Fair Value Option (Tables)

12 Months Ended

Dec. 31, 2022

The following tables provide information about the fair value carrying amount and the contractual principal outstanding of assets and liabilities accounted for under the fair value option at December 31, 2022 and 2021, and information about where changes in the fair value of assets and liabilities accounted for under the fair value option are included in the Consolidated Statement of Income for 2022, 2021 and 2020.



Fair Value Option Elections

	December 31, 2022						December 31, 2021
(Dollars in millions)	Fair Value Carrying Amount		Contractual Principal Outstanding		Fair Value Carrying Amount Less Unpaid Principal		Fair Value Carrying Amount		Contractual Principal Outstanding		Fair Value Carrying Amount Less Unpaid Principal
Federal funds sold and securities borrowed or purchased under agreements to resell	$	146,999	$	147,158	$	(159)	$	150,665	$	150,677	$	(12)
Loans reported as trading account assets (1)	10,143		17,682		(7,539)		10,864		18,895		(8,031)
Trading inventory – other	20,770		n/a		n/a		21,986		n/a		n/a
Consumer and commercial loans	5,771		5,897		(126)		7,819		7,888		(69)
Loans held-for-sale (1)	1,115		1,873		(758)		4,455		5,343		(888)

Other assets	620		n/a		n/a		544		n/a		n/a
Long-term deposits	311		381		(70)		408		401		7
Federal funds purchased and securities loaned or sold under agreements to repurchase	151,708		151,885		(177)		139,641		139,682		(41)
Short-term borrowings	832		833		(1)		4,279		4,127		152
Unfunded loan commitments	110		n/a		n/a		97		n/a		n/a
Accrued expenses and other liabilities	1,217		1,161		56		—		—		—
Long-term debt	33,070		36,830		(3,760)		29,708		30,903		(1,195)

(1)A significant portion of the loans reported as trading account assets and LHFS are distressed loans that were purchased at a deep discount to par, and the remainder are loans with a fair value near contractual principal outstanding.

n/a = not applicable



Gains (Losses) Related to Assets and Liabilities Accounted for Under the Fair Value Option



	Market making and similar activities		Other Income		Total
(Dollars in millions)	2022

Loans reported as trading account assets	$	(164)	$	—	$	(164)
Trading inventory – other (1)	(1,159)		—		(1,159)
Consumer and commercial loans	(58)		(27)		(85)
Loans held-for-sale (2)	—		(304)		(304)




Short-term borrowings	639		—		639
Unfunded loan commitments	—		8		8
Accrued expenses and other liabilities	11		—		11
Long-term debt (3)	4,359		(46)		4,313
Other (4)	74		30		104
Total	$	3,702	$	(339)	$	3,363



































	2021

Loans reported as trading account assets	$	275	$	—	$	275
Trading inventory – other (1)	(211)		—		(211)
Consumer and commercial loans	78		40		118
Loans held-for-sale (2)	—		58		58




Short-term borrowings	883		—		883


Long-term debt (3)	(604)		(41)		(645)
Other (4)	18		(23)		(5)
Total	$	439	$	34	$	473

	2020

Loans reported as trading account assets	$	107	$	—	$	107
Trading inventory – other (1)	3,216		—		3,216
Consumer and commercial loans	22		(3)		19
Loans held-for-sale (2)	—		103		103




Short-term borrowings	(170)		—		(170)
Unfunded loan commitments	—		(65)		(65)

Long-term debt (3)	(2,175)		(53)		(2,228)
Other (4)	35		(22)		13
Total	$	1,035	$	(40)	$	995

(1) The gains (losses) in market making and similar activities are primarily offset by (losses) gains on trading liabilities that hedge these assets.

(2) Includes the value of IRLCs on funded loans, including those sold during the period.

(3) The net gains (losses) in market making and similar activities relate to the embedded derivatives in structured liabilities and are typically offset by (losses) gains on derivatives and securities that hedge these liabilities. For the cumulative impact of changes in the Corporation’s own credit spreads and the amount recognized in accumulated OCI, see Note 14 – Accumulated Other Comprehensive Income (Loss). For more information on how the Corporation’s own credit spread is determined, see Note 20 – Fair Value Measurements.

(4) Includes gains (losses) on federal funds sold and securities borrowed or purchased under agreements to resell, other assets, long-term deposits and federal funds purchased and securities loaned or sold under agreements to repurchase.



Gains (Losses) Related to Borrower-specific Credit Risk for Assets and Liabilities Accounted for Under the Fair Value Option


(Dollars in millions)	2022		2021		2020
Loans reported as trading account assets	$	(950)	$	128	$	(172)
Consumer and commercial loans	(51)		7		(19)
Loans held-for-sale	(23)		28		(105)
Unfunded loan commitments	8		(1)		(65)