Off-Balance Sheet Lending-Related Financial Instruments, Guarantees and Other Commitments (Tables)

9 Months Ended

Sep. 30, 2012

Off-Balance Sheet Lending-Related Financial Instruments, Guarantees and Other Commitments [Abstract]

Off-Balance Sheet Lending Related Financial Instruments, and Guarantees and Other Commitments

The following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at September 30, 2012, and December 31, 2011. The amounts in the table below for credit card and home equity lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card lines of credit by providing the borrower notice or, in some cases, without notice as permitted by law. The Firm may reduce or close home equity lines of credit when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower. Also, the Firm typically closes credit card lines when the borrower is 60 days or more past due.

Off–balance sheet lending-related financial instruments, guarantees and other commitments
	Contractual amount												Carrying value(i)
	Sep 30, 2012										Dec 31, 2011		Sep 30, 2012			Dec 31, 2011
By remaining maturity (in millions)	Expires in 1 year or less		Expires after 1 year through 3 years		Expires after 3 years through 5 years		Expires after 5 years		Total		Total
Lending-related
Consumer, excluding credit card:
Home equity – senior lien	$	1,712	$	5,243	$	4,709	$	3,901	$	15,565	$	16,542	$	—		$	—
Home equity – junior lien	3,400		8,610		6,597		4,339		22,946		26,408		—			—
Prime mortgage	4,040		—		—		—		4,040		1,500		—			—
Subprime mortgage	—		—		—		—		—		—		—			—
Auto	7,100		155		165		18		7,438		6,694		1			1
Business banking	10,435		499		89		360		11,383		10,299		6			6
Student and other	99		220		16		476		811		864		—			—
Total consumer, excluding credit card	26,786		14,727		11,576		9,094		62,183		62,307		7			7
Credit card	534,333		—		—		—		534,333		530,616		—			—
Total consumer	561,119		14,727		11,576		9,094		596,516		592,923		7			7
Wholesale:
Other unfunded commitments to extend credit(a)(b)	59,537		72,835		95,548		8,988		236,908		215,251		438			347
Standby letters of credit and other financial guarantees(a)(b)(c)(d)	27,151		31,116		40,905		1,733		100,905		101,899		679			696
Unused advised lines of credit	65,190		13,808		350		502		79,850		60,203		—			—
Other letters of credit(a)(d)	3,934		884		76		—		4,894		5,386		1			2
Total wholesale	155,812		118,643		136,879		11,223		422,557		382,739		1,118			1,045
Total lending-related	$	716,931	$	133,370	$	148,455	$	20,317	$	1,019,073	$	975,662	$	1,125		$	1,052
Other guarantees and commitments
Securities lending indemnifications(e)	$	183,716	$	—	$	—	$	—	$	183,716	$	186,077	NA			NA
Derivatives qualifying as guarantees	1,725		8,287		19,887		36,611		66,510		75,593		$	230		$	457
Unsettled reverse repurchase and securities borrowing agreements(f)	41,497		—		—		—		41,497		39,939		—			—
Loan sale and securitization-related indemnifications:
Mortgage repurchase liability(g)	NA		NA		NA		NA		NA		NA		3,099			3,557
Loans sold with recourse	NA		NA		NA		NA		9,651		10,397		142			148
Other guarantees and commitments(h)	666		205		387		5,569		6,827		6,321		(75		)	(5		)

(a) At September 30, 2012, and December 31, 2011, reflects the contractual amount net of risk participations totaling $589 million and $1.1 billion, respectively, for other unfunded commitments to extend credit; $18.2 billion and $19.8 billion, respectively, for standby letters of credit and other financial guarantees; and $913 million and $974 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.

(b) At September 30, 2012, and December 31, 2011, included credit enhancements and bond and commercial paper liquidity commitments to U.S. states and municipalities, hospitals and other not-for-profit entities of $45.7 billion and $48.6 billion, respectively. These commitments also include liquidity facilities to nonconsolidated municipal bond VIEs; for further information, see Note 15 on pages 177–184 of this Form 10-Q.

(c) At September 30, 2012, and December 31, 2011, included unissued standby letters of credit commitments of $44.4 billion and $44.1 billion, respectively.

(d) At September 30, 2012, and December 31, 2011, JPMorgan Chase held collateral relating to $43.3 billion and $41.5 billion, respectively, of standby letters of credit; and $795 million and $1.3 billion, respectively, of other letters of credit.

(e) At September 30, 2012, and December 31, 2011, collateral held by the Firm in support of securities lending indemnification agreements was $184.5 billion and $186.3 billion, respectively. Securities lending collateral comprises primarily cash and securities issued by governments that are members of the Organisation for Economic Co-operation and Development (“OECD”) and U.S. government agencies.

(f) At September 30, 2012, and December 31, 2011, the amount of commitments related to forward-starting reverse repurchase agreements and securities borrowing agreements were $8.8 billion and $14.4 billion, respectively. Commitments related to unsettled reverse repurchase agreements and securities borrowing agreements with regular-way settlement periods were $32.7 billion and $25.5 billion, at September 30, 2012, and December 31, 2011, respectively.

(g) The Firm’s mortgage repurchase liability is intended to cover losses associated with all loans previously sold in connection with loan sale and securitization transactions with the GSEs, regardless of when those losses occur or how they are ultimately resolved (e.g., repurchase, make-whole payment). For additional information, see Loan sale and securitization-related indemnifications on pages 195–196 of this Note.

(h) At September 30, 2012, and December 31, 2011, included unfunded commitments of $398 million and $789 million, respectively, to third-party private equity funds; and $1.6 billion and $1.5 billion, respectively, to other equity investments. These commitments included $359 million and $820 million, respectively, related to investments that are generally fair valued at net asset value as discussed in Note 3 on pages 119–133 of this Form 10-Q. In addition, at September 30, 2012, and December 31, 2011, included letters of credit hedged by derivative transactions and managed on a market risk basis of $4.5 billion and $3.9 billion, respectively.

(i) For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value.

Standby letters of credit and other financial guarantees and other letters of credit

The following table summarizes the types of facilities under which standby letters of credit and other letters of credit arrangements are outstanding by the ratings profiles of the Firm’s customers, as of September 30, 2012, and December 31, 2011.

Standby letters of credit, other financial guarantees and other letters of credit

	September 30, 2012						December 31, 2011
(in millions)	Standby letters of credit and other financial guarantees				Other letters of credit		Standby letters of credit and other financial guarantees				Other letters of credit
Investment-grade(a)		$	76,283		$	3,559		$	78,884		$	4,105
Noninvestment-grade(a)		24,622			1,335			23,015			1,281
Total contractual amount(b)		$	100,905	(c)	$	4,894		$	101,899	(c)	$	5,386
Allowance for lending-related commitments		$	306		$	1		$	317		$	2
Commitments with collateral		43,315			795			41,529			1,264

(a) The ratings scale is based on the Firm’s internal ratings which generally correspond to ratings as defined by S&P and Moody’s.

(b) At September 30, 2012, and December 31, 2011, reflects the contractual amount net of risk participations totaling $18.2 billion and $19.8 billion, respectively, for standby letters of credit and other financial guarantees; and $913 million and $974 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.

(c) At September 30, 2012, and December 31, 2011, included unissued standby letters of credit commitments of $44.4 billion and $44.1 billion, respectively.

Summary of changes in mortgage repurchase liability

The following table summarizes the change in the mortgage repurchase liability for each of the periods presented.

Summary of changes in mortgage repurchase liability^(a)  

	Three months ended September 30,							Nine months ended September 30,
(in millions)	2012				2011			2012			2011
Repurchase liability at beginning of period	$	3,293			$	3,631		$	3,557		$	3,285
Realized losses(b)	(268		)		(329		)	(891		)	(801		)
Provision(c)	74				314			433			1,132
Repurchase liability at end of period	$	3,099		(d)	$	3,616		$	3,099		$	3,616

(a) All mortgage repurchase demands associated with private-label securitizations are separately evaluated by the Firm in establishing its litigation reserves.

(b) Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expense. Make-whole settlements were $94 million and $162 million for the three months ended September 30, 2012 and 2011, respectively and $387 million and $403 million, for the nine months ended September 30, 2012 and 2011, respectively.

(c) Includes $30 million and $12 million of provision related to new loan sales for the three months ended September 30, 2012 and 2011, respectively, and $85 million and $35 million for the nine months ended September 30, 2012 and 2011, respectively.

(d) Includes $3 million at September 30, 2012, related to future repurchase demands on loans sold by Washington Mutual to the GSEs.