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Trading Assets and Liabilities and Derivatives Trading Assets and Liabilities and Derivatives
 9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Trading Assets and Liabilities and Derivatives [Text Block]
NOTE 4 - TRADING ASSETS AND LIABILITIES AND DERIVATIVE INSTRUMENTS

The fair values of the components of trading assets and liabilities and derivative instruments are presented in the following table:
(Dollars in millions)
September 30, 2019
 
December 31, 2018
Trading Assets and Derivative Instruments:
 
 
 
U.S. Treasury securities

$212

 

$262

Federal agency securities
319

 
188

U.S. states and political subdivisions
43

 
54

MBS - agency residential
1,004

 
860

MBS - agency commercial
51

 
—

ABS
7

 
—

Corporate and other debt securities
628

 
700

CP
122

 
190

Equity securities
86

 
73

Derivative instruments 1
1,770

 
639

Trading loans 2
2,862

 
2,540

Total trading assets and derivative instruments

$7,104

 

$5,506

Trading Liabilities and Derivative Instruments:
 
 
 
U.S. Treasury securities

$538

 

$801

MBS - agency
—

 
3

Corporate and other debt securities
539

 
385

Equity securities
20

 
5

Derivative instruments 1
274

 
410

Trading loans
9

 
—

Total trading liabilities and derivative instruments

$1,380

 

$1,604

1 Amounts 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 STRH, a broker/dealer subsidiary of the Company. The Company manages the potential market volatility associated with trading instruments by using 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 16, “Derivative Financial Instruments,” in this Form 10-Q as
well as Note 20, “Fair Value Election and Measurement,” to the Consolidated Financial Statements in the Company's 2018 Annual Report on Form 10-K.

Pledged trading assets are presented in the following table:
(Dollars in millions)
September 30, 2019
 
December 31, 2018
Pledged trading assets to secure repurchase agreements 1

$1,226

 

$1,418

Pledged trading assets to secure certain derivative agreements
62

 
22

Pledged trading assets to secure other arrangements
40

 
40

1 Repurchase agreements secured by collateral totaled $1.2 billion and $1.4 billion at September 30, 2019 and December 31, 2018, respectively.