Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2017

Table Text Block [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 December 31:

		Other Assets Fair Value				Other Liabilities Fair Value
(Millions)		2017		2016		2017		2016
Derivatives designated as hedging instruments:
	Fair value hedges - Interest rate contracts(a)	$	11	$	111	$	34	$	69
	Net investment hedges - Foreign exchange contracts		117		347		89		35
Total derivatives designated as hedging instruments			128		458		123		104
Derivatives not designated as hedging instruments:
	Foreign exchange contracts, including certain embedded derivatives(b)		82		308		95		176
Total derivatives, gross			210		766		218		280
Less: Cash collateral netting(c) (d)			(6)		(54)		(45)		(68)
	Derivative asset and derivative liability netting(e)		(80)		(157)		(80)		(157)
Total derivatives, net		$	124	$	555	$	93	$	55

• Effective January 2017, the Central Clearing Party (CCP) changed the legal characterization of variation margin payments for centrally cleared derivatives to be settlement payments, as opposed to collateral. As of December 31, 2017, there was no unsettled derivative asset or liability with the CCP.The Company also maintained several bilateral interest rate contracts that are not subject to the CCP’s rule change and amounts related to such contracts are shown gross of any collateral exchanged.
• Includes foreign currency derivatives embedded in certain operating agreements.
• Represents the offsetting of the fair value of bilateral interest rate contracts and certain foreign exchange contracts with the right to reclaim cash collateral or the obligation to return cash collateral.
• The Company held no non-cash collateral as of December 31,2017. As of December 31, 2016, the Company received non-cash collateral from a counterpartyin the form of security interests in U.S. Treasury securities,with a fair value of $18 million, none of which was sold or repledged. Such non-cash collateral economically reduced the Company’s risk exposure to $537 million as of December 31, 2016, but did not reduce the net exposure on the Company’s Consolidated Balance Sheets. Additionally, the Company posted $146 million and $169 million as of December 31, 2017 and 2016, respectively, as initial margin on its centrally cleared interest rate swaps; such amounts are recorded within Other receivables on the Consolidated Balance Sheets and 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 following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of December 31:

Effect of fair value hedges on results of operations

The following table summarizes the gains (losses) recognized in Other expenses associated with the Company’s fair value hedges for the year ended December 31:

(Millions)	2017		2016		2015
Other expenses:
Interest rate derivative contracts	$	(246)	$	(184)	$	(83)
Hedged items		206		163		93
Net hedge ineffectiveness (losses) gains	$	(40)	$	(21)	$	10

The following table summarizes the impact on the Consolidated Statements of Income associated with the Company’s fair value hedges ofits fixed-rate long-term debt and its investment in ICBC for the years ended December 31: