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Derivative instruments
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative instruments Derivative instruments
We use derivatives to manage exposure to market risk, including interest rate risk, equity price risk and foreign currency risk, as well as credit risk. Our trading activities are focused on acting as a market-maker for our customers and facilitating customer trades in compliance with the Volcker Rule.

The notional amounts for derivative financial instruments express the dollar volume of the transactions; however, credit risk is much smaller. We perform credit reviews and enter into netting agreements and collateral arrangements to minimize the credit risk of derivative financial instruments. We enter into offsetting positions to reduce exposure to foreign currency, interest rate and equity price risk.

Use of derivative financial instruments involves reliance on counterparties. Failure of a counterparty to honor its obligation under a derivative contract is a risk we assume whenever we engage in a derivative contract. There were no counterparty default losses recorded in the third quarter of 2025.

Hedging derivatives

We utilize interest rate swap agreements, including forward starting swaps, to manage our exposure to interest rate fluctuations. We enter into fair value hedges as an interest rate risk management strategy to reduce fair value variability by converting certain fixed rate interest payments associated with available-for-sale securities, loans and long-term debt to floating interest rates. We also utilize interest rate swaps and forward exchange contracts as cash flow hedges to manage our exposure to interest rate and foreign exchange rate changes. In designating interest rate swaps as hedges, we utilize both partial-term and full-term hedge strategies. In addition, the Company utilizes portfolio layer method hedge strategies to manage interest rate risk of certain closed portfolios of fixed rate securities and loans. Throughout the period of a portfolio layer method hedge, basis adjustments are maintained at the portfolio level and are only allocated to individual assets at the time in which the hedge is voluntarily de-designated.
The available-for-sale securities hedged consist of U.S. Treasury, U.S. government agency, agency and non-agency commercial MBS, agency and non-agency RMBS, non-U.S. government and foreign covered bonds. At Sept. 30, 2025, $35.2 billion designated par value of available-for-sale securities were hedged with interest rate swaps designated as fair value hedges that had notional values of $35.0 billion.

At Sept. 30, 2025, $1.4 billion of interest rate swaps were designated as portfolio layer method fair value hedges of loans against a closed portfolio of fixed rate loans of $3.0 billion, essentially converting $1.4 billion of fixed rate loans to floating rates.

The fixed rate long-term debt instruments hedged generally have original maturities of five to 30 years. In fair value hedging relationships, fixed rate debt is hedged with “receive fixed rate, pay variable rate” swaps. At Sept. 30, 2025, $29.8 billion par value of debt was hedged with interest rate swaps designated as fair value hedges that had notional values of $29.8 billion.

In addition, we utilize forward foreign exchange contracts as hedges to mitigate foreign exchange exposures. We use forward foreign exchange contracts as cash flow hedges to convert certain
forecasted non-U.S. dollar revenue and expenses into U.S. dollars. We use forward foreign exchange contracts with maturities of 15 months or less as cash flow hedges to hedge our foreign exchange exposure to currencies such as the Indian rupee, euro, Polish zloty, British pound, Singapore dollar and Hong Kong dollar used in revenue and expense transactions for entities that have the U.S. dollar as their functional currency. As of Sept. 30, 2025, the hedged forecasted foreign currency transactions and designated forward foreign exchange contract hedges were $760 million (notional), with a net pre-tax loss of $16 million recorded in accumulated OCI. Over the next 12 months, a loss of $16 million will be reclassified into earnings.

Forward foreign exchange contracts are also used to hedge the value of our net investments in foreign subsidiaries. These forward foreign exchange contracts have maturities of less than one year. The derivatives employed are designated as hedges of changes in the value of our foreign investments due to exchange rates. The change in fair market value of these forward foreign exchange contracts is reported within foreign currency translation adjustments in shareholders’ equity, net of tax. At Sept. 30, 2025, forward foreign exchange contracts with notional amounts totaling $10.7 billion were designated as net investment hedges.


The following table presents the pre-tax gains (losses) related to our fair value and cash flow hedging activities recognized in the consolidated income statement.

Income statement impact of fair value and cash flow hedges
(in millions)Location of gains (losses)3Q252Q253Q24YTD25YTD24
Interest rate fair value hedges of available-for-sale securities
DerivativeInterest income$(40)$(249)$(973)$(687)$(445)
Hedged itemInterest income41 249 971 688 445 
Interest rate fair value hedges of long-term debt
DerivativeInterest expense98 275 643 784 435 
Hedged itemInterest expense(98)(275)(643)(784)(435)
Interest rate fair value hedges of loans
DerivativeInterest income(2)2 (25)(11)(40)
Hedged itemInterest income2 (2)25 11 40 
Cash flow hedges of forecasted FX exposures
(Loss) gain reclassified from OCI into incomeStaff expense(1)— 1 (5)5 
(Loss) reclassified from OCI into incomeInvestment and other revenue(3)(1)— (3)— 
(Loss) gain recognized in the consolidated income statement due to fair value and cash flow hedging relationships$(3)$(1)$(1)$(7)$5 
The following table presents the impact of hedging derivatives used in net investment hedging relationships.

Impact of derivative instruments used in net investment hedging relationships
(in millions)
Derivatives in net investment hedging relationshipsGain or (loss) recognized in
accumulated OCI on derivatives		Location of gain or (loss) reclassified from accumulated OCI into income Gain or (loss) reclassified from
accumulated OCI into income
3Q252Q253Q24YTD25YTD243Q252Q253Q24YTD25YTD24
FX contracts$168 $(735)$(391)$(943)$(106)Investment and other revenue$— $— $— $21 $— 


The following table presents information on the hedged items in fair value hedging relationships.

Hedged items in fair value hedging relationshipsCarrying amount of hedged
asset or liability
Hedge accounting basis adjustment increase (decrease) (a)
(in millions)Sept. 30, 2025Dec. 31, 2024Sept. 30, 2025Dec. 31, 2024
Available-for-sale securities (b)
$41,777 $40,751 $(801)$(1,650)
Loans (c)
$3,012 $3,162 $4 $(7)
Long-term debt$29,497 $27,458 $(246)$(1,042)
(a)    Includes $363 million and $474 million of basis adjustment decreases on discontinued hedges associated with available-for-sale securities at Sept. 30, 2025 and Dec. 31, 2024, respectively, and $7 million of basis adjustment increases and $5 million of basis adjustment decreases on discontinued hedges associated with long-term debt at Sept. 30, 2025 and Dec. 31, 2024, respectively.
(b)    At Sept. 30, 2025 and Dec. 31, 2024, the amortized cost of the available-for-sale securities included in closed portfolios subject to portfolio layer method hedging was $14.3 billion and $12.1 billion, respectively, of which the notional amount hedged was $6.8 billion and $6.2 billion, respectively. The cumulative basis adjustments for active hedging relationships associated with such hedges as of Sept. 30, 2025 and Dec. 31, 2024 were an increase of $64 million and a decrease of $92 million, respectively.
(c)    At Sept. 30, 2025 and Dec. 31, 2024, loans included in closed portfolios subject to portfolio layer method hedging were $3.0 billion and $3.2 billion, respectively, of which $1.4 billion and $1.4 billion, respectively, was designated as hedged.


The following table summarizes the notional amount and carrying values of our total derivatives portfolio.

Impact of derivative instruments on the balance sheetNotional valueAsset derivatives
fair value		Liability derivatives
fair value
Sept. 30, 2025Dec. 31, 2024Sept. 30, 2025Dec. 31, 2024Sept. 30, 2025Dec. 31, 2024
(in millions)
Derivatives designated as hedging instruments: (a)(b)
Interest rate contracts$66,113 $66,805 $280 $326 $— $— 
Foreign exchange contracts11,506 12,048 48 455 357 12 
Total derivatives designated as hedging instruments  $328 $781 $357 $12 
Derivatives not designated as hedging instruments: (b)(c)
Interest rate contracts$194,382 $169,523 $759 $835 $962 $1,210 
Foreign exchange contracts1,245,374 919,690 4,171 10,559 4,015 10,636 
Equity contracts5,737 5,321 13 143 173 34 
Credit contracts329 324 — — 13 17 
Total derivatives not designated as hedging instruments$4,943 $11,537 $5,163 $11,897 
Total derivatives fair value (d)
$5,271 $12,318 $5,520 $11,909 
Effect of master netting agreements (e)
(3,524)(8,612)(4,278)(9,033)
Fair value after effect of master netting agreements$1,747 $3,706 $1,242 $2,876 
(a)    The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the consolidated balance sheet.
(b)    For settled-to-market derivatives at clearing organizations, cash collateral exchanged is deemed a settlement of the derivative on a daily basis. The gross fair value of derivative assets and liabilities has been reduced by these cash settlements.
(c)    The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the consolidated balance sheet.
(d)    Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging.
(e)    Effect of master netting agreements includes cash collateral received and paid of $635 million and $1,389 million, respectively, at Sept. 30, 2025, and $1,953 million and $2,374 million, respectively, at Dec. 31, 2024.
Trading activities (including trading derivatives)

Our trading activities are focused on acting as a market-maker for our customers, facilitating customer trades and risk-mitigating economic hedging in compliance with the Volcker Rule. The change in the fair value of the derivatives utilized in our trading activities is recorded in foreign exchange revenue and investment and other revenue on the consolidated income statement.

The following table presents our foreign exchange revenue and other trading revenue.

Foreign exchange revenue and other trading revenue
(in millions)3Q252Q253Q24YTD25YTD24
Foreign exchange revenue$166 $213 $175 $535 $511 
Other trading revenue73 59 79 203 225 


Foreign exchange revenue includes income from purchasing and selling foreign currencies, currency forwards, futures and options as well as foreign currency remeasurement. Other trading revenue reflects results from trading in cash instruments, including fixed income and equity securities, and trading and economic hedging activity with non-foreign exchange derivatives.

We also use derivative financial instruments as risk-mitigating economic hedges, which are not formally designated as accounting hedges. This includes hedging the foreign currency, interest rate or market risks inherent in some of our balance sheet exposures, such as seed capital investments and deposits, as well as certain investment management fee revenue streams. We also use total return swaps to economically hedge obligations arising from the Company’s deferred compensation plan whereby the participants defer compensation and earn a return linked to the performance of investments they select. The gains or losses on these total return swaps are recorded in staff expense on the consolidated income statement. We recorded gains of $12 million in the third quarter of 2025, $11 million in the third quarter of 2024, $15 million in the second quarter of 2025, $19 million in the first nine months of 2025 and $22 million in the first nine months of 2024.

We manage trading risk through a system of position limits, a value-at-risk (“VaR”) methodology based on historical simulation and other market sensitivity measures. Risk is monitored and reported to senior management by a separate unit, independent from trading, on a daily basis. Based on certain assumptions, the VaR methodology is designed to capture the potential overnight pre-tax dollar loss from adverse changes in fair values of all trading positions. The calculation assumes a one-day holding period, utilizes a 99% confidence level and incorporates non-linear product characteristics. The VaR model is one of several statistical models used to develop economic capital results, which are allocated to lines of business for computing risk-adjusted performance.

VaR methodology does not evaluate risk attributable to extraordinary financial, economic or other occurrences. As a result, the risk assessment process includes a number of stress scenarios based upon the risk factors in the portfolio and management’s assessment of market conditions. Additional stress scenarios based upon historical market events are also performed. Stress tests may incorporate the impact of reduced market liquidity and the breakdown of historically observed correlations and extreme scenarios. VaR and other statistical measures, stress testing and sensitivity analysis are incorporated into other risk management materials.

Counterparty credit risk and collateral

We assess the credit risk of our counterparties through regular examination of their financial statements, confidential communication with the management of those counterparties and regular monitoring of publicly available credit rating information. This and other information are used to develop proprietary credit rating metrics used to assess credit quality.

Collateral requirements are determined after a comprehensive review of the credit quality of each counterparty. Collateral is generally held or pledged in the form of cash and/or highly liquid government securities. Collateral requirements are monitored and adjusted daily.

Additional disclosures concerning derivative financial instruments are provided in Note 14.

Disclosure of contingent features in over-the-counter (“OTC”) derivative instruments

Certain OTC derivative contracts and/or collateral agreements contain credit risk-contingent features triggered upon a rating downgrade in which the counterparty has the right to request additional collateral or the right to terminate the contracts in a net liability position.

The following table shows the aggregate fair value of OTC derivative contracts in net liability positions that contained credit risk-contingent features and the value of collateral that has been posted.

Sept. 30, 2025Dec. 31, 2024
(in millions)
Aggregate fair value of OTC derivatives in net liability positions (a)
$1,070 $2,163 
Collateral posted$1,564 $1,940 
(a)    Before consideration of cash collateral.


The aggregate fair value of OTC derivative contracts containing credit risk-contingent features can fluctuate from quarter to quarter due to changes in market conditions, composition of counterparty trades, new business or changes to the contingent features.

The Bank of New York Mellon, our largest banking subsidiary, enters into the substantial majority of our OTC derivative contracts and/or collateral agreements. As such, the contingent features may be triggered if The Bank of New York Mellon’s long-term issuer rating were downgraded.

The following table shows the fair value of contracts falling under early termination provisions that were in net liability positions for three key ratings triggers.

Potential close-out exposures (fair value) (a)
Sept. 30, 2025Dec. 31, 2024
(in millions)
If The Bank of New York Mellon’s rating changed to: (b)
A3/A-$6 $40 
Baa2/BBB$73 $646 
Ba1/BB+$1,162 $2,710 
(a)    The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted.
(b)    Represents ratings by Moody’s/S&P.


If The Bank of New York Mellon’s debt rating had fallen below investment grade on Sept. 30, 2025 and Dec. 31, 2024, existing collateral arrangements would have required us to post additional collateral of $61 million and $351 million, respectively.
Offsetting assets and liabilities

The following tables present derivative instruments and financial instruments and their related offsets. There were no derivative instruments or financial instruments subject to a legally enforceable netting agreement for which we are not currently netting.

Offsetting of derivative assets and financial assets at Sept. 30, 2025
Gross assets recognizedGross amounts offset in the balance sheet Net assets recognized in the balance sheetGross amounts not offset in the balance sheet
(in millions)(a)Financial instrumentsCash collateral receivedNet amount
Derivatives subject to netting arrangements:
Interest rate contracts$860 $675 $185 $47 $— $138 
Foreign exchange contracts3,864 2,836 1,028 66 — 962 
Equity and other contracts13 13 — — — — 
Total derivatives subject to netting arrangements
4,737 3,524 1,213 113 — 1,100 
Total derivatives not subject to netting arrangements
534 — 534 — — 534 
Total derivatives5,271 3,524 1,747 113 — 1,634 
Reverse repurchase agreements302,553 278,763 (b)23,790 23,750 — 40 
Securities borrowing23,800 5,727 18,073 17,436 — 637 
Total$331,624 $288,014 $43,610 $41,299 $— $2,311 
(a)    Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
(b)    Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation (“FICC”), where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
Offsetting of derivative assets and financial assets at Dec. 31, 2024
Gross assets recognizedGross amounts offset in the balance sheet Net assets recognized
in the
balance sheet		Gross amounts not offset in the balance sheet
(in millions)(a)Financial instrumentsCash collateral receivedNet amount
Derivatives subject to netting arrangements:
Interest rate contracts$1,032 $835 $197 $46 $— $151 
Foreign exchange contracts10,210 7,698 2,512 132 — 2,380 
Equity and other contracts131 79 52 — — 52 
Total derivatives subject to netting arrangements
11,373 8,612 2,761 178 — 2,583 
Total derivatives not subject to netting arrangements
945 — 945 — — 945 
Total derivatives12,318 8,612 3,706 178 — 3,528 
Reverse repurchase agreements252,941 228,386 (b)24,555 24,523 1 31 
Securities borrowing18,144 1,553 16,591 15,777 — 814 
Total$283,403 $238,551 $44,852 $40,478 $1 $4,373 
(a)    Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
(b)    Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.


Offsetting of derivative liabilities and financial liabilities at Sept. 30, 2025
Net liabilities recognized in the balance sheet
Gross liabilities recognizedGross amounts offset in the balance sheet Gross amounts not offset in the balance sheet
(in millions)(a)Financial instrumentsCash collateral pledgedNet amount
Derivatives subject to netting arrangements:
Interest rate contracts$735 $470 $265 $40 $— $225 
Foreign exchange contracts4,172 3,659 513 79 — 434 
Equity and other contracts166 149 17 15 — 2 
Total derivatives subject to netting arrangements
5,073 4,278 795 134 — 661 
Total derivatives not subject to netting arrangements
447 — 447 — — 447 
Total derivatives5,520 4,278 1,242 134 — 1,108 
Repurchase agreements291,545 278,763 (b)12,782 12,782 — — 
Securities lending9,530 5,727 3,803 3,683 — 120 
Total$306,595 $288,768 $17,827 $16,599 $— $1,228 
(a)    Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
(b)    Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.


Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2024
Net liabilities recognized
in the
balance sheet
Gross liabilities recognizedGross amounts offset in the balance sheet Gross amounts not offset in the balance sheet
(in millions)(a)Financial instrumentsCash collateral pledgedNet amount
Derivatives subject to netting arrangements:
Interest rate contracts$875 $475 $400 $42 $— $358 
Foreign exchange contracts9,938 8,533 1,405 208 — 1,197 
Equity and other contracts34 25 9 — — 9 
Total derivatives subject to netting arrangements
10,847 9,033 1,814 250 — 1,564 
Total derivatives not subject to netting arrangements
1,062 — 1,062 — — 1,062 
Total derivatives11,909 9,033 2,876 250 — 2,626 
Repurchase agreements239,957 228,386 (b)11,571 11,556 2 13 
Securities lending4,046 1,553 2,493 2,277 — 216 
Total$255,912 $238,972 $16,940 $14,083 $2 $2,855 
(a)    Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.
(b)    Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.
Secured borrowings

The following table presents the contract value of repurchase agreements and securities lending transactions accounted for as secured borrowings by the type of collateral provided to counterparties.

Repurchase agreements and securities lending transactions accounted for as secured borrowings
Sept. 30, 2025Dec. 31, 2024
Remaining contractual maturityTotalRemaining contractual maturityTotal
(in millions)Overnight and continuousUp to 30 days30-90 daysOver 90 daysOvernight and continuousUp to 30 days30-90 daysOver 90
days
Repurchase agreements:
U.S. Treasury$219,592 $105 $1,110 $1,867 $222,674 $187,227 $196 $739 $742 $188,904 
Agency RMBS62,227 234 171 229 62,861 44,774 71 288 295 45,428 
Corporate bonds120 146 1,397 802 2,465 84 81 1,341 741 2,247 
Sovereign debt/sovereign guaranteed94 803 — — 897 123 655 17 — 795 
State and political subdivisions20 21 399 215 655 37 14 414 302 767 
U.S. government agencies87 8 25 69 189 131 — 64 115 310 
Other debt securities69 510 262 6 847 19 278 287 12 596 
Equity securities— — 661 296 957 — 4 592 314 910 
Total $282,209 $1,827 $4,025 $3,484 $291,545 $232,395 $1,299 $3,742 $2,521 $239,957 
Securities lending:
Agency RMBS$63 $— $— $— $63 $98 $— $— $— $98 
Other debt securities1,319 — — — 1,319 253 — — — 253 
Equity securities8,148 — — — 8,148 3,695 — — — 3,695 
Total $9,530 $— $— $— $9,530 $4,046 $— $— $— $4,046 
Total secured borrowings$291,739 $1,827 $4,025 $3,484 $301,075 $236,441 $1,299 $3,742 $2,521 $244,003 
BNY’s repurchase agreements and securities lending transactions primarily encounter risk associated with liquidity. We are required to pledge collateral based on predetermined terms within the agreements. If we were to experience a decline in the fair value of the collateral pledged for these transactions, we could be required to provide additional collateral to the counterparty, therefore decreasing the amount of assets available for other liquidity needs that may arise. BNY also offers tri-party collateral agency services in the tri-party repo market where we are exposed to credit risk. In order to mitigate this risk, we require dealers to fully secure intraday credit.