NOTE 3 - TRADING ASSETS AND LIABILITIES AND DERIVATIVE INSTRUMENTS

The fair values of the components of trading assets and liabilities and derivative instruments were as follows:



(Dollars in millions)	March 31, 2016		December 31, 2015
Trading Assets and Derivative Instruments:
U.S. Treasury securities		$707		$538
Federal agency securities	304		588
U.S. states and political subdivisions	83		30
MBS - agency	686		553
CLO securities	3		2
Corporate and other debt securities	454		468
CP	400		67
Equity securities	53		66
Derivative instruments ¹	1,735		1,152
Trading loans ²	2,625		2,655
Total trading assets and derivative instruments		$7,050		$6,119

Trading Liabilities and Derivative Instruments:
U.S. Treasury securities		$568		$503
MBS - agency	3		37
Corporate and other debt securities	311		259
Derivative instruments ¹	654		464
Total trading liabilities and derivative instruments		$1,536		$1,263

¹Amounts include the impact of offsetting cash collateral received from and paid to the same derivative counterparties, and the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement or similar agreement exists.

² Includes loans related to TRS.

Various trading and derivative instruments are used as part of the Company’s overall balance sheet management strategies and to support client requirements executed through the Bank and/or the Company's broker/dealer subsidiary. The Company manages the potential market volatility associated with trading instruments with appropriate risk management strategies. The size, volume, and nature of the trading products and derivative instruments can vary based on economic conditions as well as client-specific and Company-specific asset or liability positions. Product offerings to clients include debt securities, loans traded in the secondary market, equity securities, derivative contracts, and other similar financial instruments. Other trading-related activities include acting as a market maker for certain debt and equity security transactions, derivative instrument transactions, and foreign exchange transactions. The Company also uses derivatives to manage its interest rate and market risk from non-trading activities. The Company has policies and procedures to manage market risk associated with client trading and non-trading activities, and assumes a limited degree of market risk by managing the size and nature of its exposure. For valuation assumptions and additional information related to the Company's trading products and derivative instruments, see Note 13, “Derivative Financial Instruments,” and the “Trading Assets and Derivative Instruments and Securities Available for Sale” section of Note 14, “Fair Value Election and Measurement.”

The Company pledged $1.0 billion and $986 million of trading securities to secure $1.0 billion and $950 million of repurchase agreements at March 31, 2016 and December 31, 2015, respectively. Additionally, the Company pledged $446 million and $393 million of trading securities to secure certain derivative agreements at March 31, 2016 and December 31, 2015, respectively, and pledged $40 million of trading securities under other arrangements at both March 31, 2016 and December 31, 2015.