Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2012

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, 2012 and December 31, 2011:

		Other Assets				Other Liabilities
		Fair Value				Fair Value
(Millions)		2012		2011		2012		2011
Derivatives designated as hedging instruments:
Interest rate contracts
	Fair value hedges	$	918	$	999	$	―	$	―
	Cash flow hedges		―		―		―		1
Total return contract
	Fair value hedge		42		13		―		―
Foreign exchange contracts
	Net investment hedges		40		344		182		44
Total derivatives designated as hedging instruments		$	1,000	$	1,356	$	182	$	45
Derivatives not designated as hedging instruments:
	Interest rate contracts	$	―	$	1	$	―	$	―
	Foreign exchange contracts, including certain embedded derivatives(a)		70		159		106		60
	Equity-linked embedded derivative(b)		―		―		2		3
Total derivatives not designated as hedging instruments			70		160		108		63
Total derivatives, gross		$	1,070	$	1,516	$	290	$	108
Cash collateral netting(c)			(591)		(587)		―		―
Derivative asset and derivative liability netting(c)			(14)		(14)		(14)		(14)
Total derivatives, net		$	465	$	915	$	276	$	94

(a) Includes foreign currency derivatives embedded in certain operating agreements.

(b) Represents an equity-linked derivative embedded in one of the Company's investment securities.

(c) As permitted under GAAP, balances represent the netting of cash collateral received and posted under credit support agreements, and the netting of derivative assets and derivative liabilities under master netting agreements.

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 ofits fixed-rate long-term debtand its investment in ICBC for the three months ended March 31:

	Gains (losses) recognized in income
(Millions)	Derivative contract					Hedged item					Net hedge
		Amount					Amount				ineffectiveness(a)
Derivative relationship	Income Statement Line Item	2012		2011		Income Statement Line Item	2012		2011		2012		2011
Interest rate contracts	Other, net expenses	$	(83)	$	(158)	Other, net expenses	$	69	$	139	$	(14)	$	(19)
Total return contract	Other non-interest revenues		(32)		―	Other non-interest revenues		32		―		―		―

(a) Net hedge ineffectiveness on the TRC is reclassified from other non-interest revenues to other expenses.

Impact of cash flow hedges and investment hedges on results of operations

The following table summarizes the impact of cash flow hedges and net investment hedges on the Consolidated Statements of Income for thethree months ended March 31:

		Gains (losses) recognized in income
			Amount reclassified
			from AOCI into					Net hedge
			income					ineffectiveness
(Millions)		Income Statement Line Item	2012		2011		Income Statement Line Item	2012		2011
Cash flow hedges:(a)
	Interest rate contracts	Interest expense	$	―	$	(8)	Other, net expenses	$	―	$	―
Net investment hedges:
	Foreign exchange
	contracts	Other, net expenses	$	―	$	―	Other, net expenses	$	―	$	(3)

(a) During the three months endedMarch 31, 2012 and 2011, there were no forecasted transactionsthat were considered no longer probable to occur.

Derivative instruments gain loss recognized in income

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

	Pre-tax gains (losses)
(Millions)		Amount
Description	Income Statement Line Item	2012		2011
Interest rate contracts	Other, net expenses	$	(1)	$	2
Foreign exchange contracts(a)	Interest and dividends on investment securities		―		2
	Interest expense on short-term borrowings		―		1
	Interest expense on long-term debt and other		―		30
	Other, net expenses		(102)		19
Equity-linked contract	Other non-interest revenues		1		1
Total		$	(102)	$	55

(a) For the three months endedMarch 31, 2012 and 2011, foreign exchange contracts include embedded foreign currency derivatives. Gains (losses) on these embedded derivatives are included in other expenses.