The following table provides information about the assets and liabilities not carried at fair value in our Condensed Statement of Financial Position. Consistent with ASC 825, Financial Instruments, the table excludes finance leases and non-financial assets and liabilities. Apart from certain of our borrowings and certain marketable securities, few of the instruments discussed below are actively traded and their fair values must often be determined using financial models. Realization of the fair value of these instruments depends upon market forces beyond our control, including marketplace liquidity. For a description on how we estimate fair value, see Note 15 in our 2010 consolidated financial statements.

		At
		September 30, 2011						December 31, 2010
				Assets (liabilities)						Assets (liabilities)
		Notional		Carrying		Estimated		Notional		Carrying		Estimated
(In millions)		amount		amount (net)		fair value		amount		amount (net)		fair value

Assets
Loans		(a)	$	254,217	$	253,404		(a)	$	268,239	$	264,550
Other commercial mortgages		(a)		129		129		(a)		91		91
Loans held for sale		(a)		262		262		(a)		287		287
Other financial instruments(c)		(a)		2,525		3,023		(a)		2,082		2,490
Liabilities
Borrowings and bank
deposits(b)(d)		(a)		(451,602)		(452,974)		(a)		(465,308)		(477,425)
Guaranteed investment contracts		(a)		(4,624)		(4,637)		(a)		(5,502)		(5,524)
Insurance - credit life(e)	$	1,934		(105)		(88)	$	1,812		(102)		(68)

		Notional amount at
		September 30,		December 31,
(In millions)		2011		2010

Ordinary course of business lending commitments(a)	$	2,872	$	3,584
Unused revolving credit lines(b)
Commercial(c)		17,858		21,338
Consumer - principally credit cards		254,891		227,006

As a matter of policy, we use derivatives for risk management purposes and we do not use derivatives for speculative purposes. A key risk management objective for our financial services businesses is to mitigate interest rate and currency risk by seeking to ensure that the characteristics of the debt match the assets they are funding. If the form (fixed versus floating) and currency denomination of the debt we issue do not match the related assets, we typically execute derivatives to adjust the nature and tenor of funding to meet this objective. The determination of whether we enter into a derivative transaction or issue debt directly to achieve this objective depends on a number of factors, including market related factors that affect the type of debt we can issue.

The notional amounts of derivative contracts represent the basis upon which interest and other payments are calculated and are reported gross, except for offsetting foreign currency forward contracts that are executed in order to manage our currency risk of net investment in foreign subsidiaries. Of the outstanding notional amount of $297,000 million, approximately 98% or $291,000 million, is associated with reducing or eliminating the interest rate, currency or market risk between financial assets and liabilities in our financial services businesses. The remaining derivative activities primarily relate to hedging against adverse changes in currency exchange rates and commodity prices related to anticipated sales and purchases and contracts containing certain clauses which meet the accounting definition of a derivative. The instruments used in these activities are designated as hedges when practicable. When we are not able to apply hedge accounting, or when the derivative and the hedged item are both recorded in earnings concurrently, the derivatives are deemed economic hedges and hedge accounting is not applied. This most frequently occurs when we hedge a recognized foreign currency transaction (e.g., a receivable or payable) with a derivative. Since the effects of changes in exchange rates are reflected currently in earnings for both the derivative and the transaction, the economic hedge does not require hedge accounting.

The following table provides information about the fair value of our derivatives, by contract type, separating those accounted for as hedges and those that are not.

	At
	September 30, 2011				December 31, 2010
	Fair value				Fair value
(In millions)	Assets		Liabilities		Assets		Liabilities

Derivatives accounted for as hedges
Interest rate contracts	$	9,206	$	1,133	$	5,885	$	2,674
Currency exchange contracts		4,387		2,858		2,915		2,402
Other contracts		–		–		0		0
		13,593		3,991		8,800		5,076
Derivatives not accounted for as hedges
Interest rate contracts		329		283		294		551
Currency exchange contracts		1,553		570		1,281		653
Other contracts		82		25		274		50
		1,964		878		1,849		1,254
Netting adjustments(a)		(3,120)		(3,106)		(3,644)		(3,635)

Total	$	12,437	$	1,763	$	7,005	$	2,695

Derivatives are classified in the captions “Other assets” and “Other liabilities” in our financial statements.

We use interest rate and currency exchange derivatives to hedge the fair value effects of interest rate and currency exchange rate changes on local and non-functional currency denominated fixed-rate debt. For relationships designated as fair value hedges, changes in fair value of the derivatives are recorded in earnings within interest along with offsetting adjustments to the carrying amount of the hedged debt. The following tables provide information about the earnings effects of our fair value hedging relationships for the three and nine months ended September 30, 2011 and 2010, respectively.

	Three months ended
	September 30, 2011				September 30, 2010
(In millions)	Gain (loss)		Gain (loss)		Gain (loss)		Gain (loss)
	on hedging		on hedged		on hedging		on hedged
	derivatives		items		derivatives		items

Interest rate contracts	$	5,735	$	(5,863)	$	1,862	$	(2,048)
Currency exchange contracts		64		(74)		57		(60)

Fair value hedges resulted in $(138) million and $(189) million of ineffectiveness in the three months ended September 30, 2011 and 2010, respectively. In both the three months ended September 30, 2011 and 2010, there were insignificant amounts excluded from the assessment of effectiveness.

	Nine months ended
	September 30, 2011				September 30, 2010
(In millions)	Gain (loss)		Gain (loss)		Gain (loss)		Gain (loss)
	on hedging		on hedged		on hedging		on hedged
	derivatives		items		derivatives		items

Interest rate contracts	$	5,297	$	(5,626)	$	5,673	$	(6,178)
Currency exchange contracts		103		(121)		48		(59)

Fair value hedges resulted in $(347) million and $(516) million of ineffectiveness in the nine months ended September 30, 2011 and 2010, respectively. In both the nine months ended September 30, 2011 and 2010, there were insignificant amounts excluded from the assessment of effectiveness.

We use interest rate, currency exchange and commodity derivatives to reduce the variability of expected future cash flows associated with variable rate borrowings and commercial purchase and sale transactions, including commodities. For derivatives that are designated in a cash flow hedging relationship, the effective portion of the change in fair value of the derivative is reported as a component of AOCI and reclassified into earnings contemporaneously and in the same caption with the earnings effects of the hedged transaction.

The following tables provide information about the amounts recorded in AOCI, as well as the gain (loss) recorded in earnings, primarily in interest, when reclassified out of AOCI, for the three and nine months ended September 30, 2011 and 2010.


					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the three months ended				for the three months ended
	September 30,		September 30,		September 30,		September 30,
(In millions)	2011		2010		2011		2010

Cash flow hedges
Interest rate contracts	$	(256)	$	(250)	$	(178)	$	(296)
Currency exchange contracts		(583)		627		(570)		(34)
Commodity contracts		0		0		0		969
Total	$	(839)	$	377	$	(748)	$	639


					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the nine months ended				for the nine months ended
	September 30,		September 30,		September 30,		September 30,
(In millions)	2011		2010		2011		2010

Cash flow hedges
Interest rate contracts	$	(378)	$	(736)	$	(657)	$	(1,070)
Currency exchange contracts		79		(790)		294		(123)
Commodity contracts		0		5		0		(519)
Total	$	(299)	$	(1,521)	$	(363)	$	(1,712)

The total pre-tax amount in AOCI related to cash flow hedges of forecasted transactions was $2,054 million at September 30, 2011. We expect to transfer $643 million to earnings as an expense in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. In both the three and nine months ended September 30, 2011 and 2010, we recognized insignificant gains and losses, respectively, related to hedged forecasted transactions and firm commitments that did not occur by the end of the originally specified period. At September 30, 2011 and 2010, the maximum term of derivative instruments that hedge forecasted transactions was 1 year and 2 years, respectively.

For cash flow hedges, the amount of ineffectiveness in the hedging relationship and amount of the changes in fair value of the derivatives that are not included in the measurement of ineffectiveness are both reflected in earnings each reporting period. These amounts are primarily reported in revenues from services and totaled $56 million and $12 million in the three months ended September 30, 2011 and 2010, respectively, and $68 million and $(15) million in the nine months ended September 30, 2011 and 2010, respectively.

We use currency exchange derivatives to protect our net investments in global operations conducted in non-U.S. dollar currencies. For derivatives that are designated as hedges of net investment in a foreign operation, we assess effectiveness based on changes in spot currency exchange rates. Changes in spot rates on the derivative are recorded as a component of AOCI until such time as the foreign entity is substantially liquidated or sold. The change in fair value of the forward points, which reflects the interest rate differential between the two countries on the derivative, is excluded from the effectiveness assessment.

The following tables provide information about the amounts recorded in AOCI for the three and nine months ended September 30, 2011 and 2010, as well as the gain (loss) recorded in revenues from services when reclassified out of AOCI.

	Gain (loss) recognized				Gain (loss) reclassified
	in CTA for the				from CTA for the
	three months ended September 30,				three months ended September 30,
(In millions)	2011		2010		2011		2010

Net investment hedges
Currency exchange contracts	$	1,924	$	(3,184)	$	(15)	$	18

	Gain (loss) recognized				Gain (loss) reclassified
	in CTA for the				from CTA for the
	nine months ended September 30,				nine months ended September 30,
(In millions)	2011		2010		2011		2010

Net investment hedges
Currency exchange contracts	$	(1,448)	$	(939)	$	(713)	$	(12)

The amounts related to the change in the fair value of the forward points that are excluded from the measure of effectiveness were $(384) million and $(204) million for the three months ended September 30, 2011 and 2010, respectively, and $(1,041) million and $(616) million for the nine months ended September 30, 2011 and 2010, respectively, and are recorded in interest.

Changes in the fair value of derivatives that are not designated as hedges are recorded in earnings each period. As discussed above, these derivatives are typically entered into as economic hedges of changes in interest rates, currency exchange rates, commodity prices and other risks. Gains or losses related to the derivative are typically recorded in revenues from services, based on our accounting policy. In general, the earnings effects of the item that represent the economic risk exposure are recorded in the same caption as the derivative. Gains for the nine months ended September 30, 2011 on derivatives not designated as hedges were $86 million comprised of amounts related to interest rate contracts of $52 million, currency exchange contracts of $9 million, and other derivatives of $25 million. These gains more than offset the earnings effects from the underlying items that were economically hedged. Losses for the nine months ended September 30, 2010 on derivatives not designated as hedges, without considering the offsetting earnings effects from the item representing the economic risk exposure, were $(661) million comprised of amounts related to interest rate contracts of $190 million, currency exchange contracts of $(832) million, and other derivatives of $(19) million.

Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. Accordingly, we actively monitor these exposures and take appropriate actions in response. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our standard master agreements) on an individual counterparty basis. Where we have agreed to netting of derivative exposures with a counterparty, we offset our exposures with that counterparty and apply the value of collateral posted to us to determine the exposure. When net exposure to a counterparty, based on the current market values of agreements and collateral, exceeds credit exposure limits, we typically take action to reduce such exposures. These actions may include prohibiting additional transactions with the counterparty, requiring additional collateral from the counterparty (as described below) and terminating or restructuring transactions.

As discussed above, we have provisions in certain of our master agreements that require counterparties to post collateral (typically, cash or U.S. Treasuries) when our receivable due from the counterparty, measured at current market value, exceeds a specified limit. At September 30, 2011, our exposure to counterparties, including interest due, net of collateral we hold, was $1,005 million. The fair value of such collateral was $16,032 million, of which $3,504 million was cash and $12,528 million was in the form of securities held by a custodian for our benefit. Under certain of these same agreements, we post collateral to our counterparties for our derivative obligations, the fair value of which was $1,184 million at September 30, 2011.

Additionally, our standard master agreements typically contain mutual downgrade provisions that provide the ability of each party to require termination if the long-term credit rating of the counterparty were to fall below A-/A3. In certain of these master agreements, each party also has the ability to require termination if the short-term rating of the counterparty were to fall below A-1/P-1. The net amount relating to our derivative liability of $1,763 million subject to these provisions, after consideration of collateral posted by us and outstanding interest payments, was $775 million at September 30, 2011.