NOTE 3 - FEDERAL FUNDS SOLD AND SECURITIES BORROWED OR PURCHASED UNDER AGREEMENTS TO RESELL

Fed funds sold and securities borrowed or purchased under agreements to resell were as follows at December 31:



(Dollars in millions)	2013		2012
Fed funds sold		$75		$29
Securities borrowed	184		155
Resell agreements	724		917
Total fed funds sold and securities borrowed or purchased under agreements to resell		$983		$1,101

Securities purchased under agreements to resell are primarily collateralized by U.S. government or agency securities and are carried at the amounts at which securities will be subsequently resold. Securities borrowed are primarily collateralized by corporate securities. The Company takes possession of all securities purchased under agreements to resell and securities borrowed and performs the appropriate margin evaluation on the acquisition date based on market volatility, as necessary. It is the Company's policy to obtain possession of collateral with a fair value between 95% to 110% of the principal amount loaned under resale and securities borrowing agreements. The total market value of the collateral held was $913 million and $1.1 billion at December 31, 2013 and 2012, respectively, of which $234 million and $246 million was repledged, respectively.

Netting of Securities - Repurchase and Resell Agreements

The Company has various financial assets and financial liabilities that are subject to enforceable master netting agreements or similar agreements. The Company's derivatives that are subject to enforceable master netting agreements or similar agreements are discussed in Note 16, "Derivative Financial Instruments." Securities purchased under agreements to resell and securities sold under agreements to repurchase are governed by a MRA. Under the terms of the MRA, all transactions between the Company and the counterparty constitute a single business relationship such that in the event of default, the nondefaulting party is entitled to set off claims and apply property held by that party in respect of any transaction against obligations owed. Any payments, deliveries, or other transfers may be applied against each other and netted. These amounts are limited to the contract asset/liability balance, and accordingly, do not include excess collateral received/pledged.

The following table presents the Company's eligible securities borrowed or purchased under agreements to resell and securities sold under agreements to repurchase at December 31, 2013 and 2012:



(Dollars in millions)	Gross Amount	Amount Offset	Net Amount Presented in Consolidated Balance Sheets		Held/Pledged Financial Instruments	Net Amount
December 31, 2013
Financial assets:
Securities borrowed or purchased under agreements to resell	$908	$—	$908	^{1, 2}	$899		$9
Financial liabilities:
Securities sold under agreements to repurchase	1,759	—	1,759	¹	1,759	—

December 31, 2012
Financial assets:
Securities borrowed or purchased under agreements to resell	$1,072	$—	$1,072	^1,2	$1,069		$3
Financial liabilities:
Securities sold under agreements to repurchase	1,574	—	1,574	¹	1,574	—

¹None of the Company's repurchase and reverse repurchase transactions met the right of setoff criteria for net balance sheet presentation at December 31, 2013 and 2012.

²Excludes $75 million and $29 million of Fed funds sold which are not subject to a master netting agreement at December 31, 2013 and 2012, respectively.