
Total return contract	Other non-interest revenues		13		4	Other non-interest revenues		(13)		(4)		―		―

Derivative instruments gain loss recognized in income

The following table summarizes the impact on pretax earnings of derivatives not designated as hedges, as reported on the Consolidated Statements of Income for the three months ended March 31:

	Pretax gains
		Amount
Description (Millions)	Income Statement Line Item	2014		2013
Foreign exchange contracts ^(a)	Other non-interest revenues	$	―	$	1
	Other expenses		134		171
Total		$	134	$	172

Foreign exchange contracts include embedded foreign currency derivatives. Gains on these embedded derivatives are included in other expenses.