10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File Number 1-11758

(Exact Name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 1585 Broadway New York, NY 10036 (Address of principal executive offices, including zip code) 36-3145972 (I.R.S. Employer Identification No.) (212) 761-4000 (Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer  x	Accelerated Filer  ¨
Non-Accelerated Filer  ¨	Smaller reporting company  ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 29, 2016, there were 1,911,808,935 shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding.

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended June 30, 2016

Table of Contents		Page
Part I—Financial Information
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Statements of Income	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Balance Sheets	3
	Consolidated Statements of Changes in Total Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements (Unaudited)	6
	1. Introduction and Basis of Presentation	6
	2. Significant Accounting Policies	7
	3. Fair Values	8
	4. Derivative Instruments and Hedging Activities	27
	5. Investment Securities	34
	6. Collateralized Transactions	40
	7. Loans and Allowance for Credit Losses	43
	8. Equity Method Investments	47
	9. Deposits	47
	10. Long-Term Borrowings and Other Secured Financings	47
	11. Commitments, Guarantees and Contingencies	48
	12. Variable Interest Entities and Securitization Activities	53
	13. Regulatory Requirements	59
	14. Total Equity	61
	15. Earnings per Common Share	64
	16. Interest Income and Interest Expense	65
	17. Employee Benefit Plans	65
	18. Income Taxes	66
	19. Segment and Geographic Information	67
	20. Subsequent Events	70
	Report of Independent Registered Public Accounting Firm	71
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	72
	Introduction	72
	Executive Summary	73
	Business Segments	78
	Supplemental Financial Information and Disclosures	90
	Accounting Development Updates	91
	Critical Accounting Policies	91
	Liquidity and Capital Resources	92
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	108
Item 4.	Controls and Procedures	121
Financial Data Supplement (Unaudited)		122
Part II—Other Information
Item 1.	Legal Proceedings	128
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	129
Item 6.	Exhibits	129

i

Available Information.

We file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the “SEC”). You may read and copy any document we file with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for information on the public reference room. The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and information statements and other information that issuers (including us) file electronically with the SEC. Our electronic SEC filings are available to the public at the SEC’s internet site, www.sec.gov.

Our internet site is www.morganstanley.com. You can access our Investor Relations webpage at www.morganstanley.com/about-us-ir. We make available free of charge, on or through our Investor Relations webpage, our proxy statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available, through our Investor Relations webpage, via a link to the SEC’s internet site, statements of beneficial ownership of our equity securities filed by our directors, officers, 10% or greater shareholders and others under Section 16 of the Exchange Act.

You can access information about our corporate governance at www.morganstanley.com/about-us-governance. Our Corporate Governance webpage includes:

• Amended and Restated Certificate of Incorporation;

• Amended and Restated Bylaws;

• Charters for its Audit Committee, Compensation, Management Development and Succession Committee, Nominating and Governance Committee, Operations and Technology Committee, and Risk Committee;

• Corporate Governance Policies;

• Policy Regarding Communication with the Board of Directors;

• Policy Regarding Director Candidates Recommended by Shareholders;

• Policy Regarding Corporate Political Activities;

• Policy Regarding Shareholder Rights Plan;

• Equity Ownership Commitment;

• Code of Ethics and Business Conduct;

• Code of Conduct; and

• Integrity Hotline Information.

Morgan Stanley’s Code of Ethics and Business Conduct applies to all directors, officers and employees, including our Chief Executive Officer, Chief Financial Officer and Deputy Chief Financial Officer. We will post any amendments to the Code of Ethics and Business Conduct and any waivers that are required to be disclosed by the rules of either the SEC or the New York Stock Exchange LLC (“NYSE”) on our internet site. You can request a copy of these documents, excluding exhibits, at no cost, by contacting Investor Relations, 1585 Broadway, New York, NY 10036 (212-761-4000). The information on our internet site is not incorporated by reference into this report.

ii

Part I—Financial Information

Item 1.            Financial Statements

MORGAN STANLEY

Consolidated Statements of Income

(in millions, except per share data)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Revenues:
Investment banking	$	1,224	$	1,614	$	2,331	$	2,971
Trading		2,746		2,973		4,811		6,623
Investments		126		261		92		527
Commissions and fees		1,020		1,158		2,075		2,344
Asset management, distribution and administration fees		2,637		2,742		5,257		5,423
Other		243		297		323		468
Total non-interest revenues		7,996		9,045		14,889		18,356
Interest income		1,667		1,386		3,414		2,870
Interest expense		754		688		1,602		1,576
Net interest		913		698		1,812		1,294
Net revenues		8,909		9,743		16,701		19,650
Non-interest expenses:
Compensation and benefits		4,015		4,405		7,698		8,929
Occupancy and equipment		329		351		658		693
Brokerage, clearing and exchange fees		484		487		949		950
Information processing and communications		429		438		871		853
Marketing and business development		154		179		288		329
Professional services		547		598		1,061		1,084
Other		468		558		955		1,230
Total non-interest expenses		6,426		7,016		12,480		14,068
Income from continuing operations before income taxes		2,483		2,727		4,221		5,582
Provision for income taxes		833		894		1,411		1,281
Income from continuing operations		1,650		1,833		2,810		4,301
Income (loss) from discontinued operations, net of income taxes		(4)		(2)		(7)		(7)
Net income	$	1,646	$	1,831	$	2,803	$	4,294
Net income applicable to noncontrolling interests		64		24		87		93
Net income applicable to Morgan Stanley	$	1,582	$	1,807	$	2,716	$	4,201
Preferred stock dividends and other		157		142		235		222
Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
Earnings per basic common share:
Income from continuing operations	$	0.77	$	0.87	$	1.33	$	2.07
Income (loss) from discontinued operations		(0.01)		—		(0.01)		—
Earnings per basic common share	$	0.76	$	0.87	$	1.32	$	2.07
Earnings per diluted common share:
Income from continuing operations	$	0.75	$	0.85	$	1.30	$	2.03
Income (loss) from discontinued operations		—		—		—		—
Earnings per diluted common share	$	0.75	$	0.85	$	1.30	$	2.03
Dividends declared per common share	$	0.15	$	0.15	$	0.30	$	0.25
Average common shares outstanding:
Basic		1,866		1,919		1,875		1,922
Diluted		1,899		1,960		1,907		1,962

See Notes to Consolidated Financial Statements.

1

MORGAN STANLEY

Consolidated Statements of Comprehensive Income

(dollars in millions)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Net income	$	1,646	$	1,831	$	2,803	$	4,294
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments(1)	$	131	$	34	$	317	$	(188)
Change in net unrealized gains (losses) on available for sale securities(2)		143		(228)		538		(28)
Pension, postretirement and other		(5)		(3)		(4)		(1)
Change in net debt valuation adjustments(3)		145		—		348		—
Total other comprehensive income (loss)	$	414	$	(197)	$	1,199	$	(217)
Comprehensive income	$	2,060	$	1,634	$	4,002	$	4,077
Net income applicable to noncontrolling interests		64		24		87		93
Other comprehensive income (loss) applicable to noncontrolling interests		81		(16)		136		(18)
Comprehensive income applicable to Morgan Stanley	$	1,915	$	1,626	$	3,779	$	4,002

(1) Amounts include Provision for (benefit from) income taxes of $(59) million and $(54) million in the quarter ended June 30, 2016 (“current quarter”) and the quarter ended June 30, 2015 (“prior year quarter”), respectively, and $(174) million and $120 million in the six months ended June 30, 2016 (“current year period”) and the six months ended June 30, 2015 (“prior year period”), respectively.

(2) Amounts include Provision for (benefit from) income taxes of $84 million and $(137) million in the current quarter and prior year quarter, respectively, and $314 million and $(16) million in the current year period and prior year period, respectively.

(3) Debt valuation adjustments (“DVA”) represent the change in the fair value resulting from fluctuations in the Firm’s credit spreads and other credit factors related to liabilities carried at fair value, primarily certain Long-term and Short-term borrowings. Amounts include Provision for (benefit from) income taxes of $80 million and $200 million in the current quarter and current year period, respectively. See Notes 2 and 14 for further information.

See Notes to Consolidated Financial Statements.

2

MORGAN STANLEY

Consolidated Balance Sheets

(dollars in millions, except share data)

(unaudited)

	At June 30, 2016		At December 31, 2015
Assets
Cash and due from banks	$	27,597	$	19,827
Interest bearing deposits with banks		28,536		34,256
Trading assets, at fair value ($141,543 and $127,627 were pledged to various parties)		256,794		239,505
Investment securities (includes $67,726 and $66,759 at fair value)		80,144		71,983
Securities purchased under agreements to resell (includes $555 and $806 at fair value)		97,589		87,657
Securities borrowed		131,281		142,416
Customer and other receivables		52,827		45,407
Loans:
Held for investment (net of allowances of $323 and $225)		77,283		72,559
Held for sale		15,882		13,200
Goodwill		6,581		6,584
Intangible assets (net of accumulated amortization of $2,279 and $2,130) (includes $3 and $5 at fair value)		2,833		2,984
Other assets		51,526		51,087
Total assets	$	828,873	$	787,465
Liabilities
Deposits (includes $95 and $125 at fair value)	$	152,693	$	156,034
Short-term borrowings (includes $511 and $1,648 at fair value)		880		2,173
Trading liabilities, at fair value		140,662		128,455
Securities sold under agreements to repurchase (includes $699 and $683 at fair value)		50,328		36,692
Securities loaned		17,241		19,358
Other secured financings (includes $2,921 and $2,854 at fair value)		9,901		9,464
Customer and other payables		201,189		186,626
Other liabilities and accrued expenses		14,112		18,711
Long-term borrowings (includes $37,804 and $33,045 at fair value)		163,492		153,768
Total liabilities		750,498		711,281
Commitments and contingent liabilities (see Note 11)
Equity
Morgan Stanley shareholders’ equity:
Preferred stock (see Note 14)		7,520		7,520
Common stock, $0.01 par value:
Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,917,509,492 and 1,920,024,027		20		20
Additional paid-in capital		22,697		24,153
Retained earnings		51,410		49,204
Employee stock trusts		2,873		2,409
Accumulated other comprehensive income (loss)		(905)		(1,656)
Common stock held in treasury, at cost, $0.01 par value (121,384,487 and 118,869,952 shares)		(3,626)		(4,059)
Common stock issued to employee stock trusts		(2,873)		(2,409)
Total Morgan Stanley shareholders’ equity		77,116		75,182
Noncontrolling interests		1,259		1,002
Total equity		78,375		76,184
Total liabilities and equity	$	828,873	$	787,465

See Notes to Consolidated Financial Statements.

3

MORGAN STANLEY

Consolidated Statements of Changes in Total Equity

Six Months Ended June 30, 2016 and 2015

(dollars in millions)

(unaudited)

	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Employee Stock Trusts		Accumulated Other Comprehensive Income (Loss)		Common Stock Held in Treasury at Cost		Common Stock Issued to Employee Stock Trusts		Non- controlling Interests		Total Equity
BALANCE AT DECEMBER 31, 2015	$	7,520	$	20	$	24,153	$	49,204	$	2,409	$	(1,656)	$	(4,059)	$	(2,409)	$	1,002	$	76,184
Cumulative adjustment for accounting change related to DVA(1)		—		—		—		312		—		(312)		—		—		—		—
Net adjustment for accounting change related to consolidation(2)		—		—		—		—		—		—		—		—		106		106
Net income applicable to Morgan Stanley		—		—		—		2,716		—		—		—		—		—		2,716
Net income applicable to noncontrolling interests		—		—		—		—		—		—		—		—		87		87
Dividends		—		—		—		(822)		—		—		—		—		—		(822)
Shares issued under employee plans and related tax effects		—		—		(1,456)		—		464		—		2,062		(464)		—		606
Repurchases of common stock and employee tax withholdings		—		—		—		—		—		—		(1,629)		—		—		(1,629)
Net change in Accumulated other comprehensive income (loss)		—		—		—		—		—		1,063		—		—		136		1,199
Other net decreases		—		—		—		—		—		—		—		—		(72)		(72)
BALANCE AT JUNE 30, 2016	$	7,520	$	20	$	22,697	$	51,410	$	2,873	$	(905)	$	(3,626)	$	(2,873)	$	1,259	$	78,375
BALANCE AT DECEMBER 31, 2014	$	6,020	$	20	$	24,249	$	44,625	$	2,127	$	(1,248)	$	(2,766)	$	(2,127)	$	1,204	$	72,104
Net income applicable to Morgan Stanley		—		—		—		4,201		—		—		—		—		—		4,201
Net income applicable to noncontrolling interests		—		—		—		—		—		—		—		—		93		93
Dividends		—		—		—		(720)		—		—		—		—		—		(720)
Shares issued under employee plans and related tax effects		—		—		(577)		—		314		—		1,423		(314)		—		846
Repurchases of common stock and employee tax withholdings		—		—		—		—		—		—		(1,473)		—		—		(1,473)
Net change in Accumulated other comprehensive income (loss)		—		—		—		—		—		(199)		—		—		(18)		(217)
Issuance of preferred stock		1,500		—		(7)		—		—		—		—		—		—		1,493
Deconsolidation of certain legal entities associated with a real estate fund		—		—		—		—		—		—		—		—		(191)		(191)
Other net decreases		—		—		(10)		—		—		—		—		—		(59)		(69)
BALANCE AT JUNE 30, 2015	$	7,520	$	20	$	23,655	$	48,106	$	2,441	$	(1,447)	$	(2,816)	$	(2,441)	$	1,029	$	76,067

(1) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, a cumulative catch up adjustment was recorded as of January 1, 2016 to move the cumulative DVA amount, net of noncontrolling interest and tax, related to outstanding liabilities under the fair value option election from Retained earnings into Accumulated other comprehensive income (loss) (“AOCI”). See Notes 2 and 14 for further information.

(2) In accordance with the accounting update Amendments to the Consolidation Analysis, a net adjustment was recorded as of January 1, 2016 to consolidate or deconsolidate certain entities under the new guidance. See Note 2 for further information.

See Notes to Consolidated Financial Statements.

4

MORGAN STANLEY

Consolidated Statements of Cash Flows

(dollars in millions)

(unaudited)

	Six Months Ended June 30,
	2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,803	$	4,294
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Income from equity method investments		(1)		(83)
Compensation payable in common stock and options		492		611
Depreciation and amortization		879		654
Net gain on sale of available for sale securities		(82)		(55)
Impairment charges		67		83
Provision for credit losses on lending activities		131		38
Other operating adjustments		218		37
Changes in assets and liabilities:
Trading assets, net of Trading liabilities		(333)		25,115
Securities borrowed		11,135		(7,261)
Securities loaned		(2,117)		(2,068)
Customer and other receivables and other assets		(10,537)		(601)
Customer and other payables and other liabilities		9,907		(1,482)
Securities purchased under agreements to resell		(9,932)		(23,472)
Securities sold under agreements to repurchase		13,636		(4,263)
Net cash provided by (used for) operating activities		16,266		(8,453)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from (payments for):
Other assets—Premises, equipment and software, net		(645)		(620)
Changes in loans, net		(4,724)		(9,082)
Investment securities:
Purchases		(30,700)		(26,832)
Proceeds from sales		20,274		26,501
Proceeds from paydowns and maturities		3,507		2,796
Other investing activities		(126)		(97)
Net cash used for investing activities		(12,414)		(7,334)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (payments for):
Short-term borrowings		(1,293)		861
Noncontrolling interests		(43)		(60)
Other secured financings		(69)		(280)
Deposits		(3,341)		5,659
Proceeds from:
Excess tax benefits associated with stock-based awards		42		176
Derivatives financing activities		—		312
Issuance of preferred stock, net of issuance costs		—		1,493
Issuance of long-term borrowings		20,628		22,909
Payments for:
Long-term borrowings		(15,900)		(12,963)
Derivatives financing activities		(120)		(257)
Repurchases of common stock and employee tax withholdings		(1,629)		(1,473)
Cash dividends		(791)		(673)
Net cash provided by (used for) financing activities		(2,516)		15,704
Effect of exchange rate changes on cash and cash equivalents		714		(542)
Net increase (decrease) in cash and cash equivalents		2,050		(625)
Cash and cash equivalents, at beginning of period		54,083		46,984
Cash and cash equivalents, at end of period	$	56,133	$	46,359
Cash and cash equivalents include:
Cash and due from banks	$	27,597	$	19,145
Interest bearing deposits with banks		28,536		27,214
Cash and cash equivalents, at end of period	$	56,133	$	46,359

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash payments for interest were $1,082 million and $1,027 million.

Cash payments for income taxes, net of refunds, were $340 million and $342 million.

See Notes to Consolidated Financial Statements.

5

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.            Introduction and Basis of Presentation

The Firm

Morgan Stanley, a financial holding company, is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley (the “Parent”) together with its consolidated subsidiaries.

For a description of the clients and principal products and services of each of the Firm’s business segments, see Note 1 to the consolidated financial statements in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”).

Basis of Financial Information

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require the Firm to make estimates and assumptions regarding the valuations of certain financial instruments, the valuation of goodwill and intangible assets, compensation, deferred tax assets, the outcome of legal and tax matters, allowance for credit losses and other matters that affect its consolidated financial statements and related disclosures. The Firm believes that the estimates utilized in the preparation of its consolidated financial statements are prudent and reasonable. Actual results could differ materially from these estimates. Intercompany balances and transactions have been eliminated.

The accompanying consolidated financial statements should be read in conjunction with the Firm’s consolidated financial statements and notes thereto included in the 2015 Form 10-K. Certain footnote disclosures included in the 2015 Form 10-K have been condensed or omitted from the consolidated financial statements as they are not required for interim reporting under U.S. GAAP. The consolidated financial statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the

interim period. The results of operations for interim periods are not necessarily indicative of results for the entire year.

Consolidation

The consolidated financial statements include the accounts of the Firm, its wholly owned subsidiaries and other entities in which the Firm has a controlling financial interest, including certain variable interest entities (“VIE”) (see Note 12). For consolidated subsidiaries that are less than wholly owned, the third-party holdings of equity interests are referred to as noncontrolling interests. The net income attributable to noncontrolling interests for such subsidiaries is presented as Net income (loss) applicable to noncontrolling interests in the consolidated statements of income. The portion of shareholders’ equity of such subsidiaries that is attributable to noncontrolling interests for such subsidiaries is presented as noncontrolling interests, a component of total equity, in the consolidated balance sheets.

For a discussion of the Firm’s VIEs and its significant regulated U.S. and international subsidiaries, see Notes 1 and 2 to the consolidated financial statements in the 2015 Form 10-K. See also Note 2 herein.

Consolidated Statements of Cash Flows Presentation

The adoption of the accounting update, Amendments to the Consolidation Analysis (see Note 2) on January 1, 2016, resulted in a net noncash increase in total assets of $126 million. In the prior year quarter, the Firm deconsolidated approximately $191 million in net assets previously attributable to nonredeemable noncontrolling interests that were related to a real estate fund sponsored by the Firm. The deconsolidation resulted in a non-cash reduction of assets of $169 million.

Global Oil Merchanting Business

As a result of entering into a definitive agreement to sell the global oil merchanting unit of the commodities division to Castleton Commodities International LLC, on May 11, 2015, the Firm recognized an impairment charge of $59 million in Other revenues during the prior quarter and prior year period, to reduce the carrying amount of the unit to its estimated fair value less costs to sell. The Firm closed the

transaction on November 1, 2015. The transaction did not meet the criteria for discontinued operations and did not have a material impact on the Firm’s financial results.

6

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

2.        Significant Accounting Policies

For a detailed discussion about the Firm’s significant accounting policies, see Note 2 to the consolidated financial statements in the 2015 Form 10-K.

During the current year period, other than the following, there were no significant updates made to the Firm’s significant accounting policies.

Accounting Standards Adopted

The Firm adopted the following accounting updates as of January 1, 2016.

• Recognition and Measurement of Financial Assets and Financial Liabilities.    In January 2016, the Financial Accounting Standards Board (the “FASB”) issued an accounting update that changes the requirements for the recognition and measurement of certain financial assets and financial liabilities. The Firm early adopted the provision in this guidance relating to liabilities measured at fair value pursuant to a fair value option election that requires presenting unrealized DVA in Other comprehensive income (loss) (“OCI”), a change from the previous requirement to present DVA in net income. Realized DVA amounts will be recycled from AOCI to Trading revenues. DVA amounts from periods prior to adoption remain in Trading revenues as previously reported. A cumulative catch up adjustment, net of noncontrolling interests and tax, of $312 million was recorded as of January 1, 2016 to move the cumulative DVA loss amount from Retained earnings into AOCI.

Other provisions of this rule may not be early adopted and will be effective January 1, 2018, and are not expected to have a material impact on the consolidated financial statements.

• Amendments to the Consolidation Analysis.    In February 2015, the FASB issued an accounting update that provides a new consolidation model for certain entities, such as investment funds and limited partnerships. The adoption on January 1, 2016, increased total assets by $131 million, reflecting consolidations of $206 million net of deconsolidations of $75 million. The consolidations resulted primarily from certain funds in Investment Management where the Firm acts as a general partner.

• Simplifying the Presentation of Debt Issuance Costs.    In April 2015, the FASB issued an accounting update that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, instead of as an asset as was previously required. This guidance became effective for the Firm beginning January 1, 2016 and did not have a material impact in the consolidated financial statements.

The Firm adopted the following accounting updates as of January 1, 2016, which did not have an impact in the consolidated financial statements.

• Simplifying the Accounting for Measurement-Period Adjustments.

• Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity.

• Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity.

• Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.

7

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

3.        Fair Values

Fair Value Measurements

For a description of the valuation techniques applied to the Firm’s major categories of assets and liabilities measured at fair value on a recurring basis, see Note 3 to the consolidated financial statements in the 2015 Form 10-K. During the current quarter and current year period, there were no significant updates made to the Firm’s valuation techniques.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at June 30, 2016
	(dollars in millions)
Assets at Fair Value
Trading assets:
U.S. government and agency securities:
U.S. Treasury securities	$	24,565	$	—	$	—	$	—	$	24,565
U.S. agency securities		795		22,085		20		—		22,900
Total U.S. government and agency securities		25,360		22,085		20		—		47,465
Other sovereign government obligations		20,942		6,607		2		—		27,551
Corporate and other debt:
State and municipal securities		—		1,943		10		—		1,953
Residential mortgage-backed securities		—		586		216		—		802
Commercial mortgage-backed securities		—		961		51		—		1,012
Asset-backed securities		—		142		88		—		230
Corporate bonds		—		11,751		276		—		12,027
Collateralized debt and loan obligations		—		443		109		—		552
Loans and lending commitments(1)		—		3,879		5,418		—		9,297
Other debt		—		827		528		—		1,355
Total corporate and other debt		—		20,532		6,696		—		27,228
Corporate equities(2)		100,018		367		572		—		100,957
Securities received as collateral		10,121		7		—		—		10,128
Derivative and other contracts:
Interest rate contracts		791		462,243		540		—		463,574
Credit contracts		—		16,157		304		—		16,461
Foreign exchange contracts		140		76,264		101		—		76,505
Equity contracts		1,368		40,524		637		—		42,529
Commodity contracts		2,847		8,605		4,057		—		15,509
Other		—		16		—		—		16
Netting(3)		(4,184)		(505,871)		(2,537)		(63,844)		(576,436)
Total derivative and other contracts		962		97,938		3,102		(63,844)		38,158
Investments(4):
Principal investments		21		19		769		—		809
Other		295		559		205		—		1,059
Total investments		316		578		974		—		1,868
Physical commodities		—		193		—		—		193
Total trading assets(4)		157,719		148,307		11,366		(63,844)		253,548
AFS securities		31,062		36,664		—		—		67,726
Securities purchased under agreements to resell		—		555		—		—		555
Intangible assets		—		3		—		—		3
Total assets measured at fair value	$	188,781	$	185,529	$	11,366	$	(63,844)	$	321,832

8

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at June 30, 2016
	(dollars in millions)
Liabilities at Fair Value
Deposits	$	—	$	65	$	30	$	—	$	95
Short-term borrowings		—		511		—		—		511
Trading liabilities:
U.S. government and agency securities:
U.S. Treasury securities		12,983		—		—		—		12,983
U.S. agency securities		358		111		—		—		469
Total U.S. government and agency securities		13,341		111		—		—		13,452
Other sovereign government obligations		15,885		2,668		—		—		18,553
Corporate and other debt:
State and municipal securities		—		3		—		—		3
Asset-backed securities		—		449		—		—		449
Corporate bonds		—		5,578		6		—		5,584
Other debt		—		15		3		—		18
Total corporate and other debt		—		6,045		9		—		6,054
Corporate equities(2)		46,440		76		26		—		46,542
Obligation to return securities received as collateral		18,731		7		—		—		18,738
Derivative and other contracts:
Interest rate contracts		969		436,022		775		—		437,766
Credit contracts		—		16,403		1,418		—		17,821
Foreign exchange contracts		82		78,441		102		—		78,625
Equity contracts		1,262		43,177		2,110		—		46,549
Commodity contracts		2,368		7,652		2,759		—		12,779
Other		—		91		11		—		102
Netting(3)		(4,184)		(505,871)		(2,537)		(43,727)		(556,319)
Total derivative and other contracts		497		75,915		4,638		(43,727)		37,323
Total trading liabilities		94,894		84,822		4,673		(43,727)		140,662
Securities sold under agreements to repurchase		—		549		150		—		699
Other secured financings		—		2,480		441		—		2,921
Long-term borrowings		44		35,831		1,929		—		37,804
Total liabilities measured at fair value	$	94,938	$	124,258	$	7,223	$	(43,727)	$	182,692

9

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at December 31, 2015
	(dollars in millions)
Assets at Fair Value
Trading assets:
U.S. government and agency securities:
U.S. Treasury securities	$	17,658	$	—	$	—	$	—	$	17,658
U.S. agency securities		797		17,886		—		—		18,683
Total U.S. government and agency securities		18,455		17,886		—		—		36,341
Other sovereign government obligations		13,559		7,400		4		—		20,963
Corporate and other debt:
State and municipal securities		—		1,651		19		—		1,670
Residential mortgage-backed securities		—		1,456		341		—		1,797
Commercial mortgage-backed securities		—		1,520		72		—		1,592
Asset-backed securities		—		494		25		—		519
Corporate bonds		—		9,959		267		—		10,226
Collateralized debt and loan obligations		—		284		430		—		714
Loans and lending commitments(1)		—		4,682		5,936		—		10,618
Other debt		—		2,263		448		—		2,711
Total corporate and other debt		—		22,309		7,538		—		29,847
Corporate equities(2)		106,296		379		433		—		107,108
Securities received as collateral		11,221		3		1		—		11,225
Derivative and other contracts:
Interest rate contracts		406		323,586		2,052		—		326,044
Credit contracts		—		22,258		661		—		22,919
Foreign exchange contracts		55		64,608		292		—		64,955
Equity contracts		653		38,552		1,084		—		40,289
Commodity contracts		3,140		10,654		3,358		—		17,152
Other		—		219		—		—		219
Netting(3)		(3,840)		(380,443)		(3,120)		(55,562)		(442,965)
Total derivative and other contracts		414		79,434		4,327		(55,562)		28,613
Investments(4):
Principal investments		20		44		486		—		550
Other		163		310		221		—		694
Total investments		183		354		707		—		1,244
Physical commodities		—		321		—		—		321
Total trading assets(4)		150,128		128,086		13,010		(55,562)		235,662
AFS securities		34,351		32,408		—		—		66,759
Securities purchased under agreements to resell		—		806		—		—		806
Intangible assets		—		—		5		—		5
Total assets measured at fair value	$	184,479	$	161,300	$	13,015	$	(55,562)	$	303,232
Liabilities at Fair Value
Deposits	$	—	$	106	$	19	$	—	$	125
Short-term borrowings		—		1,647		1		—		1,648
Trading liabilities:
U.S. government and agency securities:
U.S. Treasury securities		12,932		—		—		—		12,932
U.S. agency securities		854		127		—		—		981
Total U.S. government and agency securities		13,786		127		—		—		13,913
Other sovereign government obligations		10,970		2,558		—		—		13,528
Corporate and other debt:
Commercial mortgage-backed securities		—		2		—		—		2
Corporate bonds		—		5,035		—		—		5,035
Lending commitments		—		3		—		—		3
Other debt		—		5		4		—		9
Total corporate and other debt		—		5,045		4		—		5,049
Corporate equities(2)		47,123		35		17		—		47,175
Obligation to return securities received as collateral		19,312		3		1		—		19,316
Derivative and other contracts:
Interest rate contracts		466		305,151		1,792		—		307,409
Credit contracts		—		22,160		1,505		—		23,665
Foreign exchange contracts		22		65,177		151		—		65,350
Equity contracts		570		42,447		3,115		—		46,132
Commodity contracts		3,012		9,431		2,308		—		14,751
Other		—		43		—		—		43
Netting(3)		(3,840)		(380,443)		(3,120)		(40,473)		(427,876)
Total derivative and other contracts		230		63,966		5,751		(40,473)		29,474
Total trading liabilities		91,421		71,734		5,773		(40,473)		128,455
Securities sold under agreements to repurchase		—		532		151		—		683
Other secured financings		—		2,393		461		—		2,854
Long-term borrowings		—		31,058		1,987		—		33,045
Total liabilities measured at fair value	$	91,421	$	107,470	$	8,392	$	(40,473)	$	166,810

10

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

AFS—Available for sale

(1) At June 30, 2016, Loans and lending commitments held at fair value consisted of $7,114 million of corporate loans, $1,721 million of residential real estate loans and $462 million of wholesale real estate loans. At December 31, 2015, Loans and lending commitments held at fair value consisted of $7,286 million of corporate loans, $1,885 million of residential real estate loans and $1,447 million of wholesale real estate loans.

(2) For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes.

(3) For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Counterparty and Cash Collateral Netting.” For contracts with the same counterparty, counterparty netting among positions classified within the same level is included within that shared level. For further information on derivative instruments and hedging activities, see Note 4.

(4) Amounts exclude certain investments that are measured at fair value using the net asset value (“NAV”) per share, which are not classified in the fair value hierarchy. At June 30, 2016 and December 31, 2015, the fair value of these investments was $3,246 million and $3,843 million, respectively. For additional disclosure about such investments, see “Fair Value of Investments Measured at Net Asset Value” herein.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for all periods presented. Level 3 instruments may be hedged with instruments classified in Level 1 and Level 2. As a result, the realized and unrealized gains (losses) for assets and liabilities within the Level 3 category presented in the following tables do not reflect the related realized and unrealized gains (losses) on hedging instruments that have been classified by the Firm within the Level 1 and/or Level 2 categories.

Additionally, both observable and unobservable inputs may be used to determine the fair value of positions that the Firm has classified within the Level 3 category. As a result, the unrealized gains (losses) during the period for assets and liabilities within the Level 3 category presented in the following tables herein may include changes in fair value during the period that were attributable to both observable and unobservable inputs.

11

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Roll-forward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Beginning Balance at March 31, 2016		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2016		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2016
	(dollars in millions)
Assets at Fair Value
Trading assets:
U.S. agency securities	$	8	$	—	$	—	$	(18)	$	—	$	—	$	30	$	20	$	—
Other sovereign government obligations		8		—		—		(3)		—		—		(3)		2		—
Corporate and other debt:
State and municipal securities		5		1		4		—		—		—		—		10		2
Residential mortgage-backed securities		292		3		—		(82)		—		—		3		216		(5)
Commercial mortgage-backed securities		59		(3)		1		(4)		—		—		(2)		51		(5)
Asset-backed securities		4		(4)		6		(1)		—		—		83		88		(4)
Corporate bonds		224		17		116		(35)		—		—		(46)		276		17
Collateralized debt and loan obligations		348		18		3		(178)		—		—		(82)		109		18
Loans and lending commitments		6,185		(46)		360		(484)		—		(596)		(1)		5,418		(55)
Other debt		527		4		13		(19)		—		—		3		528		2
Total corporate and other debt		7,644		(10)		503		(803)		—		(596)		(42)		6,696		(30)
Corporate equities		430		(63)		273		(82)		—		—		14		572		(63)
Net derivative and other contracts(2):
Interest rate contracts		169		(159)		2		—		(7)		42		(282)		(235)		(157)
Credit contracts		(723)		65		1		—		—		93		(550)		(1,114)		53
Foreign exchange contracts		126		(58)		—		—		—		(94)		25		(1)		(47)
Equity contracts		(1,832)		168		50		—		(140)		263		18		(1,473)		(106)
Commodity contracts		1,200		211		5		—		(4)		(88)		(26)		1,298		130
Other		—		—		—		—		—		—		(11)		(11)		—
Total net derivative and other contracts		(1,060)		227		58		—		(151)		216		(826)		(1,536)		(127)
Investments:
Principal investments		743		4		33		(11)		—		—		—		769		6
Other		179		1		25		—		—		—		—		205		1
Total investments		922		5		58		(11)		—		—		—		974		7
Intangible assets		4		—		—		—		—		—		(4)		—		—
Liabilities at Fair Value
Deposits	$	23	$	(1)	$	—	$	—	$	8	$	—	$	(2)	$	30	$	(1)
Trading liabilities:
Corporate and other debt:
Corporate bonds		6		(1)		(5)		29		—		—		(25)		6		(1)
Lending commitments		1		1		—		—		—		—		—		—		—
Other debt		4		—		(1)		—		—		—		—		3		—
Total corporate and other debt		11		—		(6)		29		—		—		(25)		9		(1)
Corporate equities		31		(28)		(33)		5		—		—		(5)		26		—
Obligation to return securities received as collateral		1		—		(1)		—		—		—		—		—		—
Securities sold under agreements to repurchase		151		1		—		—		—		—		—		150		1
Other secured financings		454		(14)		—		—		23		(22)		(28)		441		(14)
Long-term borrowings		1,798		21		—		—		164		(131)		119		1,929		26

12

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Beginning Balance at December 31, 2015		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2016		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstand- ing at June 30, 2016
	(dollars in millions)
Assets at Fair Value
Trading assets:
U.S. agency securities	$	—	$	1	$	—	$	(19)	$	—	$	—	$	38	$	20	$	1
Other sovereign government obligations		4		—		—		(5)		—		—		3		2		1
Corporate and other debt:
State and municipal securities		19		1		4		(15)		—		—		1		10		1
Residential mortgage-backed securities		341		(19)		19		(133)		—		—		8		216		(14)
Commercial mortgage-backed securities		72		(10)		—		(19)		—		—		8		51		(11)
Asset-backed securities		25		(7)		7		(18)		—		—		81		88		(8)
Corporate bonds		267		62		113		(128)		—		—		(38)		276		61
Collateralized debt and loan obligations		430		5		22		(224)		—		—		(124)		109		17
Loans and lending commitments		5,936		(111)		970		(720)		—		(672)		15		5,418		(121)
Other debt		448		(2)		133		(63)		—		—		12		528		(2)
Total corporate and other debt		7,538		(81)		1,268		(1,320)		—		(672)		(37)		6,696		(77)
Corporate equities		433		(45)		296		(119)		—		—		7		572		(64)
Securities received as collateral		1		—		—		(1)		—		—		—		—		—
Net derivative and other contracts(2):
Interest rate contracts		260		305		3		—		(21)		(60)		(722)		(235)		205
Credit contracts		(844)		(343)		1		—		—		153		(81)		(1,114)		(360)
Foreign exchange contracts		141		(109)		—		—		—		(201)		168		(1)		(82)
Equity contracts		(2,031)		(321)		71		—		(184)		1,121		(129)		(1,473)		(434)
Commodity contracts		1,050		297		7		—		(4)		(176)		124		1,298		210
Other		—		—		—		—		—		—		(11)		(11)		—
Total net derivative and other contracts		(1,424)		(171)		82		—		(209)		837		(651)		(1,536)		(461)
Investments:
Principal investments		486		(39)		403		(40)		—		(41)		—		769		(37)
Other		221		(17)		1		—		—		—		—		205		(16)
Total investments		707		(56)		404		(40)		—		(41)		—		974		(53)
Intangible assets		5		—		—		—		—		—		(5)		—		—
Liabilities at Fair Value
Deposits	$	19	$	(2)	$	—	$	—	$	13	$	—	$	(4)	$	30	$	(2)
Short-term borrowings		1		—		—		—		—		(1)		—		—		—
Trading liabilities:
Corporate and other debt:
Corporate bonds		—		(5)		(7)		10		—		—		(2)		6		(5)
Other debt		4		2		(3)		4		—		—		—		3		2
Total corporate and other debt		4		(3)		(10)		14		—		—		(2)		9		(3)
Corporate equities		17		(3)		(22)		18		—		—		10		26		(3)
Obligation to return securities received as collateral		1		—		(1)		—		—		—		—		—		—
Securities sold under agreements to repurchase		151		1		—		—		—		—		—		150		1
Other secured financings		461		(32)		—		—		69		(43)		(78)		441		(32)
Long-term borrowings		1,987		(12)		—		—		276		(167)		(179)		1,929		(6)

13

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Beginning Balance at March 31, 2015		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2015		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2015
	(dollars in millions)
Assets at Fair Value
Trading assets:
U.S. agency securities	$	—	$	—	$	—	$	(3)	$	—	$	—	$	6	$	3	$	—
Other sovereign government obligations		11		—		5		(1)		—		—		(3)		12		—
Corporate and other debt:
State and municipal securities		—		1		4		(9)		—		—		11		7		1
Residential mortgage-backed securities		296		2		138		(32)		—		—		(26)		378		2
Commercial mortgage-backed securities		180		(4)		5		(9)		—		—		(88)		84		(5)
Asset-backed securities		67		5		11		(64)		—		—		—		19		1
Corporate bonds		424		(4)		228		(150)		—		(2)		(17)		479		(16)
Collateralized debt and loan obligations		822		68		300		(439)		—		(78)		(13)		660		(10)
Loans and lending commitments		4,789		31		1,615		(351)		—		(491)		(81)		5,512		26
Other debt		486		(1)		130		(51)		—		—		—		564		(1)
Total corporate and other debt		7,064		98		2,431		(1,105)		—		(571)		(214)		7,703		(2)
Corporate equities		230		38		266		(92)		—		—		44		486		26
Securities received as collateral		33		—		—		(30)		—		—		—		3		—
Net derivative and other contracts(2):
Interest rate contracts		(496)		95		4		—		(13)		14		160		(236)		135
Credit contracts		(984)		(24)		4		—		(24)		23		16		(989)		(29)
Foreign exchange contracts		297		57		—		—		(1)		43		50		446		82
Equity contracts		(2,472)		(23)		39		—		(54)		206		202		(2,102)		(161)
Commodity contracts		1,345		4		2		—		(112)		(34)		—		1,205		(27)
Total net derivative and other contracts		(2,310)		109		49		—		(204)		252		428		(1,676)		—
Investments:
Principal investments		829		(21)		5		(12)		—		(205)		(15)		581		(21)
Other		391		(4)		—		—		—		—		(87)		300		—
Total investments		1,220		(25)		5		(12)		—		(205)		(102)		881		(21)
Intangible assets		5		1		—		—		—		—		—		6		1
Liabilities at Fair Value
Trading liabilities:
Corporate and other debt:
Corporate bonds	$	23	$	—	$	(21)	$	15	$	—	$	—	$	(2)	$	15	$	—
Other debt		23		—		—		10		—		(29)		—		4		—
Total corporate and other debt		46		—		(21)		25		—		(29)		(2)		19		—
Corporate equities		50		240		(49)		2		—		—		349		112		240
Obligation to return securities received as collateral		33		—		(30)		—		—		—		—		3		—
Securities sold under agreements to repurchase		154		—		—		—		—		—		—		154		—
Other secured financings		133		2		—		—		37		—		—		168		2
Long-term borrowings		1,738		51		—		—		549		(88)		73		2,221		51

14

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Beginning Balance at December 31, 2014		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2015		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2015
	(dollars in millions)
Assets at Fair Value
Trading assets:
U.S. agency securities	$	—	$	—	$	3	$	—	$	—	$	—	$	—	$	3	$	—
Other sovereign government obligations		41		1		6		(32)		—		—		(4)		12		1
Corporate and other debt:
State and municipal securities		—		1		4		—		—		—		2		7		1
Residential mortgage-backed securities		175		21		163		(51)		—		—		70		378		12
Commercial mortgage-backed securities		96		(6)		16		(22)		—		—		—		84		(9)
Asset-backed securities		76		(4)		11		(29)		—		—		(35)		19		2
Corporate bonds		386		10		213		(126)		—		(1)		(3)		479		9
Collateralized debt and loan obligations		1,152		145		404		(682)		—		(331)		(28)		660		(6)
Loans and lending commitments		5,874		35		2,082		(209)		—		(2,078)		(192)		5,512		30
Other debt		285		(8)		12		—		—		(1)		276		564		6
Total corporate and other debt		8,044		194		2,905		(1,119)		—		(2,411)		90		7,703		45
Corporate equities		272		64		260		(147)		—		—		37		486		49
Securities received as collateral		—		—		3		—		—		—		—		3		—
Net derivative and other contracts(2):
Interest rate contracts		(173)		188		9		—		(20)		124		(364)		(236)		197
Credit contracts		(743)		(276)		17		—		(54)		31		36		(989)		(284)
Foreign exchange contracts		151		121		—		—		(1)		144		31		446		120
Equity contracts		(2,165)		(73)		69		—		(225)		156		136		(2,102)		(160)
Commodity contracts		1,146		299		3		—		(112)		(72)		(59)		1,205		234
Total net derivative and other contracts		(1,784)		259		98		—		(412)		383		(220)		(1,676)		107
Investments:
Principal investments		835		(4)		15		(46)		—		(205)		(14)		581		(26)
Other		323		(16)		2		(6)		—		—		(3)		300		(12)
Total investments		1,158		(20)		17		(52)		—		(205)		(17)		881		(38)
Intangible assets		6		1		—		—		—		(1)		—		6		1
Liabilities at Fair Value
Trading liabilities:
Corporate and other debt:
Corporate bonds	$	78	$	(2)	$	(12)	$	14	$	—	$	—	$	(67)	$	15	$	(2)
Lending commitments		5		5		—		—		—		—		—		—		5
Other debt		38		—		—		6		—		(39)		(1)		4		—
Total corporate and other debt		121		3		(12)		20		—		(39)		(68)		19		3
Corporate equities		45		19		(75)		25		—		—		136		112		20
Obligation to return securities received as collateral		—		—		—		3		—		—		—		3		—
Securities sold under agreements to repurchase		153		(1)		—		—		—		—		—		154		(1)
Other secured financings		149		(6)		—		—		37		(24)		—		168		2
Long-term borrowings		1,934		65		—		—		612		(300)		40		2,221		59

(1) Loan originations and consolidations of VIEs are included in purchases.

(2) Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. For further information on derivative instruments and hedging activities, see Note 4.

15

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Significant Unobservable Inputs Used in Recurring Level 3 Fair Value Measurements

The following disclosures provide information on the valuation techniques, significant unobservable inputs, and their ranges and averages for each major category of assets and liabilities measured at fair value on a recurring basis with a significant Level 3 balance. The level of aggregation and breadth of products cause the range of inputs to be wide and not evenly distributed across the inventory. Further, the range of unobservable inputs may differ across firms in the financial services industry because of diversity in the types of products included in each firm’s inventory. The following disclosures also include qualitative information on the sensitivity of the fair value measurements to changes in the significant unobservable inputs.

Recurring Level 3 Fair Value Measurements Valuation Techniques and Sensitivity of Unobservable Inputs

	Balance at June 30, 2016		Valuation Technique(s) / Significant Unobservable Input(s) / Sensitivity of the Fair Value to Changes in the Unobservable Inputs	Range(1)	Averages(2)
	(dollars in millions)
Assets at Fair Value
Trading assets:
Corporate and other debt:
Residential mortgage-backed securities		$            216	Comparable pricing:
			Comparable bond price / (A)	0 to 79 points	20 points
Commercial mortgage-backed securities		51	Comparable pricing:
			Comparable bond price / (A)	0 to 7 points	1 point
Asset-backed securities		88	Comparable pricing:
			Comparable bond price / (A)	45 to 55 points	46 points
Corporate bonds		276	Comparable pricing(3):
			Comparable bond price / (A)	3 to 135 points	91 points
			Comparable pricing:
			EBITDA multiple / (A)	5 to 10 times	7 times
Collateralized debt and loan obligations		109	Comparable pricing(3):
			Comparable bond price / (A)	20 to 95 points	57 points
			Correlation model:
			Credit correlation / (B)	29% to 61%	42%
Loans and lending commitments		5,418	Corporate loan model:
			Credit spread / (C)	482 to 898 bps	596 bps
			Margin loan model(3):
			Credit spread / (C)(D)	31 to 102 bps	86 bps
			Volatility skew / (C)(D)	20% to 46%	32%
			Discount rate / (C)(D)	1% to 8%	3%
			Expected recovery:
			Asset coverage / (A)	47% to 99%	90%
			Option model:
			Volatility skew / (C)	-1%	-1%
			Comparable pricing:
			Comparable loan price / (A)	43 to 100 points	87 points
			Discounted cash flow:
			Implied weighted average cost of capital / (C)(D)	5% to 6%	6%
			Capitalization rate / (C)(D)	4% to 10%	4%

16

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Balance at June 30, 2016		Valuation Technique(s) / Significant Unobservable Input(s) / Sensitivity of the Fair Value to Changes in the Unobservable Inputs	Range(1)	Averages(2)
	(dollars in millions)
Other debt		528	Comparable pricing:
			Comparable loan price / (A)	3 to 84 points	66 points
			Comparable pricing:
			Comparable bond price / (A)	7 points	7 points
			Option model:
			At the money volatility / (C)	16% to 53%	53%
			Margin loan model(3):
			Discount rate / (C)	1% to 2%	2%
			Discounted cash flow:
			Discount rate / (C)	10% to 13%	12%
Corporate equities		572	Comparable pricing:
			Comparable equity price / (A)	100%	100%
Net derivative and other contracts(4):
Interest rate contracts		(235)	Option model(3):
			Interest rate - Foreign exchange correlation / (A)(D)	25% to 55%	42% / 42% (5)
			Interest rate volatility skew / (A)(D)	34% to 143%	78% / 77% (5)
			Interest rate quanto correlation / (A)(D)	-8% to 35%	2% / -7% (5)
			Interest rate curve correlation / (C)(D)	19% to 95%	71% / 76% (5)
			Inflation volatility / (A)(D)	0% to 1%	1% / 1% (5)
			Interest rate - Inflation correlation / (A)(D)	-24% to -44%	-34% / -33% (5)
			Interest rate curve / (C)(D)	0% to 1%	1% / 1% (5)
			Foreign exchange volatility skew / (C)(D)	0% to 11%	4% / 6% (5)
			Comparable pricing:
			Comparable bond price / (C)	95 to 100 points	96 points
Credit contracts		(1,114)	Comparable pricing:
			Cash synthetic basis / (C)(D)	5 to 12 points	10 points
			Comparable bond price / (C)(D)	0 to 85 points	26 points
			Correlation model(3):
			Credit correlation / (B)	29% to 92%	49%
Foreign exchange contracts(6)		(1)	Option model:
			Interest rate - Foreign exchange correlation / (A)(D)	25% to 55%	42% / 42% (5)
			Interest rate volatility skew / (A)(D)	34% to 143%	78% / 77% (5)
			Interest rate curve / (A)(D)	0%	0% / 0% (5)
			Interest rate curve correlation / (C)(D)	19% to 94%	73% / 81% (5)
Equity contracts(6)		(1,473)	Option model:
			At the money volatility / (A)(D)	6% to 81%	35%
			Volatility skew / (A)(D)	-4% to 0%	-1%
			Equity - Equity correlation / (A)(D)	40% to 98%	79%
			Equity - Foreign exchange correlation / (C)(D)	-70% to -31%	-42%
			Equity - Interest rate correlation / (C)(D)	-7% to 50%	19% / 12% (5)
Commodity contracts		1,298	Option model:
			Forward power price / (C)(D)	$2 to $95 per megawatt hour	$34 per megawatt hour
			Commodity volatility / (C)(D)	6% to 90%	18%
			Cross commodity correlation / (C)(D)	5% to 99%	93%

17

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Balance at June 30, 2016		Valuation Technique(s) / Significant Unobservable Input(s) / Sensitivity of the Fair Value to Changes in the Unobservable Inputs	Range(1)	Averages(2)
	(dollars in millions)
Investments:
Principal investments		769	Discounted cash flow:
			Implied weighted average cost of capital / (C)(D)	13% to 16%	15%
			Exit multiple / (A)(D)	8 to 23 times	9 times
			Market approach(3):
			EBITDA multiple / (A)(D)	6 to 25 times	12 times
			Forward capacity price / (A)(D)	$4 to $9	$7
			Comparable pricing:
			Comparable equity price / (A)	43% to 100%	82%
Other		205	Discounted cash flow:
			Implied weighted average cost of capital / (C)(D)	9%	9%
			Exit multiple / (A)(D)	13 times	13 times
			Market approach:
			EBITDA multiple / (A)(D)	6 to 13 times	12 times
			Comparable pricing(3):
			Comparable equity price / (A)	100%	100%
Liabilities at Fair Value
Securities sold under agreements to repurchase		150	Discounted cash flow:
			Funding spread / (A)	117 to 123 bps	120 bps
Other secured financings		441	Option model:
			Volatility skew / (C)	-1%	-1%
			Discounted cash flow(3):
			Discount rate / (C)	4%	4%
			Discounted cash flow:
			Funding spread / (A)	101 to 126 bps	114 bps
Long-term borrowings		1,929	Option model(3):
			At the money volatility / (C)(D)	6% to 48%	29%
			Volatility skew / (C)(D)	-2% to 0%	-1%
			Equity - Equity correlation / (C)(D)	50% to 98%	75%
			Equity - Foreign exchange correlation / (C)(D)	-50% to 11%	-25%
			Option model:
			Interest rate - credit spread correlation / (A)(D)	-52% to 3%	-24% / -23% (5)
			Interest rate - Foreign exchange correlation /
			(A)(D)	53%	53% / 53% (5)
			Interest rate - equity correlation / (A)(D)	7% to 44%	26% / 26% (5)
			Interest rate curve correlation / (C)(D)	40% to 87%	73% / 78% (5)
			Correlation model:
			Credit correlation / (B)	33% to 61%	44%
			Comparable pricing:
			Comparable equity price / (A)	100%	100%

18

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Balance at December 31, 2015			Valuation Technique(s) / Significant Unobservable Input(s) / Sensitivity of the Fair Value to Changes in the Unobservable Inputs	Range(1)	Averages(2)
	(dollars in millions)
Assets at Fair Value
Trading assets:
Corporate and other debt:
Residential mortgage-backed securities		$	341	Comparable pricing:
				Comparable bond price / (A)	0 to 75 points	32 points
Commercial mortgage-backed securities			72	Comparable pricing:
				Comparable bond price / (A)	0 to 9 points	2 points
Corporate bonds			267	Comparable pricing(3):
				Comparable bond price / (A)	3 to 119 points	90 points
				Comparable pricing:
				EBITDA multiple / (A)	7 to 9 times	8 times
				Structured bond model:
				Discount rate / (C)	15%	15%
Collateralized debt and loan obligations			430	Comparable pricing(3):
				Comparable bond price / (A)	47 to 103 points	67 points
				Correlation model:
				Credit correlation / (B)	39% to 60%	49%
Loans and lending commitments			5,936	Corporate loan model:
				Credit spread / (C)	250 to 866 bps	531 bps
				Margin loan model(3):
				Credit spread / (C)(D)	62 to 499 bps	145 bps
				Volatility skew / (C)(D)	14% to 70%	33%
				Discount rate / (C)(D)	1% to 4%	2%
				Option model:
				Volatility skew / (C)	-1%	-1%
				Comparable pricing:
				Comparable loan price / (A)	35 to 100 points	88 points
				Discounted cash flow:
				Implied weighted average cost of capital / (C)(D)	6% to 8%	7%
				Capitalization rate / (C)(D)	4% to 10%	4%
Other debt			448	Comparable pricing:
				Comparable loan price / (A)	4 to 84 points	59 points
				Comparable pricing:
				Comparable bond price / (A)	8 points	8 points
				Option model:
				At the money volatility / (C)	16% to 53%	53%
				Margin loan model(3):
				Discount rate / (C)	1%	1%
Corporate equities			433	Comparable pricing:
				Comparable price / (A)	50% to 80%	72%
				Comparable pricing(3):
				Comparable equity price / (A)	100%	100%
				Market approach:
				EBITDA multiple / (A)	9 times	9 times

19

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Balance at December 31, 2015		Valuation Technique(s) / Significant Unobservable Input(s) / Sensitivity of the Fair Value to Changes in the Unobservable Inputs	Range(1)	Averages(2)
	(dollars in millions)
Net derivative and other contracts(4):
Interest rate contracts		260	Option model:
			Interest rate volatility concentration liquidity multiple / (C)(D)	0 to 3 times	2 times
			Interest rate - Foreign exchange correlation / (C)(D)	25% to 62%	43% / 43%(5)
			Interest rate volatility skew / (A)(D)	29% to 82%	43% / 40%(5)
			Interest rate quanto correlation / (A)(D)	-8% to 36%	5% / -6%(5)
			Interest rate curve correlation / (C)(D)	24% to 95%	60% / 69%(5)
			Inflation volatility / (A)(D)	58%	58% / 58%(5)
			Interest rate - Inflation correlation / (A)(D)	-41% to -39%	-41% / -41%(5)
Credit contracts		(844)	Comparable pricing:
			Cash synthetic basis / (C)(D)	5 to 12 points	9 points
			Comparable bond price / (C)(D)	0 to 75 points	24 points
			Correlation model(3):
			Credit correlation / (B)	39% to 97%	57%
Foreign exchange contracts(6)		141	Option model:
			Interest rate - Foreign exchange correlation / (C)(D)	25% to 62%	43% / 43%(5)
			Interest rate volatility skew / (A)(D)	29% to 82%	43% / 40%(5)
			Interest rate curve / (A)(D)	0%	0% / 0%(5)
Equity contracts(6)		(2,031)	Option model:
			At the money volatility / (A)(D)	16% to 65%	32%
			Volatility skew / (A)(D)	-3% to 0%	-1%
			Equity - Equity correlation / (C)(D)	40% to 99%	71%
			Equity - Foreign exchange correlation / (A)(D)	-60% to -11%	-39%
			Equity - Interest rate correlation / (C)(D)	-29% to 50%	16% / 8%(5)
Commodity contracts		1,050	Option model:
			Forward power price / (C)(D)	$3 to $91 per	$32 per
				megawatt hour	megawatt hour
			Commodity volatility / (A)(D)	10% to 92%	18%
			Cross commodity correlation / (C)(D)	43% to 99%	93%
Investments:
Principal investments		486	Discounted cash flow:
			Implied weighted average cost of capital / (C)(D)	16%	16%
			Exit multiple / (A)(D)	8 to 14 times	9 times
			Capitalization rate / (C)(D)	5% to 9%	6%
			Equity discount rate / (C)(D)	20% to 35%	26%
			Market approach(3):
			EBITDA multiple / (A)(D)	8 to 20 times	11 times
			Forward capacity price / (A)(D)	$5 to $9	$7
			Comparable pricing:
			Comparable equity price / (A)	43% to 100%	81%
Other		221	Discounted cash flow:
			Implied weighted average cost of capital / (C)(D)	10%	10%
			Exit multiple / (A)(D)	13 times	13 times
			Market approach:
			EBITDA multiple / (A)	7 to 14 times	12 times
			Comparable pricing(3):
			Comparable equity price / (A)	100%	100%

20

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Balance at December 31, 2015			Valuation Technique(s) / Significant Unobservable Input(s) / Sensitivity of the Fair Value to Changes in the Unobservable Inputs	Range(1)	Averages(2)
	(dollars in millions)
Liabilities at Fair Value
Securities sold under agreements to repurchase		$	151	Discounted cash flow:
				Funding spread / (A)	86 to 116 bps	105 bps
Other secured financings			461	Option model:
				Volatility skew / (C)	-1%	-1%
				Discounted cash flow(3):
				Discount rate / (C)	4% to 13%	4%
				Discounted cash flow:
				Funding spread / (A)	95 to 113 bps	104 bps
Long-term borrowings			1,987	Option model(3):
				At the money volatility / (C)(D)	20% to 50%	29%
				Volatility skew / (A)(D)	-1% to 0%	-1%
				Equity - Equity correlation / (A)(D)	40% to 97%	77%
				Equity - Foreign exchange correlation / (C)(D)	-70% to -11%	-39%
				Option model:
				Interest rate volatility skew / (A)(D)	50%	50%
				Equity volatility discount / (A)(D)	10%	10%
				Correlation model:
				Credit correlation / (B)	40% to 60%	52%
				Comparable pricing:
				Comparable equity price / (A)	100%	100%

bps—Basis points

EBITDA—Earnings before interest, taxes, depreciation and amortization

(1) The range of significant unobservable inputs is represented in points, percentages, basis points, times or megawatt hours. Points are a percentage of par; for example, 79 points would be 79% of par. A basis point equals 1/100th of 1%; for example, 898 bps would equal 8.98%.

(2) Amounts represent weighted averages except where simple averages and the median of the inputs are provided (see footnote 5 below). Weighted averages are calculated by weighting each input by the fair value of the respective financial instruments except for collateralized debt and loan obligations, principal investments, other debt, corporate bonds, long-term borrowings and derivative instruments where some or all inputs are weighted by risk.

(3) This is the predominant valuation technique for this major asset or liability class.

(4) Credit valuation adjustments (“CVA”) and funding valuation adjustments (“FVA”) are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Input(s) in the previous table. CVA is a Level 3 input when the underlying counterparty credit curve is unobservable. FVA is a Level 3 input in its entirety given the lack of observability of funding spreads in the principal market.

(5) The data structure of the significant unobservable inputs used in valuing interest rate contracts, foreign exchange contracts, certain equity contracts and certain long-term borrowings may be in a multi-dimensional form, such as a curve or surface, with risk distributed across the structure. Therefore, a simple average and median, together with the range of data inputs, may be more appropriate measurements than a single point weighted average.

(6) Includes derivative contracts with multiple risks (i.e., hybrid products).

Sensitivity of the fair value to changes in the unobservable inputs:

(A) Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement.

(B) Significant changes in credit correlation may result in a significantly higher or lower fair value measurement. Increasing (decreasing) correlation drives a redistribution of risk within the capital structure such that junior tranches become less (more) risky and senior tranches become more (less) risky.

(C) Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement.

(D) There are no predictable relationships between the significant unobservable inputs.

For a description of the Firm’s significant unobservable inputs for all major categories of assets and liabilities, see Note 3 to the consolidated financial statements in the 2015 Form 10-K. The following provides a description of an update to significant unobservable inputs included in the 2015 Form 10-K.

• Asset Coverage—the ratio of a borrower’s underlying pledged assets less applicable costs relative to their outstanding debt (while considering the loan’s principal and the seniority and security of the loan commitment).

During the current quarter and current year period, there were no other significant updates made to the Firm’s significant unobservable inputs.

21

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Fair Value of Investments Measured at Net Asset Value

For a description of the Firm’s investments in private equity funds, real estate funds and hedge funds measured at fair value based on NAV, see Note 3 to the consolidated financial statements in the 2015 Form 10-K.

Investments in Certain Funds Measured at NAV per Share

	At June 30, 2016				At December 31, 2015
	Fair Value		Commitment		Fair Value		Commitment
	(dollars in millions)
Private equity funds	$	1,698	$	395	$	1,917	$	538
Real estate funds		1,228		111		1,337		128
Hedge funds		320		4		589		4
Total	$	3,246	$	510	$	3,843	$	670

Fair Value of Non-Redeemable Funds by Projected Distribution

	At June 30, 2016
	Private Equity       Funds		Real Estate           Funds
	(dollars in millions)
Less than 5 years	$	128	$	94
5-10 years		911		669
Over 10 years		659		465
Total	$	1,698	$	1,228

Restrictions

Investments in hedge funds may be subject to initial period lock-up restrictions or gates. A hedge fund lock-up provision restricts an investor from making a withdrawal from the fund. The purpose of a gate is to restrict the level of redemptions that an investor in a particular hedge fund can demand on any redemption date.

Redemption Frequency as Percentage of Hedge Fund Fair Value

	At June 30, 2016
Hedge Funds(1)
Quarterly	55%
Every Six Months	20%
Greater than Six Months	19%

___________

(1) The redemption notice period was primarily three months or greater.

Hedge fund investments representing approximately 6% of the fair value cannot be redeemed currently because the investments include certain initial period lock-up restrictions. The remaining restriction period for these investments was primarily over three years at June 30, 2016. Hedge fund investments representing approximately 26% of the fair value cannot be redeemed as of June 30, 2016 because an exit restriction has been imposed by the hedge fund manager primarily for indefinite periods.

22

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Fair Value Option

The Firm elected the fair value option for certain eligible instruments that are risk managed on a fair value basis to mitigate income statement volatility caused by measurement basis differences between the elected instruments and their associated risk management transactions or to eliminate complexities of applying certain accounting models.

Impact on Earnings of Transactions Under the Fair Value Option Election

In addition to the amounts in the following table, as discussed in Note 2 to the consolidated financial statements in the 2015 Form 10-K, instruments within Trading assets or Trading liabilities are measured at fair value. The amounts in this table are included within Net revenues and do not reflect gains or losses on related hedging instruments, if any.

	Trading     Revenues		Interest Income         (Expense)		Gains (Losses) Included in     Net Revenues
	(dollars in millions)
Three Months Ended June 30, 2016
Securities purchased under agreements to resell	$	(1)	$	2	$	1
Deposits(1)		(1)		(1)		(2)
Short-term borrowings(1)		(9)		—		(9)
Securities sold under agreements to repurchase(1)		(3)		(3)		(6)
Long-term borrowings(1)		(1,289)		(130)		(1,419)
Six Months Ended June 30, 2016
Securities purchased under agreements to resell	$	(1)	$	4	$	3
Deposits(1)		(3)		(1)		(4)
Short-term borrowings(1)		36		—		36
Securities sold under agreements to repurchase(1)		(12)		(5)		(17)
Long-term borrowings(1)		(2,254)		(269)		(2,523)
Three Months Ended June 30, 2015
Securities purchased under agreements to resell	$	(2)	$	5	$	3
Short-term borrowings(2)		(2)		—		(2)
Securities sold under agreements to repurchase(2)		6		(2)		4
Long-term borrowings(2)		152		(138)		14
Six Months Ended June 30, 2015
Securities purchased under agreements to resell	$	(3)	$	5	$	2
Short-term borrowings(2)		(42)		—		(42)
Securities sold under agreements to repurchase(2)		4		(3)		1
Long-term borrowings(2)		1,089		(270)		819

(1) Gains (losses) are mainly attributable to changes in foreign currency rates or interest rates or movements in the reference price or index for short-term and long-term borrowings before the impact of related hedges. In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains of $225 million and $548 million are recorded within OCI in the consolidated statements of comprehensive income and not included in this table for the current quarter and current year period, respectively. See Notes 2 and 14 for further information.

(2) Gains (losses) recorded in Trading revenues for the prior year quarter and prior year period are attributable to DVA and the respective remainder is attributable to changes in foreign currency rates or interest rates or movements in the reference price or index for structured notes before the impact of related hedges.

23

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Gains (Losses) due to Changes in Instrument-Specific Credit Risk

	Three Months Ended June 30,								Six Months Ended June 30,
	2016				2015				2016				2015
	Trading     Revenues		OCI		Trading     Revenues		OCI		Trading     Revenues		OCI		Trading     Revenues		OCI
	(dollars in millions)
Short-term and long-term borrowings(1)	$	—	$	226	$	182	$	—	$	41	$	545	$	307	$	—
Securities sold under agreements to repurchase(1)		—		(1)		—		—		—		3		—		—
Loans and other debt(2)		(14)		—		(6)		—		(114)		—		71		—
Lending commitments(3)		2		—		(1)		—		3		—		8		—

(1) In accordance with the early adoption of a provision of the accounting update, Recognition and Measurement of Financial Assets and Financial Liabilities, for the current quarter and current year period DVA gains (losses) are recorded in OCI when unrealized and in Trading revenues when realized. In the prior year quarter and prior year period, the realized and unrealized DVA gains (losses) are recorded in Trading revenues. The cumulative impact of changes in the Firm’s DVA and the pre-tax amount recognized in AOCI is a gain of $87 million at June 30, 2016. See Notes 2 and 14 for further information.

(2) Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses, such as those due to changes in interest rates.

(3) Gains (losses) on lending commitments were generally determined based on the differential between estimated expected client yields and contractual yields at each respective period-end.

Net Difference of Contractual Principal Amount Over Fair Value

	At June 30,         2016		At December 31,         2015
	(dollars in millions)
Loans and other debt(1)	$	15,046	$	14,095
Loans 90 or more days past due and/or on nonaccrual status(1)		12,867		11,651
Short-term and long-term borrowings(2)		311		508

____________

(1) The majority of the difference between principal and fair value amounts for loans and other debt emanates from the distressed debt trading business, which purchases distressed debt at amounts well below par.

(2) Short-term and long-term borrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in the reference price or index.

Short-Term and Long-Term Borrowings Measured at Fair Value on a Recurring Basis

	At June 30,         2016		At December 31,     2015
Business Unit Responsible for Risk Management	(dollars in millions)
Equity	$	19,696	$	17,789
Interest rates		16,728		14,255
Credit and foreign exchange		1,570		2,266
Commodities		321		383
Total	$	38,315	$	34,693

Fair Value of Loans in Nonaccrual Status

	At June 30,         2016		At December 31,         2015
	(dollars in millions)
Aggregate fair value of loans in nonaccrual status(1)	$	1,717	$	1,853

____________

(1) Includes all loans 90 or more days past due in the amount of $514 million and $885 million at June 30, 2016 and December 31, 2015, respectively.

The previous tables exclude non-recourse debt from consolidated VIEs, liabilities related to failed sales of financial assets, pledged commodities and other liabilities that have specified assets attributable to them.

24

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Certain assets and liabilities were measured at fair value on a non-recurring basis and are not included in the previous tables.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

			Fair Value by Level
	Carrying Value at June 30,     2016(1)		Level 1		Level 2		Level 3		Total Gains (Losses) for the Three Months Ended June 30, 2016(2)		Total Gains (Losses) for Six Months Ended June 30, 2016(2)
	(dollars in millions)
Assets:
Loans(3)	$	6,700		$        —	$	4,276	$	2,424	$	(34)	$	(131)
Other assets—Other investments(4)		82		—		—		82		(38)		(40)
Other assets—Premises, equipment and software costs(5)		—		—		—		—		(22)		(27)
Total assets	$	6,782		$        —	$	4,276	$	2,506	$	(94)	$	(198)
Liabilities:
Other liabilities and accrued expenses(3)	$	402		$        —	$	331	$	71	$	13	$	24
Total liabilities	$	402		$        —	$	331	$	71	$	13	$	24

			Fair Value by Level
	Carrying Value at June 30,     2015(1)		Level 1		Level 2		Level 3		Total Gains (Losses) for the Three Months Ended June 30, 2015(2)		Total Gains (Losses) for the Six Months Ended June 30, 2015(2)
	(dollars in millions)
Assets:
Loans(3)	$	3,244		$        —	$	2,458	$	786	$	47	$	8
Other assets—Other investments(4)		—		—		—		—		—		(2)
Other assets—Premises, equipment and software costs(5)		—		—		—		—		(2)		(22)
Total assets	$	3,244		$        —	$	2,458	$	786	$	45	$	(16)
Liabilities:
Other liabilities and accrued expenses(3)	$	283		$        —	$	244	$	39	$	(45)		(48)
Total liabilities	$	283		$        —	$	244	$	39	$	(45)		(48)

(1) Carrying values relate only to those assets that had fair value adjustments during the current quarter and prior year quarter.

(2) Changes in the fair value of Loans and losses related to Other assets—Other investments are recorded within Other revenues in the consolidated statements of income. Losses related to Other assets—Premises, equipment and software costs are recorded within Other expenses if not held for sale and within Other revenues if held for sale. Changes in the fair value of lending commitments reported in Other liabilities and accrued expenses that are designated as held for sale are recorded within Other revenues, whereas, changes in the fair value related to held for investment lending commitments are recorded within Other expenses.

(3) Non-recurring changes in the fair value of loans and lending commitments held for investment were calculated using the value of the underlying collateral. Loans and lending commitments held for sale were calculated using recently executed transactions; market price quotations; valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and credit default swap spread levels adjusted for any basis difference between cash and derivative instruments; or default recovery analysis where such transactions and quotations are unobservable.

(4) Losses related to Other assets—Other investments were determined primarily using discounted cash flow models and methodologies that incorporate multiples of certain comparable companies.

(5) Losses related to Other assets—Premises, equipment and software costs were determined primarily using a default recovery analysis.

Included in the losses within the previous table for the current quarter and current year period, there was a loss of approximately $35 million (related to Other assets—Other investments) in connection with the sale of solar invest-

ments and impairments of the remaining unsold solar investments accounted for under the equity method. The fair value of these investments was determined based on the sales price.

25

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Financial Instruments Not Measured at Fair Value

For a further discussion of financial instruments not measured at fair value, see Note 3 to the consolidated financial statements in the 2015 Form 10-K. The carrying values of the remaining assets and liabilities not measured at fair value in the following tables approximate fair value due to their short-term nature. The following tables exclude certain financial instruments such as equity method investments and all non-financial assets and liabilities such as the value of the long-term relationships with the Firm’s deposit customers.

	At June 30, 2016				Fair Value by Level
	Carrying       Value		Fair Value		Level 1		Level 2		Level 3
	(dollars in millions)
Financial Assets:
Cash and due from banks	$	27,597	$	27,597	$	27,597	$	—	$	—
Interest bearing deposits with banks		28,536		28,536		28,536		—		—
Investment securities—HTM securities		12,418		12,567		3,758		8,809		—
Securities purchased under agreements to resell		97,034		97,042		—		95,140		1,902
Securities borrowed		131,281		131,282		—		131,156		126
Customer and other receivables(1)		48,910		48,815		—		44,033		4,782
Loans(2)		93,165		94,151		—		25,289		68,862
Other assets—Cash deposited with clearing organizations or segregated under federal and other regulations or requirements		32,771		32,771		32,771		—		—
Financial Liabilities:
Deposits	$	152,598	$	152,788	$	—	$	152,788	$	—
Short-term borrowings		369		369		—		369		—
Securities sold under agreements to repurchase		49,629		49,692		—		48,033		1,659
Securities loaned		17,241		17,262		—		17,262		—
Other secured financings		6,980		6,991		—		5,596		1,395
Customer and other payables(1)		197,978		197,978		—		197,978		—
Long-term borrowings		125,688		127,189		—		127,189		—

	At December 31, 2015				Fair Value by Level
	Carrying       Value		Fair Value		Level 1		Level 2		Level 3
	(dollars in millions)
Financial Assets:
Cash and due from banks	$	19,827	$	19,827	$	19,827	$	—	$	—
Interest bearing deposits with banks		34,256		34,256		34,256		—		—
Investment securities—HTM securities		5,224		5,188		998		4,190		—
Securities purchased under agreements to resell		86,851		86,837		—		86,186		651
Securities borrowed		142,416		142,414		—		142,266		148
Customer and other receivables(1)		41,676		41,576		—		36,752		4,824
Loans(2)		85,759		86,423		—		19,241		67,182
Other assets—Cash deposited with clearing organizations or segregated under federal and other regulations or requirements		31,469		31,469		31,469		—		—
Financial Liabilities:
Deposits	$	155,909	$	156,163	$	—	$	156,163	$	—
Short-term borrowings		525		525		—		525		—
Securities sold under agreements to repurchase		36,009		36,060		—		34,150		1,910
Securities loaned		19,358		19,382		—		19,192		190
Other secured financings		6,610		6,610		—		5,333		1,277
Customer and other payables(1)		183,895		183,895		—		183,895		—
Long-term borrowings		120,723		123,219		—		123,219		—

HTM—Held to maturity

(1) Accrued interest, fees, and dividend receivables and payables where carrying value approximates fair value have been excluded.

(2) Amounts include all loans measured at fair value on a non-recurring basis.

26

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

At June 30, 2016 and December 31, 2015, notional amounts of approximately $93.8 billion and $99.5 billion, respectively, of the Firm’s lending commitments were held for investment and held for sale, which are not included in the previous table. The estimated fair value of such lending commitments was a liability of $1,841 million and $2,172

million, respectively, at June 30, 2016 and December 31, 2015. Had these commitments been accounted for at fair value, $1,610 million would have been categorized in Level 2 and $231 million in Level 3 at June 30, 2016, and $1,791 million would have been categorized in Level 2 and $381 million in Level 3 at December 31, 2015.

4. Derivative Instruments and Hedging Activities

For a discussion of the Firm’s derivative instruments and hedging activities, see Note 4 to the consolidated financial statements in the 2015 Form 10-K. 

Fair Value, Notional and Offsetting of Derivative Assets and Liabilities

	Derivative Assets at June 30, 2016
	Fair Value								Notional
	Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
	(dollars in millions)
Derivatives designated as accounting hedges:
Interest rate contracts	$	3,325	$	3,798	$	—	$	7,123	$	34,003	$	58,245	$	—	$	92,248
Foreign exchange contracts		88		—		—		88		2,795		59		—		2,854
Total derivatives designated as accounting hedges		3,413		3,798		—		7,211		36,798		58,304		—		95,102
Derivatives not designated as accounting hedges(1):
Interest rate contracts		287,757		168,366		328		456,451		3,940,102		6,615,199		1,636,768		12,192,069
Credit contracts		13,734		2,727		—		16,461		434,478		133,037		—		567,515
Foreign exchange contracts		75,891		386		140		76,417		1,851,368		16,653		21,279		1,889,300
Equity contracts		22,043		—		20,486		42,529		341,039		—		259,453		600,492
Commodity contracts		11,785		—		3,724		15,509		72,700		—		83,156		155,856
Other		16		—		—		16		1,135		—		—		1,135
Total derivatives not designated as accounting hedges		411,226		171,479		24,678		607,383		6,640,822		6,764,889		2,000,656		15,406,367
Total gross derivatives(2)	$	414,639	$	175,277	$	24,678	$	614,594	$	6,677,620	$	6,823,193	$	2,000,656	$	15,501,469
Amounts offset:
Counterparty netting		(321,553)		(173,222)		(21,214)		(515,989)
Cash collateral netting		(60,352)		(95)		—		(60,447)
Total derivative assets at fair value included in Trading assets	$	32,734	$	1,960	$	3,464	$	38,158
Amounts not offset(3):
Financial instruments collateral		(12,011)		—		—		(12,011)
Other cash collateral		(23)		—		—		(23)
Net exposure	$	20,700	$	1,960	$	3,464	$	26,124

27

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Derivative Liabilities at June 30, 2016
	Fair Value												Notional
	Bilateral OTC			Cleared OTC			Exchange Traded			Total			Bilateral OTC		Cleared OTC		Exchange Traded		Total
	(dollars in millions)
Derivatives designated as accounting hedges:
Interest rate contracts	$	—		$	—		$	—		$	—		$	—	$	32	$	—	$	32
Foreign exchange contracts	$	492		$	23		$	—		$	515		$	8,348	$	689	$	—	$	9,037
Total derivatives designated as accounting hedges		492			23			—			515			8,348		721		—		9,069
Derivatives not designated as accounting hedges(1):
Interest rate contracts		265,270			172,084			412			437,766			3,654,941		6,558,339		760,822		10,974,102
Credit contracts		14,888			2,933			—			17,821			489,656		115,979		—		605,635
Foreign exchange contracts		77,614			414			82			78,110			1,837,572		15,817		10,511		1,863,900
Equity contracts		25,633			—			20,916			46,549			342,625		—		261,986		604,611
Commodity contracts		9,390			—			3,389			12,779			68,095		—		64,896		132,991
Other		102			—			—			102			4,817		—		—		4,817
Total derivatives not designated as accounting hedges		392,897			175,431			24,799			593,127			6,397,706		6,690,135		1,098,215		14,186,056
Total gross derivatives(2)	$	393,389		$	175,454		$	24,799		$	593,642		$	6,406,054	$	6,690,856	$	1,098,215	$	14,195,125
Amounts offset:
Counterparty netting		(321,553)			(173,222	)		(21,214	)		(515,989	)
Cash collateral netting		(38,378)			(1,952	)		—			(40,330	)
Total derivative liabilities at fair value included in Trading liabilities	$	33,458		$	280		$	3,585		$	37,323
Amounts not offset(3):
Financial instruments collateral		(11,509)			—			(514	)		(12,023	)
Other cash collateral		(10)			(41	)		—			(51	)
Net exposure	$	21,939		$	239		$	3,071		$	25,249
	Derivative Assets at December 31, 2015
	Fair Value												Notional
	Bilateral OTC			Cleared OTC			Exchange Traded			Total			Bilateral OTC		Cleared OTC		Exchange Traded		Total
	(dollars in millions)
Derivatives designated as accounting hedges:
Interest rate contracts	$	2,825		$	1,442		$	—		$	4,267		$	36,999	$	35,362	$	—	$	72,361
Foreign exchange contracts		166			1			—			167			5,996		167		—		6,163
Total derivatives designated as accounting hedges		2,991			1,443			—			4,434			42,995		35,529		—		78,524
Derivatives not designated as accounting hedges(4):
Interest rate contracts		220,289			101,276			212			321,777			4,348,002		5,748,525		1,218,645		11,315,172
Credit contracts		19,310			3,609			—			22,919			585,731		139,301		—		725,032
Foreign exchange contracts		64,438			295			55			64,788			1,907,290		13,402		7,715		1,928,407
Equity contracts		20,212			—			20,077			40,289			316,770		—		229,859		546,629
Commodity contracts		13,114			—			4,038			17,152			67,449		—		82,313		149,762
Other		219			—			—			219			5,684		—		—		5,684
Total derivatives not designated as accounting hedges		337,582			105,180			24,382			467,144			7,230,926		5,901,228		1,538,532		14,670,686
Total gross derivatives(2)	$	340,573		$	106,623		$	24,382		$	471,578		$	7,273,921	$	5,936,757	$	1,538,532	$	14,749,210
Amounts offset:
Counterparty netting		(265,707	)		(104,294	)		(21,592	)		(391,593	)
Cash collateral netting		(50,335	)		(1,037	)		—			(51,372	)
Total derivative assets at fair value included in Trading assets	$	24,531		$	1,292		$	2,790		$	28,613
Amounts not offset(3):
Financial instruments collateral		(9,190	)		—			—			(9,190	)
Other cash collateral		(9	)		—			—			(9	)
Net exposure	$	15,332		$	1,292		$	2,790		$	19,414

28

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Derivative Liabilities at December 31, 2015
	Fair Value											Notional
	Bilateral OTC		Cleared OTC			Exchange Traded			Total			Bilateral OTC		Cleared OTC		Exchange Traded		Total
	(dollars in millions)
Derivatives designated as accounting hedges:
Interest rate contracts	$	20	$	250		$	—		$	270		$	3,560	$	9,869	$	—	$	13,429
Foreign exchange contracts		56		6			—			62			4,604		455		—		5,059
Total derivatives designated as accounting hedges		76		256			—			332			8,164		10,324		—		18,488
Derivatives not designated as accounting hedges(4):
Interest rate contracts		203,004		103,852			283			307,139			4,030,039		5,682,322		1,077,710		10,790,071
Credit contracts		19,942		3,723			—			23,665			562,027		131,388		—		693,415
Foreign exchange contracts		65,034		232			22			65,288			1,868,015		13,322		2,655		1,883,992
Equity contracts		25,708		—			20,424			46,132			332,734		—		229,266		562,000
Commodity contracts		10,864		—			3,887			14,751			59,169		—		62,974		122,143
Other		43		—			—			43			4,114		—		—		4,114
Total derivatives not designated as accounting hedges		324,595		107,807			24,616			457,018			6,856,098		5,827,032		1,372,605		14,055,735
Total gross derivatives(2)	$	324,671	$	108,063		$	24,616		$	457,350		$	6,864,262	$	5,837,356	$	1,372,605	$	14,074,223
Amounts offset:
Counterparty netting		(265,707)		(104,294	)		(21,592	)		(391,593	)
Cash collateral netting		(33,332)		(2,951	)		—			(36,283	)
Total derivative liabilities at fair value included in Trading liabilities	$	25,632	$	818		$	3,024		$	29,474
Amounts not offset(3):
Financial instruments collateral		(5,384)		—			(405	)		(5,789	)
Other cash collateral		(5)		—			—			(5	)
Net exposure	$	20,243	$	818		$	2,619		$	23,680

OTC—Over-the-counter

(1) Notional amounts include gross notionals related to open long and short futures contracts of $1,300.0 billion and $372.8 billion, respectively. The unsettled fair value on these futures contracts (excluded from this table) of $1,631 million and $153 million is included in Customer and other receivables and Customer and other payables, respectively, in the consolidated balance sheets.

(2) Amounts include transactions which are either not subject to master netting agreements or collateral agreements or are subject to such agreements but the Firm has not determined the agreements to be legally enforceable as follows: $4.8 billion of derivative assets and $6.3 billion of derivative liabilities at June 30, 2016, and $4.2 billion of derivative assets and $5.2 billion of derivative liabilities at December 31, 2015.

(3) Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

(4) Notional amounts include gross notionals related to open long and short futures contracts of $1,009.5 billion and $653.0 billion, respectively. The unsettled fair value on these futures contracts (excluded from this table) of $1,145 million and $437 million is included in Customer and other receivables and Customer and other payables, respectively, in the consolidated balance sheets.

For information related to offsetting of certain collateralized transactions, see Note 6.

Gains (Losses) on Fair Value Hedges

	Gains (Losses) Recognized in Interest Expense
	Three Months Ended June 30,				Six Months Ended June 30,
Product Type	2016		2015		2016		2015
	(dollars in millions)
Derivatives	$	969	$	(1,899)	$	3,119	$	(1,141)
Borrowings		(993)		1,861		(3,282)		1,018
Total	$	(24)	$	(38)	$	(163)	$	(123)

Gains (Losses) on Derivatives Designated as Net Investment Hedges

	Gains (Losses) Recognized in OCI (effective portion)
	Three Months Ended June 30,				Six Months Ended June 30,
Product Type	2016		2015		2016		2015
	(dollars in millions)
Foreign exchange contracts(1)	$	(112)	$	(81)	$	(336)	$	181

___________

(1) Losses of $19 million and $39 million related to the forward points on the hedging instruments were excluded from hedge effectiveness testing and recognized in Interest income during the current quarter and current year period, respectively. Losses of $36 million and $80 million related to the forward points on the hedging instruments were excluded from hedge effectiveness testing and recognized in Interest income during the prior year quarter and prior year period, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Gains (Losses) on Trading Instruments

The following table summarizes gains and losses included in Trading revenues in the consolidated statements of income from trading activities. These activities include revenues related to derivative and non-derivative financial instruments. The Firm generally utilizes financial instruments across a variety of product types in connection with their market-making and related risk management strategies. Accordingly, the trading revenues presented in the following table are not representative of the manner in which the Firm manages its business activities and are prepared in a manner similar to the presentation of trading revenues for regulatory reporting purposes.

	Gains (Losses) Recognized in Trading Revenues
	Three Months Ended June 30,				Six Months Ended June 30,
Product Type	2016		2015		2016			2015
	(dollars in millions)
Interest rate contracts	$	320	$	355	$	626		$	925
Foreign exchange contracts		362		170		599			515
Equity security and index contracts(1)		1,615		1,746		2,945			3,341
Commodity and other contracts(2)		20		140		(124	)		816
Credit contracts		429		380		765			719
Subtotal	$	2,746	$	2,791	$	4,811		$	6,316
Debt valuation adjustments(3)		—		182		—			307
Total trading revenue	$	2,746	$	2,973	$	4,811		$	6,623

(1) Dividend income is included within equity security and index contracts.

(2) Other contracts represent contracts not reported as interest rate, foreign exchange, equity security and index or credit contracts.

(3) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains (losses) in the current quarter and current year period are recorded within OCI in the consolidated statements of comprehensive income. In the prior year quarter and prior year period, the DVA gains (losses) were recorded within Trading revenues in the consolidated statements of income. See Notes 2 and 14 for further information.

OTC Derivative Products—Trading Assets

Counterparty Credit Rating and Remaining Maturity of OTC Derivative Assets

	Fair Value at June 30, 2016(1)
	Contractual Years to Maturity								Cross-Maturity and Cash Collateral Netting(3)		Net Exposure Post-cash Collateral		Net Exposure Post- collateral(4)
Credit Rating(2)	Less than 1		1 - 3		3 - 5		Over 5
	(dollars in millions)
AAA	$	137	$	396	$	1,312	$	4,360	$	(4,953)	$	1,252	$	1,175
AA		3,156		1,502		1,814		12,226		(12,717)		5,981		3,771
A		11,078		7,607		5,336		28,058		(38,694)		13,385		7,784
BBB		5,794		4,489		2,622		15,861		(19,993)		8,773		6,808
Non-investment grade		3,923		2,505		996		5,370		(7,514)		5,280		3,122
Total	$	24,088	$	16,499	$	12,080	$	65,875	$	(83,871)	$	34,671	$	22,660

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Fair Value at December 31, 2015(1)
	Contractual Years to Maturity								Cross-Maturity and Cash Collateral Netting(3)		Net Exposure  Post-cash Collateral		Net Exposure  Post- collateral(4)
Credit Rating(2)	Less than 1		1-3		3-5		Over 5
	(dollars in millions)
AAA	$	203	$	453	$	827	$	3,665	$	(4,319)	$	829	$	715
AA		2,689		2,000		1,876		9,223		(10,981)		4,807		2,361
A		9,748		8,191		4,774		20,918		(34,916)		8,715		5,448
BBB		3,614		4,863		1,948		11,801		(15,086)		7,140		4,934
Non-investment grade		3,982		2,333		1,157		3,567		(6,716)		4,323		3,166
Total	$	20,236	$	17,840	$	10,582	$	49,174	$	(72,018)	$	25,814	$	16,624

(1) Fair values shown represent the Firm’s net exposure to counterparties related to its OTC derivative products.

(2) Obligor credit ratings are determined by the Credit Risk Management Department.

(3) Amounts represent the netting of receivable balances with payable balances for the same counterparty across maturity categories. Receivable and payable balances with the same counterparty in the same maturity category are netted within such maturity category, where appropriate. Cash collateral received is netted on a counterparty basis, provided legal right of offset exists.

(4) Fair value is shown, net of collateral received (primarily cash and U.S. government and agency securities).

Credit Risk-Related Contingencies

In connection with certain OTC trading agreements, the Firm may be required to provide additional collateral or immediately settle any outstanding liability balances with certain counterparties in the event of a credit rating downgrade of the Firm.

Net Derivative Liabilities and Collateral Posted

The following table presents the aggregate fair value of certain derivative contracts that contain credit risk-related contingent features that are in a net liability position for which the Firm has posted collateral in the normal course of business.

	At June 30, 2016
	(dollars in millions)
Net derivative liabilities	$	28,999
Collateral posted		24,217

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services (“S&P”). The following table shows the future potential collateral amounts and

termination payments that could be called or required by counterparties or exchange and clearing organizations in the event of one-notch or two-notch downgrade scenarios based on the relevant contractual downgrade triggers.

Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade

	At June 30, 2016(1)
	(dollars in millions)
One-notch downgrade	$	1,075
Two-notch downgrade		1,233

__________________

(1) Amounts include $1,481 million related to bilateral arrangements between the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firm to manage the risk of counterparty downgrades.

Credit Derivatives and Other Credit Contracts

The Firm enters into credit derivatives, principally through credit default swaps, under which it receives or provides protection against the risk of default on a set of debt obligations issued by a specified reference entity or entities. A majority of the Firm’s counterparties are banks, broker-dealers and insurance and other financial institutions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Notional and Fair Value of Protection Sold and Protection Purchased through Credit Default Swaps

	At June 30, 2016
	Protection Sold					Protection Purchased
	Notional		Fair Value     (Asset)/Liability			Notional		Fair Value     (Asset)/Liability
	(dollars in millions)
Single name credit default swaps	$	347,624	$	463		$	338,727	$	(453	)
Index and basket credit default swaps		176,009		726			143,734		(771	)
Tranched index and basket credit default swaps		43,657		(793	)		123,399		2,188
Total	$	567,290	$	396		$	605,860	$	964

	At December 31, 2015
	Protection Sold					Protection Purchased
	Notional		Fair Value     (Asset)/Liability			Notional		Fair Value     (Asset)/Liability
	(dollars in millions)
Single name credit default swaps	$	420,806	$	1,980		$	405,361	$	(2,079	)
Index and basket credit default swaps		199,688		(102	)		173,936		(82	)
Tranched index and basket credit default swaps		69,025		(1,093	)		149,631		2,122
Total	$	689,519	$	785		$	728,928	$	(39	)

Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold

	At June 30, 2016
	Maximum Potential Payout/Notional										Fair Value     (Asset)/     Liability(1)
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
Single name credit default swaps(2):
Investment grade	$	92,734	$	94,348	$	48,928	$	11,097	$	247,107	$	(1,079	)
Non-investment grade		42,370		38,348		18,381		1,418		100,517		1,542
Total	$	135,104	$	132,696	$	67,309	$	12,515	$	347,624	$	463
Index and basket credit default swaps(2):
Investment grade	$	24,110	$	39,948	$	42,887	$	4,060	$	111,005	$	(1,222	)
Non-investment grade		51,914		28,315		13,761		14,671		108,661		1,155
Total	$	76,024	$	68,263	$	56,648	$	18,731	$	219,666	$	(67	)
Total credit default swaps sold	$	211,128	$	200,959	$	123,957	$	31,246	$	567,290	$	396
Other credit contracts		43		25		—		276		344		(17	)
Total credit derivatives and other credit contracts	$	211,171	$	200,984	$	123,957	$	31,522	$	567,634	$	379

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	At December 31, 2015
	Maximum Potential Payout/Notional										Fair Value (Asset)/ Liability(1)
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
Single name credit default swaps(2):
Investment grade	$	84,543	$	138,467	$	63,754	$	12,906	$	299,670	$	(1,831)
Non-investment grade		38,054		56,261		24,432		2,389		121,136		3,811
Total	$	122,597	$	194,728	$	88,186	$	15,295	$	420,806	$	1,980
Index and basket credit default swaps(2):
Investment grade	$	33,507	$	59,403	$	45,505	$	5,327	$	143,742	$	(1,977)
Non-investment grade		52,590		43,899		15,480		13,002		124,971		782
Total	$	86,097	$	103,302	$	60,985	$	18,329	$	268,713	$	(1,195)
Total credit default swaps sold	$	208,694	$	298,030	$	149,171	$	33,624	$	689,519	$	785
Other credit contracts		19		107		2		332		460		(24)
Total credit derivatives and other credit contracts	$	208,713	$	298,137	$	149,173	$	33,956	$	689,979	$	761

(1) Fair value amounts are shown on a gross basis prior to cash collateral or counterparty netting.

(2) In order to provide an indication of the current payment status or performance risk of the CDS, a breakdown of CDS based on the Firm’s internal credit ratings by investment grade and non-investment grade is provided. Internal credit ratings serve as the Credit Risk Management Department’s assessment of credit risk, and the basis for a comprehensive credit limits framework used to control credit risk. The Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor. Internal ratings procedures, methodologies, and models are all independently and formally governed, and models and methodologies are reviewed by a separate model risk management oversight function.

Purchased Credit Protection with Identical Underlying Reference Obligations

For single name and non-tranched index and basket credit default swaps, the Firm has purchased protection with a notional amount of approximately $480.1 billion and $577.7 billion at June 30, 2016 and December 31, 2015, respectively, compared with a notional amount of approximately

$521.9 billion and $619.5 billion (included in the previous tables) at June 30, 2016 and December 31, 2015, respectively, of credit protection sold with identical underlying reference obligations.

For further information on credit derivatives and other credit contracts, see Note 4 to the consolidated financial statements in the 2015 Form 10-K.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

5. Investment Securities

The following tables present information about the Firm’s AFS securities, which are carried at fair value, and HTM securities, which are carried at amortized cost. The net unrealized gains or losses on AFS securities are reported on an after-tax basis as a component of AOCI.

AFS and HTM Securities

	At June 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
AFS debt securities:
U.S. government and agency securities:
U.S. Treasury securities	$	29,923	$	213	$	8	$	30,128
U.S. agency securities(1)		23,221		208		22		23,407
Total U.S. government and agency securities		53,144		421		30		53,535
Corporate and other debt:
Commercial mortgage-backed securities:
Agency		2,139		5		31		2,113
Non-agency		2,159		36		10		2,185
Auto loan asset-backed securities		2,071		7		—		2,078
Corporate bonds		4,009		66		2		4,073
Collateralized loan obligations		502		—		7		495
FFELP student loan asset-backed securities(2)		3,345		—		105		3,240
Total corporate and other debt		14,225		114		155		14,184
Total AFS debt securities		67,369		535		185		67,719
AFS equity securities		15		—		8		7
Total AFS securities		67,384		535		193		67,726
HTM securities:
U.S. government securities:
U.S. Treasury securities		3,705		53		—		3,758
U.S. agency securities(1)		8,713		96		—		8,809
Total HTM securities		12,418		149		—		12,567
Total Investment securities	$	79,802	$	684	$	193	$	80,293

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	At December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
AFS debt securities:
U.S. government and agency securities:
U.S. Treasury securities	$	31,555	$	5	$	143	$	31,417
U.S. agency securities(1)		21,103		29		156		20,976
Total U.S. government and agency securities		52,658		34		299		52,393
Corporate and other debt:
Commercial mortgage-backed securities:
Agency		1,906		1		60		1,847
Non-agency		2,220		3		25		2,198
Auto loan asset-backed securities		2,556		—		9		2,547
Corporate bonds		3,780		5		30		3,755
Collateralized loan obligations		502		—		7		495
FFELP student loan asset-backed securities(2)		3,632		—		115		3,517
Total corporate and other debt		14,596		9		246		14,359
Total AFS debt securities		67,254		43		545		66,752
AFS equity securities		15		—		8		7
Total AFS securities		67,269		43		553		66,759
HTM securities:
U.S. government securities:
U.S. Treasury securities		1,001		—		3		998
U.S. agency securities(1)		4,223		1		34		4,190
Total HTM securities		5,224		1		37		5,188
Total Investment securities	$	72,493	$	44	$	590	$	71,947

(1) U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and collateralized mortgage obligations.

(2) FFELP—Federal Family Education Loan Program. Amounts are backed by a guarantee from the U.S. Department of Education of at least 95% of the principal balance and interest on such loans.

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Investment Securities in an Unrealized Loss Position

	At June 30, 2016
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(dollars in millions)
AFS debt securities:
U.S. government and agency securities:
U.S. Treasury securities	$	3,028	$	8	$	—	$	—	$	3,028	$	8
U.S. agency securities		5,731		10		1,225		12		6,956		22
Total U.S. government and agency securities		8,759		18		1,225		12		9,984		30
Corporate and other debt:
Commercial mortgage-backed securities:
Agency		31		—		1,181		31		1,212		31
Non-agency		216		—		625		10		841		10
Auto loan asset-backed securities		83		—		204		—		287		—
Corporate bonds		172		1		175		1		347		2
Collateralized loan obligations		—		—		494		7		494		7
FFELP student loan asset-backed securities		583		12		2,637		93		3,220		105
Total corporate and other debt		1,085		13		5,316		142		6,401		155
Total AFS debt securities		9,844		31		6,541		154		16,385		185
AFS equity securities		7		8		—		—		7		8
Total AFS securities		9,851		39		6,541		154		16,392		193
HTM securities:
U.S. government and agency securities:
U.S. agency securities		72		—		—		—		72		—
Total HTM securities		72		—		—		—		72		—
Total Investment securities	$	9,923	$	39	$	6,541	$	154	$	16,464	$	193

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	At December 31, 2015
	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(dollars in millions)
AFS debt securities:
U.S. government and agency securities:
U.S. Treasury securities	$	25,994	$	126	$	2,177	$	17	$	28,171	$	143
U.S. agency securities		14,242		135		639		21		14,881		156
Total U.S. government and agency securities		40,236		261		2,816		38		43,052		299
Corporate and other debt:
Commercial mortgage-backed securities:
Agency		1,185		44		422		16		1,607		60
Non-agency		1,479		21		305		4		1,784		25
Auto loan asset-backed securities		1,644		7		881		2		2,525		9
Corporate bonds		2,149		19		525		11		2,674		30
Collateralized loan obligations		352		5		143		2		495		7
FFELP student loan asset-backed securities		2,558		79		929		36		3,487		115
Total corporate and other debt		9,367		175		3,205		71		12,572		246
Total AFS debt securities		49,603		436		6,021		109		55,624		545
AFS equity securities		7		8		—		—		7		8
Total AFS securities		49,610		444		6,021		109		55,631		553
HTM securities:
U.S. government and agency securities:
U.S. Treasury securities		898		3		—		—		898		3
U.S. agency securities		3,677		34		—		—		3,677		34
Total HTM securities		4,575		37		—		—		4,575		37
Total Investment securities	$	54,185	$	481	$	6,021	$	109	$	60,206	$	590

As discussed in Note 2 to the consolidated financial statements in the 2015 Form 10-K, AFS and HTM securities with a current fair value less than their amortized cost are analyzed as part of the Firm’s ongoing assessment of temporary versus other-than-temporarily impaired at the individual security level.

The Firm believes there are no securities in an unrealized loss position that are other-than-temporarily-impaired at June 30, 2016 and December 31, 2015 for the reasons discussed herein.

For AFS debt securities, the Firm does not intend to sell the securities and is not likely to be required to sell the securities prior to recovery of amortized cost basis. For AFS and HTM debt securities, the securities have not experienced credit losses as the net unrealized losses reported in the previous table are primarily due to higher interest rates since those securities were purchased. Additionally, the Firm does not expect to experience a credit loss based on consideration of the relevant information (as discussed in Note 2

to the consolidated financial statements in the 2015 Form 10-K), including for U.S. government and agency securities, the existence of an explicit and implicit guarantee provided by the U.S. government. The risk of credit loss on securities in an unrealized loss position is considered minimal because all of the Firm’s agency securities as well as asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”) and collateralized loan obligations (“CLOs”) are highly rated and because corporate bonds are all investment grade.

For AFS equity securities, the Firm has the intent and ability to hold these securities for a period of time sufficient to allow for any anticipated recovery in market value.

See Note 12 for additional information on securities issued by VIEs, including U.S. agency mortgage-backed securities, non-agency CMBS, auto loan ABS, CLO and FFELP student loan ABS.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Amortized Cost, Fair Value and Annualized Average Yield of Investment Securities by Contractual Maturity Dates

	At June 30, 2016
	Amortized Cost		Fair Value		Annualized  Average Yield
	(dollars in millions)
AFS debt securities:
U.S. government and agency securities:
U.S. Treasury securities:
Due within 1 year	$	2,698	$	2,702		0.7%
After 1 year through 5 years		22,137		22,317		1.0%
After 5 years through 10 years		5,088		5,109		1.4%
Total		29,923		30,128
U.S. agency securities:
Due within 1 year		200		200		0.7%
After 1 year through 5 years		2,629		2,632		0.5%
After 5 years through 10 years		1,327		1,357		1.9%
After 10 years		19,065		19,218		1.6%
Total		23,221		23,407
Total U.S. government and agency securities		53,144		53,535		1.2%
Corporate and other debt:
Commercial mortgage-backed securities:
Agency:
Due within 1 year		73		74		0.8%
After 1 year through 5 years		404		406		1.0%
After 5 years through 10 years		639		641		1.3%
After 10 years		1,023		992		1.6%
Total		2,139		2,113
Non-agency:
After 10 years		2,159		2,185		1.9%
Total		2,159		2,185
Auto loan asset-backed securities:
Due within 1 year		4		4		0.9%
After 1 year through 5 years		1,902		1,909		1.3%
After 5 years through 10 years		165		165		1.6%
Total		2,071		2,078
Corporate bonds:
Due within 1 year		638		640		1.3%
After 1 year through 5 years		2,655		2,695		1.8%
After 5 years through 10 years		716		738		2.6%
Total		4,009		4,073
Collateralized loan obligations:
After 5 years through 10 years		502		495		1.5%
Total		502		495

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	At June 30, 2016
	Amortized Cost		Fair Value		Annualized Average Yield
	(dollars in millions)
FFELP student loan asset-backed securities:
After 1 year through 5 years		59		59		0.6%
After 5 years through 10 years		922		897		0.9%
After 10 years		2,364		2,284		0.9%
Total		3,345		3,240
Total corporate and other debt		14,225		14,184		1.5%
Total AFS debt securities		67,369		67,719		1.3%
AFS equity securities		15		7		— %
Total AFS securities		67,384		67,726		1.3%
HTM securities:
U.S. government securities:
U.S. Treasury securities:
Due within 1 year		200		201		0.7%
After 1 year through 5 years		1,408		1,422		1.1%
After 5 years through 10 years		1,693		1,719		1.7%
After 10 years		404		416		2.5%
Total		3,705		3,758
U.S. agency securities:
After 10 years		8,713		8,809		2.0%
Total		8,713		8,809
Total HTM securities		12,418		12,567		1.8%
Total Investment securities	$	79,802	$	80,293		1.4%

Gross Realized Gains and Gross Realized (Losses) on Sales of AFS Securities

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions)
Gross realized gains	$	71	$	40	$	85	$	69
Gross realized (losses)		(1)		(10)		(3)		(14)
Total	$	70	$	30	$	82	$	55

Gross realized gains and losses are recognized in Other revenues in the consolidated statements of income.

39

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

6. Collateralized Transactions

The Firm enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. For further discussion of the Firm’s collateralized transactions, see Note 6 to the consolidated financial statements in the 2015 Form 10-K.

Offsetting of Certain Collateralized Transactions

	At June 30, 2016
	Gross Amounts(1)		Amounts Offset		Net Amounts Presented		Amounts Not Offset(2)		Net Exposure
	(dollars in millions)
Assets
Securities purchased under agreements to resell	$	162,813	$	(65,224)	$	97,589	$	(91,746)	$	5,843
Securities borrowed		138,436		(7,155)		131,281		(124,773)		6,508
Liabilities
Securities sold under agreements to repurchase	$	115,552	$	(65,224)	$	50,328	$	(42,541)	$	7,787
Securities loaned		24,396		(7,155)		17,241		(16,724)		517
	At December 31, 2015
	Gross Amounts(1)		Amounts Offset		Net Amounts Presented		Amounts Not Offset(2)		Net Exposure
	(dollars in millions)
Assets
Securities purchased under agreements to resell	$	135,714	$	(48,057)	$	87,657	$	(84,752)	$	2,905
Securities borrowed		147,445		(5,029)		142,416		(134,250)		8,166
Liabilities
Securities sold under agreements to repurchase	$	84,749	$	(48,057)	$	36,692	$	(31,604)	$	5,088
Securities loaned		24,387		(5,029)		19,358		(18,881)		477

(1) Amounts include transactions which are either not subject to master netting agreements or are subject to such agreements but the Firm has not determined the agreements to be legally enforceable as follows: $5.5 billion of Securities purchased under agreements to resell, $3.7 billion of Securities borrowed, $7.2 billion of Securities sold under agreements to repurchase and $0.4 billion of Securities loaned at June 30, 2016, and $2.6 billion of Securities purchased under agreements to resell, $3.0 billion of Securities borrowed and $4.9 billion of Securities sold under agreements to repurchase at December 31, 2015.

(2) Amounts relate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

For information related to offsetting of derivatives, see Note 4.

40

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Secured Financing Transactions—Maturities and Collateral Pledged

Gross Secured Financing Balances by Remaining Contractual Maturity

	At June 30, 2016
	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
	(dollars in millions)
Securities sold under agreements to repurchase(1)	$	38,732	$	30,586	$	20,309	$	25,925	$	115,552
Securities loaned(1)		13,085		50		1,336		9,925		24,396
Gross amount of secured financing included in the offsetting disclosure	$	51,817	$	30,636	$	21,645	$	35,850	$	139,948
Obligation to return securities received as collateral		18,738		—		—		—		18,738
Total	$	70,555	$	30,636	$	21,645	$	35,850	$	158,686
	At December 31, 2015
	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
	(dollars in millions)
Securities sold under agreements to repurchase(1)	$	20,410	$	25,245	$	13,221	$	25,873	$	84,749
Securities loaned(1)		12,247		478		2,156		9,506		24,387
Gross amount of secured financing included in the offsetting disclosure	$	32,657	$	25,723	$	15,377	$	35,379	$	109,136
Obligation to return securities received as collateral		19,316		—		—		—		19,316
Total	$	51,973	$	25,723	$	15,377	$	35,379	$	128,452

(1) Amounts are presented on a gross basis, prior to netting in the consolidated balance sheets.

41

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Gross Secured Financing Balances by Class of Collateral Pledged

	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Securities sold under agreements to repurchase(1)
U.S. government and agency securities	$	39,920	$	36,609
State and municipal securities		2,104		173
Other sovereign government obligations		42,329		24,820
Asset-backed securities		745		441
Corporate and other debt		8,638		4,020
Corporate equities		21,515		18,473
Other		301		213
Total securities sold under agreements to repurchase	$	115,552	$	84,749
Securities loaned(1)
U.S. government and agency securities	$	182	$	—
Other sovereign government obligations		7,454		7,336
Corporate and other debt		123		71
Corporate equities		16,602		16,972
Other		35		8
Total securities loaned	$	24,396	$	24,387
Gross amount of secured financing included in the offsetting disclosure	$	139,948	$	109,136
Obligation to return securities received as collateral
Corporate and other debt		—		3
Corporate equities		18,737		19,313
Other		1		—
Total obligation to return securities received as collateral	$	18,738	$	19,316
Total	$	158,686	$	128,452

(1) Amounts are presented on a gross basis, prior to netting in the consolidated balance sheets.

Trading Assets Pledged

The Firm pledges its trading assets to collateralize repurchase agreements and other secured financings. Pledged financial instruments that can be sold or repledged by the secured party are identified as Trading assets (pledged to various parties) in the consolidated balance sheets. At June 30, 2016 and December 31, 2015, the carrying value of Trading assets that have been loaned or pledged to counterparties, where those counterparties do not have the right to sell or repledge the collateral, were $41.1 billion and $35.0 billion, respectively.

Collateral Received

The Firm receives collateral in the form of securities in connection with reverse repurchase agreements, securities borrowed and derivative transactions, customer margin loans and securities-based lending. In many cases, the Firm is permitted to sell or repledge these securities held as collateral and use the securities to secure repurchase agreements, to enter into securities lending and derivative transactions or for delivery to counterparties to cover short

positions. The Firm additionally receives securities as collateral in connection with certain securities-for-securities transactions in which it is the lender. In instances where the Firm is permitted to sell or repledge these securities, it reports the fair value of the collateral received and the related obligation to return the collateral included in Trading assets and Trading liabilities, respectively, in its consolidated balance sheets. At June 30, 2016 and December 31, 2015, the total fair value of financial instruments received as collateral where the Firm is permitted to sell or repledge the securities was $528.0 billion and $522.6 billion, respectively, and the fair value of the portion that had been sold or repledged was $407.0 billion and $398.1 billion, respectively.

Other

The Firm also engages in margin lending to clients that allows the client to borrow against the value of qualifying securities and is included within Customer and other receivables in the consolidated balance sheets. Under these agreements and transactions, the Firm receives collateral,

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

including U.S. government and agency securities, other sovereign government obligations, corporate and other debt, and corporate equities. Customer receivables generated from margin lending activities are collateralized by customer-owned securities held by the Firm. The Firm monitors required margin levels and established credit terms daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or reduce positions, when necessary. At June 30, 2016 and December 31, 2015,

the amounts related to margin lending were approximately $23.2 billion and $25.3 billion, respectively.

For a further discussion of the Firm’s margin lending activities, see Note 6 to the consolidated financial statements in the 2015 Form 10-K.

The Firm has additional secured liabilities. For further discussion of other secured financings, see Note 10.

Cash and Securities Deposited with Clearing Organizations or Segregated

	At June 30, 2016		At   December 31, 2015
	(dollars in millions)
Securities(1)	$	23,710	$	14,390
Other assets—Cash deposited with clearing organizations or segregated under federal and other regulations or requirements		32,771		31,469
Total	$	56,481	$	45,859

(1) Securities deposited with clearing organizations or segregated under federal and other regulations or requirements are sourced from Securities purchased under agreements to resell and Trading assets in the consolidated balance sheets.

7. Loans and Allowance for Credit Losses

Loans

The Firm’s loans held for investment are recorded at amortized cost, and its loans held for sale are recorded at the lower of cost or fair value in the consolidated balance sheets. For a further description of these loans, refer to Note 7 to the consolidated financial statements in the 2015 Form 10-K. See Note 3 for further information regarding Loans and lending commitments held at fair value.

Loans Held for Investment and Held for Sale

	At June 30, 2016						At December 31, 2015
Loans by Product Type	Loans Held for  Investment		Loans Held for Sale		Total   Loans(1)(2)		Loans Held for  Investment		Loans Held for Sale		Total Loans(1)(2)
	(dollars in millions)
Corporate loans	$	24,186	$	14,448	$	38,634	$	23,554	$	11,924	$	35,478
Consumer loans		23,337		—		23,337		21,528		—		21,528
Residential real estate loans		22,668		84		22,752		20,863		104		20,967
Wholesale real estate loans		7,415		1,350		8,765		6,839		1,172		8,011
Total loans, gross of allowance for loan losses		77,606		15,882		93,488		72,784		13,200		85,984
Allowance for loan losses		(323)		—		(323)		(225)		—		(225)
Total loans, net of allowance for loan losses	$	77,283	$	15,882	$	93,165	$	72,559	$	13,200	$	85,759

(1) Amounts include loans that are made to non-U.S. borrowers of $8,104 million and $9,789 million at June 30, 2016 and December 31, 2015, respectively.

(2) Loans at fixed interest rates and floating or adjustable interest rates were $10,102 million and $83,063 million, respectively, at June 30, 2016 and $8,471 million and $77,288 million, respectively, at December 31, 2015.

43

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Credit Quality

For a further discussion about the Firm’s evaluation of credit transactions and monitoring and credit quality indicators, see Note 7 to the consolidated financial statements in the 2015 Form 10-K.

Credit Quality Indicators for Loans Held for Investment, Gross of Allowance for Loan Losses, by Product Type

	At June 30, 2016
	Corporate		Consumer		Residential   Real Estate		Wholesale   Real Estate		Total
	(dollars in millions)
Pass	$	22,183	$	23,337	$	22,627	$	7,191	$	75,338
Special mention		539		—		—		224		763
Substandard		1,308		—		41		—		1,349
Doubtful		156		—		—		—		156
Loss		—		—		—		—		—
Total loans	$	24,186	$	23,337	$	22,668	$	7,415	$	77,606

	At December 31, 2015
	Corporate		Consumer		Residential   Real Estate		Wholesale   Real Estate		Total
	(dollars in millions)
Pass	$	22,040	$	21,528	$	20,828	$	6,839	$	71,235
Special mention		300		—		—		—		300
Substandard		1,202		—		35		—		1,237
Doubtful		12		—		—		—		12
Loss		—		—		—		—		—
Total loans	$	23,554	$	21,528	$	20,863	$	6,839	$	72,784

Allowance for Credit Losses and Impaired Loans

For factors considered by the Firm in determining the allowance for loan losses and impairments, see Notes 2 and 7 to the consolidated financial statements in the 2015 Form 10-K.

Loans by Product Type

	At June 30, 2016						At December 31, 2015
	Corporate		Residential   Real Estate		Total		Corporate		Residential   Real Estate		Total
	(dollars in millions)
Impaired loans with allowance	$	244	$	—	$	244	$	39	$	—	$	39
Impaired loans without allowance(1)		338		30		368		89		17		106
Impaired loans unpaid principal balance(2)		593		32		625		130		19		149
Past due 90 days loans and on nonaccrual		1		20		21		1		21		22

(1) At June 30, 2016 and December 31, 2015, no allowance was outstanding for these loans as the present value of the expected future cash flows (or, alternatively, the observable market price of the loan or the fair value of the collateral held) equaled or exceeded the carrying value.

(2) The impaired loans unpaid principal balance differs from the aggregate amount of impaired loan balances with and without allowance due to various factors, including charge-offs and net deferred loan fees or costs.

44

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Loans by Region

	At June 30, 2016								At December 31, 2015
	Americas		EMEA		Asia-   Pacific		Total		Americas		EMEA		Asia-   Pacific		Total
	(dollars in millions)
Impaired loans	$	589	$	23	$	—	$	612	$	108	$	12	$	25	$	145
Past due 90 days loans and on nonaccrual		21		—		—		21		22		—		—		22
Allowance for loan losses		277		43		3		323		183		34		8		225

EMEA—Europe, Middle East and Africa

Allowance for Credit Losses on Lending Activities

	Corporate		Consumer		Residential   Real Estate		Wholesale   Real Estate		Total
	(dollars in millions)
Allowance for Loan Losses
Balance at December 31, 2015	$	166	$	5	$	17	$	37	$	225
Gross charge-offs		—		—		—		—		—
Gross recoveries		—		—		—		—		—
Net recoveries/(charge-offs)		—		—		—		—		—
Provision for (release of) loan losses(1)		116		(1)		1		12		128
Other(2)		(30)		—		—		—		(30)
Balance at June 30, 2016	$	252	$	4	$	18	$	49	$	323
Allowance for Loan Losses by Impairment Methodology
Inherent	$	147	$	4	$	18	$	49	$	218
Specific		105		—		—		—		105
Total allowance for loan losses at June 30, 2016	$	252	$	4	$	18	$	49	$	323
Loans Evaluated by Impairment Methodology(3)
Inherent	$	23,604	$	23,337	$	22,638	$	7,415	$	76,994
Specific		582		—		30		—		612
Total loans evaluated at June 30, 2016	$	24,186	$	23,337	$	22,668	$	7,415	$	77,606
Allowance for Lending Commitments
Balance at December 31, 2015	$	180	$	1	$	—	$	4	$	185
Provision for lending commitments(4)		1		—		—		2		3
Other		—		(1)		—		—		(1)
Balance at June 30, 2016	$	181	$	—	$	—	$	6	$	187
Allowance for Lending Commitments by Impairment Methodology
Inherent	$	173	$	—	$	—	$	6	$	179
Specific		8		—		—		—		8
Total allowance for lending commitments at June 30, 2016	$	181	$	—	$	—	$	6	$	187
Lending Commitments Evaluated by Impairment Methodology(3)
Inherent	$	63,120	$	5,264	$	327	$	496	$	69,207
Specific		64		—		—		—		64
Total lending commitments evaluated at June 30, 2016	$	63,184	$	5,264	$	327	$	496	$	69,271

45

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Corporate		Consumer		Residential   Real Estate		Wholesale   Real Estate		Total
	(dollars in millions)
Allowance for Loan Losses
Balance at December 31, 2014	$	118	$	2	$	8	$	21	$	149
Gross charge-offs		—		—		(1)		—		(1)
Gross recoveries		1		—		—		—		1
Net recoveries/(charge-offs)		1		—		(1)		—		—
Provision for loan losses(1)		26		—		2		2		30
Other(2)		(10)		—		—		—		(10)
Balance at June 30, 2015	$	135	$	2	$	9	$	23	$	169
Allowance for Loan Losses by Impairment Methodology
Inherent	$	130	$	2	$	9	$	23	$	164
Specific		5		—		—		—		5
Total allowance for loan losses at June 30, 2015	$	135	$	2	$	9	$	23	$	169
Loans Evaluated by Impairment Methodology(3)
Inherent	$	22,479	$	19,464	$	18,214	$	6,388	$	66,545
Specific		21		—		27		—		48
Total loans evaluated at June 30, 2015	$	22,500	$	19,464	$	18,241	$	6,388	$	66,593
Allowance for Lending Commitments
Balance at December 31, 2014	$	147	$	—	$	—	$	2	$	149
Provision for lending commitments(4)		6		—		—		2		8
Balance at June 30, 2015	$	153	$	—	$	—	$	4	$	157
Allowance for Lending Commitments by Impairment Methodology
Inherent	$	153	$	—	$	—	$	4	$	157
Specific		—		—		—		—		—
Total allowance for lending commitments at June 30, 2015	$	153	$	—	$	—	$	4	$	157
Lending Commitments Evaluated by Impairment Methodology(3)
Inherent	$	65,183	$	4,235	$	289	$	623	$	70,330
Specific		—		—		—		—		—
Total lending commitments evaluated at June 30, 2015	$	65,183	$	4,235	$	289	$	623	$	70,330

(1) The Firm recorded provisions of $16 million and $4 million for loan losses for the current quarter and prior year quarter, respectively.

(2) Amount includes the impact related to the transfer to loans held for sale and foreign currency translation adjustments.

(3) Loan balances are gross of the allowance for loan losses, and lending commitments are gross of the allowance for lending commitments.

(4) The Firm recorded a release of $13 million and $29 million for commitments for the current quarter and prior year quarter, respectively.

Troubled Debt Restructurings

At June 30, 2016 and December 31, 2015, the impaired loans and lending commitments within held for investment include TDRs of $137.2 million and $44.0 million related to loans and $18.7 million and $34.8 million related to lending commitments, respectively, within corporate loans. At June 30, 2016 and December 31, 2015, the Firm recorded an allowance of $12.1 million and $5.1 million, respectively, against these TDRs. These restructurings

typically include modifications of interest rates, collateral requirements, other loan covenants, and payment extensions.

Employee Loans

Employee loans are granted primarily in conjunction with a program established in the Wealth Management business segment to retain and recruit certain employees. These loans are recorded in Customer and other receivables in the

46

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

consolidated balance sheets. These loans are full recourse, generally require periodic payments and have repayment terms ranging from 1 to 12 years. The Firm establishes an allowance for loan amounts it does not consider recoverable, which is recorded in Compensation and benefits expense. At June 30, 2016, the Firm had $4,877 million of employee loans, net of an allowance of approximately $100 million. At December 31, 2015, the Firm had $4,923 million of employee loans, net of an allowance of approximately $108 million.

8. Equity Method Investments

Overview

The Firm has investments accounted for under the equity method of accounting (see Note 1 to the consolidated financial statements in the 2015 Form 10-K) of $3,235 million and $3,144 million at June 30, 2016 and December 31, 2015, respectively, included in Other assets—Other investments in the consolidated balance sheets. Income (loss) from equity method investments was $(14) million and $45 million for the current quarter and prior year quarter, respectively and $1 million and $83 million for the current year period and prior year period, respectively, and is included in Other revenues in the consolidated statements of income. In addition, a loss of $35 million was recognized in the current quarter in connection with the sale of solar investments and impairments of the remaining unsold solar investments accounted for under the equity method.

Japanese Securities Joint Venture

Included in the equity method investments is the Firm’s 40% voting interest (“40% interest”) in Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”). Mitsubishi UFJ Financial Group, Inc. (“MUFG”) holds a 60% voting interest. The Firm accounts for its equity

method investment in MUMSS within the Institutional Securities business segment. During the current quarter and prior year quarter, the Firm recorded income from its 40% interest in MUMSS of $23 million and $71 million, respectively, and income of $57 million and $140 million in the current year period and prior year period, respectively, within Other revenues in the consolidated statements of income.

In June 2015, MUMSS paid a dividend of approximately $291 million, of which the Firm received approximately $116 million for its proportionate share of MUMSS.

9. Deposits

Deposits

	At June 30,           2016(1)			At December 31,         2015(1)
		(dollars in millions)
Savings and demand deposits	$		151,014	$	153,346
Time deposits(2)			1,679		2,688
Total(3)	$		152,693	$	156,034

____

(1) Total deposits subject to the FDIC insurance at June 30, 2016 and December 31, 2015 were $110 billion and $113 billion, respectively. Of the total time deposits subject to the FDIC insurance at June 30, 2016 and December 31, 2015, $20 million and $14 million, respectively, met or exceeded the FDIC insurance limit.

(2) Certain time deposit accounts are carried at fair value under the fair value option (see Note 3).

(3) Deposits were primarily held in the U.S.

Interest bearing deposits at June 30, 2016 included $151,008 million of savings deposits payable upon demand and $1,043 million of time deposits maturing in 2016, $578 million of time deposits maturing in 2017 and $11 million of time deposits maturing in 2018.

10. Long-Term Borrowings and Other Secured Financings

Long-Term Borrowings

Components of Long-term Borrowings

	At   June 30, 2016			At   December 31, 2015
		(dollars in millions)
Senior debt	$		149,519	$	140,494
Subordinated debt			11,120		10,404
Junior subordinated debentures			2,853		2,870
Total	$		163,492	$	153,768

During the current year period and prior year period, the Firm issued notes with a principal amount of approximately $20.6 billion and $22.9 billion, respectively, and approximately $15.9 billion and $13.0 billion, respectively, in aggregate long-term borrowings matured or were retired.

The weighted average maturity of long-term borrowings, based upon stated maturity dates, was approximately 6.3 years and 6.1 years at June 30, 2016 and December 31, 2015, respectively.

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Other Secured Financings

Other secured financings include the liabilities related to transfers of financial assets that are accounted for as financings rather than sales, consolidated VIEs where the Firm is deemed to be the primary beneficiary, pledged commodities, certain equity-linked notes and other secured borrowings. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets. See Note 12 for further information on Other secured financings related to VIEs and securitization activities.

Components of Other Secured Financings

	At   June 30,   2016			At  December 31,  2015
		(dollars in millions)
Secured financings with original maturities greater than one year	$		8,159	$	7,629
Secured financings with original maturities one year or less			1,444		1,435
Failed sales(1)			298		400
Total	$		9,901	$	9,464

_________

(1) For more information on failed sales, see Note 12.

11. Commitments, Guarantees and Contingencies

Commitments

The Firm’s commitments are summarized in the following table by years to maturity. Since commitments associated with these instruments may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.

Commitments

	Years to Maturity at June 30, 2016
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
Letters of credit and other financial guarantees obtained to satisfy collateral requirements	$	125	$	—	$	1	$	42	$	168
Investment activities		598		93		16		290		997
Corporate lending commitments(1)		15,625		24,405		47,248		1,501		88,779
Consumer lending commitments		5,255		5		—		4		5,264
Residential real estate lending commitments		52		43		87		236		418
Wholesale real estate lending commitments		127		266		137		69		599
Forward-starting reverse repurchase agreements and securities borrowing agreements(2)		69,990		—		—		—		69,990
Underwriting commitments		25		—		—		—		25
Total	$	91,797	$	24,812	$	47,489	$	2,142	$	166,240

(1) Due to the nature of the Firm’s obligations under the commitments, these amounts include certain commitments participated to third parties of $3.9 billion.

(2) The Firm enters into forward-starting reverse repurchase and securities borrowing agreements that primarily settle within three business days of the trade date, and of the total amount at June 30, 2016, $59.7 billion settled within three business days.

For a further description of these commitments, refer to Note 12 to the consolidated financial statements in the 2015 Form 10-K.

The Firm sponsors several non-consolidated investment funds for third-party investors where it typically acts as general partner of, and investment advisor to, these funds and typically commits to invest a minority of the capital of such funds, with subscribing third-party investors contributing the majority. The Firm’s employees, including its

senior officers as well as the Firm’s Board of Directors, may participate on the same terms and conditions as other investors in certain of these funds that the Firm forms primarily for client investment, except that the Firm may waive or lower applicable fees and charges for its employees. The Firm has contractual capital commitments, guarantees, lending facilities and counterparty arrangements with respect to these investment funds.

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Guarantees

Obligations Under Guarantee Arrangements at June 30, 2016

	Maximum Potential Payout/Notional										Carrying Amount (Asset)/ Liability		Collateral/ Recourse
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
Credit derivative contracts(1)	$	211,128	$	200,959	$	123,957	$	31,246	$	567,290	$	396	$	—
Other credit contracts		43		25		—		276		344		(17)		—
Non-credit derivative contracts(1)		1,087,106		638,791		290,370		540,112		2,556,379		81,420		—
Standby letters of credit and other financial guarantees issued(2)		803		1,091		1,250		5,888		9,032		(123)		6,831
Market value guarantees		63		250		96		15		424		2		6
Liquidity facilities		3,001		—		—		—		3,001		(5)		5,406
Whole loan sales guarantees		—		—		2		23,396		23,398		9		—
Securitization representations and warranties		—		—		—		62,180		62,180		103		—
General partner guarantees		35		39		53		308		435		85		—

(1) Carrying amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting. For further information on derivative contracts, see Note 4.

(2) These amounts include certain issued standby letters of credit participated to third parties totaling $0.7 billion due to the nature of the Firm’s obligations under these arrangements.

The Firm has obligations under certain guarantee arrangements, including contracts and indemnification agreements, that contingently require the Firm to make payments to the guaranteed party based on changes in an underlying measure (such as an interest or foreign exchange rate, security or commodity price, an index, or the occurrence or non-occurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Also included as guarantees are contracts that contingently require the Firm to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others.

For more information on the nature of the obligation and related business activity for market value guarantees, liquidity facilities, whole loan sale guarantees and general partner guarantees related to certain investment management funds, as well as the other products in the previous table, please see Note 12 to the consolidated financial statements in the 2015 Form 10-K.

Other Guarantees and Indemnities

In the normal course of business, the Firm provides guarantees and indemnifications in a variety of transactions. These provisions generally are standard contractual terms. Certain of these guarantees and indemnifications related to trust preferred securities, indemnities and exchange/

clearinghouse member guarantees are described in Note 12 to the consolidated financial statements in the 2015 Form 10-K.

In addition, in the ordinary course of business, the Firm guarantees the debt and/or certain trading obligations (including obligations associated with derivatives, foreign exchange contracts and the settlement of physical commodities) of certain subsidiaries. These guarantees generally are entity or product specific and are required by investors or trading counterparties. The activities of the Firm’s subsidiaries covered by these guarantees (including any related debt or trading obligations) are included in the consolidated financial statements.

Trust Preferred Securities

The Firm has established Morgan Stanley Capital Trusts for the limited purpose of issuing trust preferred securities to third parties and lending such proceeds to the Firm in exchange for junior subordinated debentures. The Morgan Stanley Capital Trusts are SPEs, and only the Parent provides a guarantee for the trust preferred securities. The Firm has directly guaranteed the repayment of the trust preferred securities to the holders in accordance with the terms thereof. See Note 11 to the consolidated financial statements in the 2015 Form 10-K for details on the Firm’s junior subordinated debentures. Additionally, see Note 20 for further information about subsequent events.

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Finance Subsidiary

The Parent Company fully and unconditionally guarantees the securities issued by Morgan Stanley Finance LLC, a 100%-owned finance subsidiary.

Contingencies

Legal.    In the normal course of business, the Firm has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In some cases, the entities that would otherwise be the primary defendants in such cases are bankrupt or are in financial distress. These actions have included, but are not limited to, residential mortgage and credit crisis related matters. Over the last several years, the level of litigation and investigatory activity (both formal and informal) by governmental and self-regulatory agencies has increased materially in the financial services industry. As a result, the Firm expects that it may become the subject of increased claims for damages and other relief and, while the Firm has identified below any individual proceedings where the Firm believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that have not yet been asserted or are not yet determined to be probable or possible and reasonably estimable losses.

The Firm contests liability and/or the amount of damages as appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the consolidated financial statements and the Firm can reasonably estimate the amount of that loss, the Firm accrues the estimated loss by a charge to income. The Firm’s future legal expenses may fluctuate from period to period, given the current environment regarding government investigations and private litigation affecting global financial services firms, including the Firm.

In many proceedings and investigations, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal proceedings and investigations, the Firm cannot reasonably estimate such losses, particularly for proceedings and investigations where the factual record is being developed or contested or where plaintiffs or governmental entities seek substantial or indeterminate damages,

restitution, disgorgement or penalties. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, determination of issues related to class certification and the calculation of damages or other relief, and by addressing novel or unsettled legal questions relevant to the proceedings or investigations in question, before a loss or additional loss or range of loss or additional range of loss can be reasonably estimated for a proceeding or investigation.

For certain other legal proceedings and investigations, the Firm can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the Firm’s consolidated financial statements as a whole, other than the matters referred to in the following paragraphs.

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against the Firm, styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the Firm misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that the Firm knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes it could incur a loss in this action of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On January 25, 2011, the Firm was named as a defendant in The Bank of New York Mellon Trust, National Association v. Morgan Stanley Mortgage Capital, Inc., a litigation pending in the United States District Court for the Southern District of New York (“SDNY”). The suit, brought by the trustee of a series of commercial mortgage pass-through certificates, alleges that the Firm breached certain representations and warranties with respect to an $81 million commercial mortgage loan that was originated and transferred to the trust by the Firm. The complaint seeks, among other things, to have the Firm repurchase the loan and pay additional monetary damages. On June 16, 2014, the court granted the Firm’s supplemental motion for summary judgment, which was appealed by plaintiff. On April 27, 2016, the United States Court of Appeals for the Second

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Circuit vacated the judgment of the SDNY and remanded the case to the SDNY for further proceedings consistent with its opinion. Based on currently available information, the Firm believes it could incur a loss in this action of up to approximately $81 million, plus pre-judgment interest, fees and costs.

On August 7, 2012, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-4SL and Mortgage Pass-Through Certificates, Series 2006-4SL against the Firm. The matter is styled Morgan Stanley Mortgage Loan Trust 2006-4SL, et al. v. Morgan Stanley Mortgage Capital Inc. and is pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $303 million, breached various representations and warranties. The complaint seeks, among other relief, rescission of the mortgage loan purchase agreement underlying the transaction, specific performance and unspecified damages and interest. On August 8, 2014, the court granted in part and denied in part the Firm’s motion to dismiss. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $149 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On August 8, 2012, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-14SL, Mortgage Pass-Through Certificates, Series 2006-14SL, Morgan Stanley Mortgage Loan Trust 2007-4SL and Mortgage Pass-Through Certificates, Series 2007-4SL against the Firm styled Morgan Stanley Mortgage Loan Trust 2006-14SL, et al. v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trusts, which had original principal balances of approximately $354 million and $305 million respectively, breached various representations and warranties. The complaint seeks, among other relief, rescission of the mortgage loan purchase agreements underlying the transactions, specific performance and unspecified damages and interest. On August 16, 2013, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $527 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On September 28, 2012, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-13ARX against the Firm styled Morgan Stanley Mortgage Loan Trust 2006-13ARX v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc., pending in the Supreme Court of NY. The plaintiff filed an amended complaint on January 17, 2013, which asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $609 million, breached various representations and warranties. The amended complaint seeks, among other relief, declaratory judgment relief, specific performance and unspecified damages and interest. By order dated September 30, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the amended complaint. On July 13, 2015, the plaintiff perfected its appeal from the court’s September 30, 2014 decision. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $170 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On January 10, 2013, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-10SL and Mortgage Pass-Through Certificates, Series 2006-10SL against the Firm styled Morgan Stanley Mortgage Loan Trust 2006-10SL, et al. v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $300 million, breached various representations and warranties. The complaint seeks, among other relief, an order requiring the Firm to comply with the loan breach remedy procedures in the transaction documents, unspecified damages, and interest. On August 8, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $197 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against the Firm, certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff currently at issue in this action was approximately $644 million. The complaint alleges causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. The Firm perfected its appeal from that decision on June 12, 2015. At June 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $258 million, and the certificates had incurred actual losses of approximately $84 million. Based on currently available information, the Firm believes it could incur a loss in this action up to the difference between the $258 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Firm, or upon sale, plus pre- and post-judgment interest, fees and costs. The Firm may be entitled to be indemnified for some of these losses.

On July 8, 2013, U.S. Bank National Association, in its capacity as trustee, filed a complaint against the Firm styled U.S. Bank National Association, solely in its capacity as Trustee of the Morgan Stanley Mortgage Loan Trust 2007-2AX (MSM 2007-2AX) v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and Greenpoint Mortgage Funding, Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $650 million, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified damages and interest. On August 22, 2013, the Firm filed a motion to dismiss the complaint, which was granted in part and denied in part on November 24, 2014. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $240 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On December 30, 2013, Wilmington Trust Company, in its capacity as trustee, filed a complaint against the Firm. The matter is styled Wilmington Trust Company v. Morgan

Stanley Mortgage Capital Holdings LLC et al. and is pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $516 million, breached various representations and warranties. The complaint seeks, among other relief, unspecified damages, attorneys’ fees, costs and interest. On February 28, 2014, the defendants filed a motion to dismiss the complaint, which was granted in part and denied in part on June 14, 2016. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $152 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus attorney’s fees, costs and interest, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On April 28, 2014, Deutsche Bank National Trust Company, in its capacity as trustee for Morgan Stanley Structured Trust I 2007-1, filed a complaint against the Firm styled Deutsche Bank National Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC, pending in the SDNY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $735 million, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified compensatory and/or rescissory damages, interest and costs. On April 3, 2015, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $292 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On January 23, 2015, Deutsche Bank National Trust Company, in its capacity as trustee, filed a complaint against the Firm styled Deutsche Bank National Trust Company solely in its capacity as Trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

original principal balance of approximately $1.05 billion, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential, rescissory, equitable and punitive damages, attorneys’ fees, costs and other related expenses, and interest. On October 20, 2015, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available

information, the Firm believes that it could incur a loss in this action of up to approximately $277 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands from a certificate holder and a monoline insurer that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

12. Variable Interest Entities and Securitization Activities

Overview

The Firm is involved with various special purpose entities (“SPE”) in the normal course of business. In most cases, these entities are deemed to be VIEs. The Firm’s transactions with VIEs primarily include securitizations, municipal tender option bond trusts, credit protection purchased through credit-linked notes, other structured financings, collateralized loan and debt obligations, equity-linked notes, partnership investments and certain investment management funds. The Firm’s continuing involvement in VIEs that it does not consolidate can include ownership of retained interests in Firm-sponsored transactions, interests purchased in the secondary market (both for Firm-sponsored transactions and transactions sponsored by third parties), and derivatives with securitization SPEs (primarily

interest rate derivatives in commercial mortgage and residential mortgage securitizations and credit derivatives in which the Firm has purchased protection in synthetic CDOs).

For a further discussion on the Firm’s VIEs, the determination and structure of VIEs and securitization activities, see Note 13 to the consolidated financial statements in the 2015 Form 10-K.

As a result of adopting the accounting update, Amendments to the Consolidation Analysis, on January 1, 2016, certain consolidated entities are now considered VIEs and are included in the balances at June 30, 2016. See Note 2 for further information.

Consolidated VIEs

Assets and Liabilities by Type of Activity

	At June 30, 2016				At December 31, 2015
	VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
	(dollars in millions)
Credit-linked notes	$	901	$	—	$	900	$	—
Other structured financings		924		240		787		13
Asset-backed securitizations(1)		319		191		668		423
Other(2)		931		29		245		—
Total	$	3,075	$	460	$	2,600	$	436

(1) The value of assets is determined based on the fair value of the liabilities of and the interests owned by the Firm in such VIEs, because the fair values for the liabilities and interests owned are more observable.

(2) Other primarily includes certain operating entities, investment funds and structured transactions.

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Assets and Liabilities by Balance Sheet Caption

	At June 30,         2016		At December 31,     2015
	(dollars in millions)
Assets
Cash and due from banks	$	62	$	14
Trading assets, at fair value		1,973		1,842
Customer and other receivables		3		3
Goodwill		18		—
Intangible assets		141		—
Other assets		878		741
Total assets	$	3,075	$	2,600
Liabilities
Other secured financings, at fair value	$	430	$	431
Other liabilities and accrued expenses		30		5
Total liabilities	$	460	$	436

Consolidated VIE assets and liabilities are presented in the previous tables after intercompany eliminations. The assets owned by many consolidated VIEs cannot be removed unilaterally by the Firm and are not generally available to the Firm. The related liabilities issued by many consolidated VIEs are non-recourse to the Firm. In certain other consolidated VIEs, the Firm either has the unilateral right to remove assets or provide additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

As part of the Institutional Securities business segment’s securitization and related activities, the Firm has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 11).

In general, the Firm’s exposure to loss in consolidated VIEs is limited to losses that would be absorbed on the VIE’s net assets recognized in its financial statements, net of amounts

absorbed by third-party variable interest holders. At June 30, 2016 and December 31, 2015, noncontrolling interests in the consolidated financial statements related to consolidated VIEs were $257 million and $37 million, respectively. The Firm also had additional maximum exposure to losses of approximately $76 million and $72 million at June 30, 2016 and December 31, 2015, respectively, primarily related to certain derivatives, commitments, guarantees and other forms of involvement.

Non-consolidated VIEs

The following tables include all VIEs in which the Firm has determined that its maximum exposure to loss is greater than specific thresholds or meets certain other criteria. Most of the VIEs included in the following tables are sponsored by unrelated parties; the Firm’s involvement generally is the result of its secondary market-making activities, securities held in its Investment securities portfolio (see Note 5), and certain investments in funds.

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Non-Consolidated VIE Assets and Liabilities, Maximum and Carrying Value of Exposure to Loss

	At June 30, 2016
	Mortgage- and Asset-Backed Securitizations		Collateralized Debt Obligations		Municipal Tender Option Bonds		Other Structured Financings		Other
	(dollars in millions)
VIE assets that the Firm does not consolidate (unpaid principal balance)	$	115,088	$	6,825	$	4,999	$	4,081	$	39,281
Maximum exposure to loss:
Debt and equity interests	$	12,670	$	955	$	31	$	1,712	$	4,706
Derivative and other contracts		—		—		3,001		—		73
Commitments, guarantees and other		612		350		—		363		300
Total maximum exposure to loss	$	13,282	$	1,305	$	3,032	$	2,075	$	5,079
Carrying value of exposure to loss—Assets:
Debt and equity interests	$	12,670	$	955	$	3	$	1,324	$	4,706
Derivative and other contracts		—		—		5		—		27
Total carrying value of exposure to loss—Assets	$	12,670	$	955	$	8	$	1,324	$	4,733
Carrying value of exposure to loss—Liabilities:
Derivative and other contracts	$	—	$	—	$	—	$	—	$	31
Commitments, guarantees and other		—		—		—		2		10
Total carrying value of exposure to loss—Liabilities	$	—	$	—	$	—	$	2	$	41

	At December 31, 2015
	Mortgage- and Asset-Backed Securitizations		Collateralized Debt Obligations		Municipal Tender Option Bonds		Other Structured Financings		Other
	(dollars in millions)
VIE assets that the Firm does not consolidate (unpaid principal balance)	$	126,872	$	8,805	$	4,654	$	2,201	$	20,775
Maximum exposure to loss:
Debt and equity interests	$	13,361	$	1,259	$	1	$	1,129	$	3,854
Derivative and other contracts		—		—		2,834		—		67
Commitments, guarantees and other		494		231		—		361		222
Total maximum exposure to loss	$	13,855	$	1,490	$	2,835	$	1,490	$	4,143
Carrying value of exposure to loss—Assets:
Debt and equity interests	$	13,361	$	1,259	$	1	$	685	$	3,854
Derivative and other contracts		—		—		5		—		13
Total carrying value of exposure to loss—Assets	$	13,361	$	1,259	$	6	$	685	$	3,867
Carrying value of exposure to loss—Liabilities:
Derivative and other contracts	$	—	$	—	$	—	$	—	$	15
Commitments, guarantees and other		—		—		—		3		—
Total carrying value of exposure to loss—Liabilities	$	—	$	—	$	—	$	3	$	15

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Non-Consolidated VIE Mortgage- and Asset-Backed Securitization Assets

	At June 30, 2016				At December 31, 2015
	Unpaid Principal Balance		Debt and Equity Interests		Unpaid Principal Balance		Debt and Equity Interests
	(dollars in millions)
Residential mortgages	$	3,708	$	410	$	13,787	$	1,012
Commercial mortgages		55,158		2,576		57,313		2,871
U.S. agency collateralized mortgage obligations		20,853		3,766		13,236		2,763
Other consumer or commercial loans		35,369		5,918		42,536		6,715
Total mortgage- and asset-backed securitization assets	$	115,088	$	12,670	$	126,872	$	13,361

The Firm’s maximum exposure to loss often differs from the carrying value of the variable interests held by the Firm. The maximum exposure to loss is dependent on the nature of the Firm’s variable interest in the VIEs and is limited to the notional amounts of certain liquidity facilities, other credit support, total return swaps, written put options, and the fair value of certain other derivatives and investments the Firm has made in the VIEs. Liabilities issued by VIEs generally are non-recourse to the Firm. Where notional amounts are utilized in quantifying maximum exposure related to derivatives, such amounts do not reflect fair value write-downs already recorded by the Firm.

The Firm’s maximum exposure to loss does not include the offsetting benefit of any financial instruments that the Firm may utilize to hedge these risks associated with its variable interests. In addition, the Firm’s maximum exposure to loss is not reduced by the amount of collateral held as part of a transaction with the VIE or any party to the VIE directly against a specific exposure to loss.

Securitization transactions generally involve VIEs. Primarily as a result of its secondary market-making activities, the Firm owned additional VIE assets mainly issued by securi-

tization SPEs for which the maximum exposure to loss is less than specific thresholds. These additional assets totaled $12.7 billion and $12.9 billion at June 30, 2016 and December 31, 2015, respectively. These assets were either retained in connection with transfers of assets by the Firm, acquired in connection with secondary market-making activities or held as AFS securities in its Investment securities portfolio (see Note 5) or held as investments in funds. At June 30, 2016 and December 31, 2015, these assets consisted of securities backed by residential mortgage loans, commercial mortgage loans or other consumer loans, such as credit card receivables, automobile loans and student loans, CDOs or CLOs, and investment funds. The Firm’s primary risk exposure is to the securities issued by the SPE owned by the Firm, with the risk highest on the most subordinate class of beneficial interests. These assets generally are included in Trading assets—Corporate and other debt, Trading assets—Investments or AFS securities within its Investment securities portfolio and are measured at fair value (see Note 3). The Firm does not provide additional support in these transactions through contractual facilities, such as liquidity facilities, guarantees or similar derivatives. The Firm’s maximum exposure to loss generally equals the fair value of the assets owned.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Transfers of Assets with Continuing Involvement

Transactions with SPEs in which the Firm, acting as principal, transferred financial assets with continuing involvement and received sales treatment are shown herein.

	At June 30, 2016
	Residential Mortgage Loans		Commercial Mortgage Loans		U.S. Agency Collateralized Mortgage Obligations		Credit- Linked Notes and Other(1)
	(dollars in millions)
SPE assets (unpaid principal balance)(2)	$	21,239	$	51,025	$	11,116	$	11,668
Retained interests (fair value):
Investment grade	$	—	$	43	$	755	$	—
Non-investment grade		54		64		—		974
Total retained interests (fair value)	$	54	$	107	$	755	$	974
Interests purchased in the secondary market (fair value):
Investment grade	$	—	$	32	$	142	$	—
Non-investment grade		53		47		—		—
Total interests purchased in the secondary market (fair value)	$	53	$	79	$	142	$	—
Derivative assets (fair value)	$	—	$	291	$	—	$	206
Derivative liabilities (fair value)		—		—		—		449

	At December 31, 2015
	Residential Mortgage Loans		Commercial Mortgage Loans		U.S. Agency Collateralized Mortgage Obligations		Credit- Linked Notes and Other(1)
	(dollars in millions)
SPE assets (unpaid principal balance)(2)	$	22,440	$	72,760	$	17,978	$	12,235
Retained interests (fair value):
Investment grade	$	—	$	238	$	649	$	—
Non-investment grade		160		63		—		1,136
Total retained interests (fair value)	$	160	$	301	$	649	$	1,136
Interests purchased in the secondary market (fair value):
Investment grade	$	—	$	88	$	99	$	—
Non-investment grade		60		63		—		10
Total interests purchased in the secondary market (fair value)	$	60	$	151	$	99	$	10
Derivative assets (fair value)	$	—	$	343	$	—	$	151
Derivative liabilities (fair value)		—		—		—		449

(1) Amounts include CLO transactions managed by unrelated third parties.

(2) Amounts include assets transferred by unrelated transferors.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	At June 30, 2016
	Level 1		Level 2		Level 3		Total
	(dollars in millions)
Retained interests (fair value):
Investment grade	$	—	$	798	$	—	$	798
Non-investment grade		—		15		1,077		1,092
Total retained interests (fair value)	$	—	$	813	$	1,077	$	1,890
Interests purchased in the secondary market (fair value):
Investment grade	$	—	$	174	$	—	$	174
Non-investment grade		—		85		15		100
Total interests purchased in the secondary market (fair value)	$	—	$	259	$	15	$	274
Derivative assets (fair value)	$	—	$	482	$	15	$	497
Derivative liabilities (fair value)		—		102		347		449

	At December 31, 2015
	Level 1		Level 2		Level 3		Total
	(dollars in millions)
Retained interests (fair value):
Investment grade	$	—	$	886	$	1	$	887
Non-investment grade		—		17		1,342		1,359
Total retained interests (fair value)	$	—	$	903	$	1,343	$	2,246
Interests purchased in the secondary market (fair value):
Investment grade	$	—	$	187	$	—	$	187
Non-investment grade		—		112		21		133
Total interests purchased in the secondary market (fair value)	$	—	$	299	$	21	$	320
Derivative assets (fair value)	$	—	$	466	$	28	$	494
Derivative liabilities (fair value)		—		110		339		449

Transferred assets are carried at fair value prior to securitization, and any changes in fair value are recognized in the consolidated statements of income. The Firm may act as underwriter of the beneficial interests issued by these securitization vehicles. Investment banking underwriting net revenues are recognized in connection with these

transactions. The Firm may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are included in the consolidated balance sheets at fair value. Any changes in the fair value of such retained interests are recognized in the consolidated statements of income.

Proceeds from New Securitization Transactions and Retained Interests in Securitization Transactions

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions)
Proceeds received from new securitization transactions	$	4,163	$	6,273	$	6,876	$	11,164
Proceeds from retained interests in securitization transactions		502		658		1,133		1,606

Net gains on sale of assets in securitization transactions at the time of the sale were not material in the current quarter, current year period, prior year quarter and prior year period. The Firm has provided, or otherwise agreed to be

responsible for representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 11).

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Proceeds from Sales to CLO Entities Sponsored by Non-Affiliates

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions)
Proceeds from sale of corporate loans sold to those SPEs	$	—	$	621	$	31	$	966

Net gains on sale of corporate loans to CLO transactions at the time of sale were not material in the current quarter, current year period, prior year quarter and prior year period.

The Firm also enters into transactions in which it sells equity securities and contemporaneously enters into bilateral OTC equity derivatives with the purchasers of the securities, through which it retains the exposure to the securities as shown in the following table.

	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Carrying value of assets derecognized at the time of sale and gross cash proceeds	$	9,524	$	7,878
Fair value of assets sold		9,692		7,935
Fair value of derivative assets recognized in the consolidated balance sheets		218		97
Fair value of derivative liabilities recognized in the consolidated balance sheets		50		40

Failed Sales

For transfers that fail to meet the accounting criteria for a sale, the Firm continues to recognize the assets in Trading assets at fair value, and the Firm recognizes the associated liabilities in Other secured financings at fair value in the consolidated balance sheets (see Note 10).

The assets transferred to unconsolidated VIEs in transactions accounted for as failed sales cannot be removed unilaterally by the Firm and are not generally available to the Firm. The related liabilities are also non-recourse to the

Firm. In certain other failed sale transactions, the Firm has the right to remove assets or provide additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

Carrying Value of Assets and Liabilities Related to Failed Sales

	At June 30, 2016				At December 31, 2015
	Assets		Liabilities		Assets		Liabilities
	(dollars in millions)
Failed sales	$	298	$	298	$	400	$	400

13.    Regulatory Requirements

Regulatory Capital Framework

For a discussion of the Firm’s regulatory capital framework, see Note 14 to the consolidated financial statements in the 2015 Form 10-K.

Risk-Based Capital Requirement

The Firm is required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. The Firm’s binding risk-based capital ratios for regulatory purposes are the lower of the capital ratios computed under the (i) standardized approaches for calculating credit risk-weighted assets (“RWAs”) and market risk RWAs (the “Standardized Approach”); and (ii) applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”).

In addition to the minimum risk-based capital ratio requirements, on a fully phased-in basis by 2019, the Firm will be subject to:

• A greater than 2.5% Common Equity Tier 1 capital conservation buffer;

• The Common Equity Tier 1 global systemically important bank (“G-SIB”) capital surcharge, currently at 3%; and

• Up to a 2.5% Common Equity Tier 1 countercyclical capital buffer, currently set by banking regulators at zero (collectively, the “buffers”).

In 2016, the phase-in amount for each of the buffers is 25% of the fully phased-in buffer requirement. Failure to maintain the buffers will result in restrictions on the Firm’s

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers.

The methods for calculating each of the Firm’s risk-based capital ratios will change through January 1, 2022 as aspects of the capital rules are phased in. These changes may result in differences in the Firm’s reported capital

ratios from one reporting period to the next that are independent of changes to its capital base, asset composition, off-balance sheet exposures or risk profile.

For a further discussion of the Firm’s calculation of risk-based capital ratios, see Note 14 to the consolidated financial statements in the 2015 Form 10-K.

The Firm’s Regulatory Capital and Capital Ratios

At June 30, 2016 and December 31, 2015, the Firm’s binding ratios are based on the Advanced Approach transitional rules.

Regulatory Capital Measures and Minimum Regulatory Capital Ratios

	At June 30, 2016									At December 31, 2015
	Amount			Ratio			Minimum      Ratio(1)			Amount			Ratio			Minimum      Ratio(1)
	(dollars in millions)
Regulatory capital and capital ratios:
Common Equity Tier 1 capital		$	59,796		16.8	%		5.9	%		$	59,409		15.5	%		4.5	%
Tier 1 capital			66,782		18.8	%		7.4	%			66,722		17.4	%		6.0	%
Total capital			79,830		22.4	%		9.4	%			79,403		20.7	%		8.0	%
Tier 1 leverage(2)			—		8.3	%		4.0	%			—		8.3	%		4.0	%
Assets:
Total RWAs		$	355,982		N/	A		N/	A		$	384,162		N/	A		N/	A
Adjusted average assets(3)			804,511		N/	A		N/	A			803,574		N/	A		N/	A

N/A—Not Applicable

(1) Percentages represent minimum regulatory capital ratios under the transitional rules.

(2) Tier 1 leverage ratios are calculated under Standardized Approach transitional rules.

(3) Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the calendar quarter, adjusted for disallowed goodwill, transitional intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments.

U.S. Bank Subsidiaries’ Regulatory Capital and Capital Ratios

Morgan Stanley Bank, N.A. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA”) (collectively, “U.S. Bank Subsidiaries”) are subject to similar regulatory capital requirements as the Firm. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the Firm’s U.S. Bank Subsidiaries’ financial statements. Under

capital adequacy guidelines and the regulatory framework for prompt corrective action, each of the Firm’s U.S. Bank Subsidiaries must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.

At June 30, 2016 and December 31, 2015, the Firm’s U.S. Bank Subsidiaries’ binding ratios are based on the Standardized Approach transitional rules.

U.S. Bank Subsidiaries’ Regulatory Capital Measures and Required Capital Ratios

	Morgan Stanley Bank, N.A.
	At June 30, 2016						At December 31, 2015
	Amount		Ratio		Required Capital     Ratio(1)		Amount		Ratio		Required Capital     Ratio(1)
	(dollars in millions)
Common Equity Tier 1 capital	$	14,523		16.8%		6.5%	$	13,333		15.1%		6.5%
Tier 1 capital		14,523		16.8%		8.0%		13,333		15.1%		8.0%
Total capital		16,321		18.9%		10.0%		15,097		17.1%		10.0%
Tier 1 leverage		14,523		10.9%		5.0%		13,333		10.2%		5.0%

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Morgan Stanley Private Bank, National Association
	At June 30, 2016						At December 31, 2015
	Amount		Ratio		Required Capital Ratio(1)		Amount		Ratio		Required Capital Ratio(1)
	(dollars in millions)
Common Equity Tier 1 capital	$	5,153		28.0%		6.5%	$	4,197		26.5%		6.5%
Tier 1 capital		5,153		28.0%		8.0%		4,197		26.5%		8.0%
Total capital		5,186		28.2%		10.0%		4,225		26.7%		10.0%
Tier 1 leverage		5,153		11.4%		5.0%		4,197		10.5%		5.0%

(1) Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes.

Under regulatory capital requirements adopted by the U.S. federal banking agencies, U.S. depository institutions, in order to be considered well-capitalized, must maintain certain minimum capital ratios. Each U.S. depository institution subsidiary of the Firm must be well-capitalized in order for the Firm to continue to qualify as a financial holding company and to continue to engage in the broadest range of financial activities permitted for financial holding companies. At June 30, 2016 and December 31, 2015, the Firm’s U.S. Bank Subsidiaries maintained capital at levels sufficiently in excess of the universally mandated well-capitalized requirements to address any additional capital needs and requirements identified by the U.S. federal banking regulators.

Broker-Dealer Regulatory Capital Requirements

Morgan Stanley & Co. LLC (“MS&Co.”) is a registered broker-dealer and registered futures commission merchant and, accordingly, is subject to the minimum net capital requirements of the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Commodity Futures Trading Commission (“CFTC”). MS&Co. has consistently operated with capital in excess of its regulatory capital requirements. MS&Co.’s net capital totaled $10,353 million and $10,254 million at June 30, 2016 and December 31, 2015, respectively, which exceeded the amount required by $8,397 million and $8,458 million, respectively. MS&Co. is required to hold tentative net capital in excess of $1 billion and net capital in excess of $500 million in accordance with the market and credit risk standards of Appendix E of SEC Rule 15c3-1. In addition, MS&Co. is required to notify the SEC in the event that its tentative net capital is less than $5 billion. At June 30, 2016 and December 31, 2015, MS&Co. had tentative net capital in excess of the minimum and the notification requirements.

Morgan Stanley Smith Barney LLC (“MSSB LLC”) is a registered broker-dealer and introducing broker for the futures business and, accordingly, is subject to the minimum net capital requirements of the SEC and the CFTC. MSSB LLC has consistently operated with capital in excess of its regulatory capital requirements. MSSB LLC’s net capital totaled $3,752 million and $3,613 million at

June 30, 2016 and December 31, 2015, respectively, which exceeded the amount required by $3,595 million and $3,459 million, respectively.

Morgan Stanley & Co. International plc (“MSIP”), a London-based broker-dealer subsidiary, is subject to the capital requirements of the Prudential Regulation Authority, and Morgan Stanley MUFG Securities Co., Ltd. (“MSMS”), a Tokyo-based broker-dealer subsidiary, is subject to the capital requirements of the Financial Services Agency. MSIP and MSMS have consistently operated with capital in excess of their respective regulatory capital requirements.

Other Regulated Subsidiaries

Certain other U.S. and non-U.S. subsidiaries of the Firm are subject to various securities, commodities and banking regulations, and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have consistently operated with capital in excess of their local capital adequacy requirements.

14. Total Equity

Dividends and Share Repurchases

The Firm repurchased approximately $625 million of our outstanding common stock as part of our share repurchase program during the current quarter and $1,250 million during the current year period. The Firm repurchased approximately $625 million during the prior year quarter and $875 million in the prior year period.

For a description of the 2015 capital plan, see Note 15 to the consolidated financial statements in the 2015 Form 10-K.

In June 2016, the Firm received a conditional non-objection from the Federal Reserve to its 2016 capital plan. The capital plan included a share repurchase of up to $3.5 billion of the Firm’s outstanding common stock during the period beginning July 1, 2016 through June 30, 2017. Additionally, the capital plan included an increase in the quarterly common stock dividend to $0.20 per share from

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

$0.15 per share during the period beginning with the dividend declared on July 20, 2016 (see Note 20). The Federal Reserve Board also asked the Firm to submit an additional capital plan by December 29, 2016 addressing weaknesses identified in the Firm’s capital planning process.

Preferred Stock

For a description of Series A through Series J preferred stock issuances, see Note 15 to the consolidated financial statements in the 2015 Form 10-K. Dividends declared on the Firm’s outstanding preferred stock were $156 million during the current

quarter and $141 million during the prior year quarter, and $234 million during the current year period and $219 million during the prior year period. On June 15, 2016, the Firm announced that the Board declared a quarterly dividend for preferred stock shareholders of record on June 30, 2016 that was paid on July 15, 2016. The Firm is authorized to issue 30 million shares of preferred stock. The preferred stock has a preference over the common stock upon liquidation. The Firm’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements (see Note 13).

Preferred Stock Outstanding

Series	Shares Outstanding At June 30, 2016		Liquidation Preference per Share		Carrying Value
					At June 30, 2016		At December 31, 2015
	(shares in millions)				(dollars in millions)
A		44,000	$	25,000	$	1,100	$	1,100
C(1)		519,882		1,000		408		408
E		34,500		25,000		862		862
F		34,000		25,000		850		850
G		20,000		25,000		500		500
H		52,000		25,000		1,300		1,300
I		40,000		25,000		1,000		1,000
J		60,000		25,000		1,500		1,500
Total					$	7,520	$	7,520

(1) Series C is comprised of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million.

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MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Accumulated Other Comprehensive Income (Loss)

Changes in AOCI by Component, Net of Tax and Noncontrolling Interests

	Foreign Currency Translation Adjustments		AFS Securities		Pensions, Postretirement and Other		DVA		Total
	(dollars in millions)
Balance at March 31, 2016	$	(831)	$	76	$	(373)	$	(110)	$	(1,238)
Change in OCI before reclassifications		52		188		(5)		143		378
Amounts reclassified from AOCI(2)(3)		—		(45)		—		—		(45)
Net OCI during the period		52		143		(5)		143		333
Balance at June 30, 2016	$	(779)	$	219	$	(378)	$	33	$	(905)
Balance at March 31, 2015	$	(883)	$	127	$	(510)	$	—		(1,266)
Change in OCI before reclassifications		50		(208)		(4)		—		(162)
Amounts reclassified from AOCI(3)		—		(20)		1		—		(19)
Net OCI during the period		50		(228)		(3)		—		(181)
Balance at June 30, 2015	$	(833)	$	(101)	$	(513)	$	—		(1,447)
Balance at December 31, 2015	$	(963)	$	(319)	$	(374)	$	—	$	(1,656)
Cumulative adjustment for accounting change related to DVA(1)		—		—		—		(312)		(312)
Change in OCI before reclassifications		184		590		(3)		371		1,142
Amounts reclassified from AOCI(2)(3)		—		(52)		(1)		(26)		(79)
Net OCI during the period		184		538		(4)		345		1,063
Balance at June 30, 2016	$	(779)	$	219	$	(378)	$	33	$	(905)
Balance at December 31, 2014	$	(663)	$	(73)	$	(512)	$	—	$	(1,248)
Change in OCI before reclassifications		(170)		7		(4)		—		(167)
Amounts reclassified from AOCI(3)		—		(35)		3		—		(32)
Net OCI during the period		(170)		(28)		(1)		—		(199)
Balance at June 30, 2015	$	(833)	$	(101)	$	(513)	$	—	$	(1,447)

(1) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, a cumulative catch up adjustment was recorded as of January 1, 2016 to move the cumulative DVA amount, net of noncontrolling interest and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOCI. See Note 2 for further information.

(2) Amounts reclassified from AOCI related to realization of DVA are classified within Trading revenues in the consolidated statements of income. The tax impact in Provision for (benefit from) income taxes resulting from such reclassifications was $(15) million related to DVA in the current year period. See Note 2 for further information.

(3) Amounts reclassified from AOCI related to realized gains and losses from sales of AFS securities are classified within Other revenues in the consolidated statements of income. The tax impact in Provision for (benefit from) income taxes resulting from such reclassifications was $(26) million in the current quarter and $(30) million in the current year period, and $(11) million in the prior quarter and $(20) million for the prior year period.

Noncontrolling Interests

Noncontrolling interests were $1,259 million and $1,002 million at June 30, 2016 and December 31, 2015, respectively. The increase in noncontrolling interests was primarily due to the consolidation of certain investment management funds sponsored by the Firm. See Note 2 for further information on the adoption of the accounting update Amendments to the Consolidation Analysis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

15. Earnings per Common Share

Calculation of Basic and Diluted Earnings per Common Share (“EPS”)

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in millions, except for per share data)
Basic EPS:
Income from continuing operations	$	1,650	$	1,833	$	2,810	$	4,301
Income (loss) from discontinued operations		(4)		(2)		(7)		(7)
Net income		1,646		1,831		2,803		4,294
Net income applicable to noncontrolling interests		64		24		87		93
Net income applicable to Morgan Stanley		1,582		1,807		2,716		4,201
Less: Preferred stock dividends		(156)		(141)		(234)		(219)
Less: Allocation of (earnings) loss to participating RSUs(1)		(1)		(1)		(1)		(3)
Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
Weighted average common shares outstanding		1,866		1,919		1,875		1,922
Earnings per basic common share:
Income from continuing operations	$	0.77	$	0.87	$	1.33	$	2.07
Income (loss) from discontinued operations		(0.01)		—		(0.01)		—
Earnings per basic common share	$	0.76	$	0.87	$	1.32	$	2.07
Diluted EPS:
Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
Weighted average common shares outstanding		1,866		1,919		1,875		1,922
Effect of dilutive securities: Stock options and RSUs(1)		33		41		32		40
Weighted average common shares outstanding and common stock equivalents		1,899		1,960		1,907		1,962
Earnings per diluted common share:
Income from continuing operations	$	0.75	$	0.85	$	1.30	$	2.03
Income (loss) from discontinued operations		—		—		—		—
Earnings per diluted common share	$	0.75	$	0.85	$	1.30	$	2.03

(1) Restricted stock units (“RSUs”) that are considered participating securities are treated as a separate class of securities in the computation of basic EPS, and, therefore, such RSUs are not included as incremental shares in the diluted EPS computations. The diluted EPS computations also do not include weighted average antidilutive RSUs and antidilutive stock options of 14 million shares and 12 million shares for the current quarter and prior year quarter, respectively, and 15 million shares and 12 million shares for the current year period and prior year period, respectively.

64

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

16. Interest Income and Interest Expense

Interest Income and Interest Expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions)
Interest income(1):
Trading assets(2)	$	526	$	555	$	1,109	$	1,149
Investment securities		237		238		473		438
Loans		680		529		1,327		1,004
Interest bearing deposits with banks		52		22		105		45
Securities purchased under agreements to resell and Securities borrowed(3)		(120)		(200)		(198)		(305)
Customer receivables and Other(4)		292		242		598		539
Total interest income	$	1,667	$	1,386	$	3,414	$	2,870
Interest expense(1):
Deposits	$	15	$	17	$	37	$	35
Short-term borrowings		7		5		14		9
Long-term borrowings		844		915		1,804		1,841
Securities sold under agreements to repurchase and Securities loaned(5)		259		235		513		543
Customer payables and Other(6)		(371)		(484)		(766)		(852)
Total interest expense	$	754	$	688	$	1,602	$	1,576
Net interest	$	913	$	698	$	1,812	$	1,294

(1) Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument and related market conventions. When interest is included as a component of the instrument’s fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense.

(2) Interest expense on Trading liabilities is reported as a reduction to Interest income on Trading assets.

(3) Includes fees paid on Securities borrowed.

(4) Includes interest from customer receivables and other interest earning assets.

(5) Includes fees received on Securities loaned.

(6) Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

17. Employee Benefit Plans

The Firm sponsors various retirement plans for the majority of its U.S. and non-U.S. employees. The Firm provides certain other postretirement benefits, primarily health care and life insurance, to eligible U.S. employees.

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions)
Service cost, benefits earned during the period	$	4	$	5	$	8	$	10
Interest cost on projected benefit obligation		39		38		77		77
Expected return on plan assets		(30)		(29)		(60)		(59)
Net amortization of prior service credit		(5)		(5)		(9)		(10)
Net amortization of actuarial loss		3		7		6		13
Net periodic benefit expense	$	11	$	16	$	22	$	31

65

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

18. Income Taxes

The Firm is under continuous examination by the Internal Revenue Service (the “IRS”) and other tax authorities in certain countries, such as Japan and the United Kingdom (“U.K.”), and in states in which it has significant business operations, such as New York. The Firm is currently at various levels of field examination with respect to audits by the IRS, as well as New York State and New York City, for tax years 2009-2012 and 2007-2009, respectively. The Firm believes that the resolution of these tax matters will not have a material effect in the consolidated balance sheets, although a resolution could have a material impact in the consolidated statements of income for a particular future period and on the effective tax rate for any period in which such resolution occurs.

In April 2016, the Firm received a notification from the IRS that the Congressional Joint Committee on Taxation approved the final report of an Appeals Office review of matters from tax years 1999-2005, and the Revenue Agent’s Report reflecting agreed closure of the 2006-2008 tax years. The Firm has reserved the right to contest certain items, associated with tax years 1999-2005, the resolution of which is not expected to have a material impact on the effective tax rate or the consolidated financial statements.

During 2016, the Firm expects to reach a conclusion with the U.K. tax authorities on substantially all issues through

tax year 2010, the resolution of which is not expected to have a material impact on the effective tax rate or the consolidated financial statements.

The Firm has established a liability for unrecognized tax benefits that it believes is adequate in relation to the potential for additional assessments. Once established, the Firm adjusts liabilities for unrecognized tax benefits only when more information is available or when an event occurs necessitating a change.

It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months related to certain tax authority examinations referred to herein. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Firm’s effective tax rate over the next 12 months.

The Firm’s effective tax rate from continuing operations for the prior year period included a net discrete tax benefit of $564 million. This net discrete tax benefit was primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated due to an internal restructuring to simplify the Firm’s legal entity organization in the U.K.

66

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

19. Segment and Geographic Information

Segment Information

For a discussion about the Firm’s business segments, see Note 21 to the consolidated financial statements in the 2015 Form 10-K.

Selected Financial Information

	Three Months Ended June 30, 2016
	Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
	(dollars in millions)
Total non-interest revenues(2)(3)	$	4,496	$	2,982	$	581	$	(63)	$	7,996
Interest income		966		920		3		(222)		1,667
Interest expense		884		91		1		(222)		754
Net interest		82		829		2		—		913
Net revenues	$	4,578	$	3,811	$	583	$	(63)	$	8,909
Income from continuing operations before income taxes	$	1,506	$	859	$	118	$	—	$	2,483
Provision for income taxes		453		343		37		—		833
Income from continuing operations		1,053		516		81		—		1,650
Income (loss) from discontinued operations, net of income taxes		(4)		—		—		—		(4)
Net income		1,049		516		81		—		1,646
Net income applicable to noncontrolling interests		61		—		3		—		64
Net income applicable to Morgan Stanley	$	988	$	516		$        78	$	—		$        1,582

67

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Three Months Ended June 30, 2015
	Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
	(dollars in millions)
Total non-interest revenues(2)(3)	$	5,205	$	3,138	$	757	$	(55)	$	9,045
Interest income		723		782		—		(119)		1,386
Interest expense		756		45		6		(119)		688
Net interest		(33)		737		(6)		—		698
Net revenues	$	5,172	$	3,875	$	751	$	(55)	$	9,743
Income from continuing operations before income taxes	$	1,622	$	885	$	220	$	—	$	2,727
Provision for income taxes		511		324		59		—		894
Income from continuing operations		1,111		561		161		—		1,833
Income (loss) from discontinued operations, net of income taxes		(2)		—		—		—		(2)
Net income		1,109		561		161		—		1,831
Net income applicable to noncontrolling interests		22		—		2		—		24
Net income applicable to Morgan Stanley	$	1,087	$	561	$	159	$	—	$	1,807

	Six Months Ended June 30, 2016
	Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
	(dollars in millions)
Total non-interest revenues(2)(3)	$	8,141	$	5,819	$	1,059	$	(130)	$	14,889
Interest income		2,019		1,834		4		(443)		3,414
Interest expense		1,868		174		3		(443)		1,602
Net interest		151		1,660		1		—		1,812
Net revenues	$	8,292	$	7,479	$	1,060	$	(130)	$	16,701
Income from continuing operations before income taxes	$	2,414	$	1,645	$	162	$	—	$	4,221
Provision for income taxes		728		636		47		—		1,411
Income from continuing operations		1,686		1,009		115		—		2,810
Income (loss) from discontinued operations, net of income taxes		(7)		—		—		—		(7)
Net income		1,679		1,009		115		—		2,803
Net income applicable to noncontrolling interests		100		—		(13)		—		87
Net income applicable to Morgan Stanley	$	1,579	$	1,009	$	128	$	—	$	2,716

68

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

	Six Months Ended June 30, 2015
	Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
	(dollars in millions)
Total non-interest revenues(2)(3)	$	10,751	$	6,283	$	1,431	$	(109)	$	18,356
Interest income		1,593		1,519		1		(243)		2,870
Interest expense		1,714		93		12		(243)		1,576
Net interest		(121)		1,426		(11)		—		1,294
Net revenues	$	10,630	$	7,709	$	1,420	$	(109)	$	19,650
Income from continuing operations before income taxes	$	3,435	$	1,740	$	407	$	—	$	5,582
Provision for income taxes(4)		517		644		120		—		1,281
Income from continuing operations		2,918		1,096		287		—		4,301
Income (loss) from discontinued operations, net of income taxes		(7)		—		—		—		(7)
Net income		2,911		1,096		287		—		4,294
Net income applicable to noncontrolling interests		74		—		19		—		93
Net income applicable to Morgan Stanley	$	2,837	$	1,096	$	268	$	—	$	4,201

(1) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, for the current quarter and current year period DVA gains (losses) are recorded within OCI when unrealized and in Trading revenues when realized. In the prior year quarter and prior year period, the realized and unrealized DVA gains (losses) are recorded in Trading revenues. See Notes 2 and 14 for further information.

(2) In certain management fee arrangements, the Firm is entitled to receive performance-based fees (also referred to as incentive fees and includes carried interest) when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, performance fee revenues are accrued (or reversed) quarterly based on measuring account/fund performance to date versus the performance benchmark stated in the investment management agreement. The Firm’s portion of unrealized cumulative amount of performance-based fee revenue (for which the Firm is not obligated to pay compensation) at risk of reversing if fund performance falls below stated investment management agreement benchmarks was approximately $421 million and $422 million at June 30, 2016 and December 31, 2015, respectively. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

(3) The Firm waives a portion of its fees from certain registered money market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940. These fee waivers resulted in a reduction of fees of approximately $12 million and $50 million for the current quarter and prior year quarter, respectively, and $35 million and $100 million for the current year period and prior year period, respectively.

(4) The Firm’s effective tax rate from continuing operations for the prior year period included a net discrete tax benefit of $564 million, within Institutional Securities (see Note 18).

Total Assets by Business Segment

	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Institutional Securities	$	641,373	$	602,714
Wealth Management		182,801		179,708
Investment Management		4,699		5,043
Total(1)	$	828,873	$	787,465

_________

(1) Corporate assets have been fully allocated to the business segments.

69

MORGAN STANLEY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

Geographic Information

For a discussion about the Firm’s geographic net revenues, see Note 21 to the consolidated financial statements in the 2015 Form 10-K.

Net Revenues by Region

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions)
Americas	$	6,538	$	6,777	$	12,290	$	13,707
EMEA		1,312		1,436		2,441		3,198
Asia-Pacific		1,059		1,530		1,970		2,745
Net revenues	$	8,909	$	9,743	$	16,701	$	19,650

20. Subsequent Events

The Firm has evaluated subsequent events for adjustment to or disclosure in the consolidated financial statements through the date of this report and has not identified any recordable or disclosable events, not otherwise reported in these consolidated financial statements or the notes thereto, except for the following:

Common Stock Dividend

On July 20, 2016, the Firm announced that its Board of Directors declared a quarterly dividend per common share of $0.20. The dividend is payable on August 15, 2016 to common shareholders of record on July 29, 2016.

Long-Term Borrowings

Subsequent to June 30, 2016 and through July 29, 2016, long-term borrowings increased by approximately $3.4 billion, net of redemptions. This amount includes the issuance of $3.0 billion of senior debt on July 25, 2016.

Trust Preferred Securities

On July 19, 2016, the Firm announced that Morgan Stanley Capital Trust III, Morgan Stanley Capital Trust IV and Morgan Stanley Capital Trust V will redeem all of their issued and outstanding Capital Securities on August 18, 2016, and that Morgan Stanley Capital Trust VIII will redeem all of its issued and outstanding Capital Securities on August 3, 2016, pursuant to the optional redemption provisions provided in the respective governing documents. In the aggregate, $2.8 billion will be redeemed. The Firm will concurrently redeem the related underlying junior subordinated debentures.

70

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Morgan Stanley:

We have reviewed the accompanying condensed consolidated balance sheet of Morgan Stanley and subsidiaries (the “Company”) as of June 30, 2016, and the related condensed consolidated statements of income and comprehensive income for the three-month and six-month periods ended June 30, 2016 and 2015, and the condensed consolidated statements of cash flows and changes in total equity for the six-month periods ended June 30, 2016 and 2015. These interim condensed consolidated financial statements are the responsibility of the management of the Company.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition of the Company as of December 31, 2015, and the consolidated statements of income, comprehensive income, cash flows and changes in total equity for the year then ended (not presented herein) included in the Company’s Annual Report on Form 10-K; and in our report dated February 23, 2016, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2015 is fairly stated, in all material respects, in relation to the consolidated statement of financial condition from which it has been derived.

/s/ Deloitte & Touche LLP

New York, New York

August 3, 2016

71

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Morgan Stanley, a financial holding company, is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley” or “us”, “we”, or “our” mean Morgan Stanley (the “Parent”) together with its consolidated subsidiaries.

A description of the clients and principal products and services of each of our business segments is as follows:

Institutional Securities provides investment banking, sales and trading and other services to corporations, governments, financial institutions, and high-to-ultra high net worth clients. Investment banking services comprise capital raising and financial advisory services, including services relating to the underwriting of debt, equity and other securities as well as advice on mergers and acquisitions, restructurings, real estate and project finance. Sales and trading services include sales, financing and market-making activities in equity securities and fixed income products, including foreign exchange and commodities, as well as prime brokerage services. Other services include corporate lending activities and credit products, investments and research.

Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small-to-medium sized businesses and institutions covering brokerage and investment advisory services, market-making activities in fixed income securities,

financial and wealth planning services, annuity and insurance products, credit and other lending products, banking and retirement plan services.

Investment Management provides a broad range of investment strategies and products that span geographies, asset classes, and public and private markets, to a diverse group of clients across institutional and intermediary channels. Strategies and products comprise equity, fixed income, liquidity and alternative / other products. Institutional clients include defined benefit/defined contribution pensions, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are serviced through intermediaries, including affiliated and non-affiliated distributors.

The results of operations in the past have been, and in the future may continue to be, materially affected by competition, risk factors, legislative, legal and regulatory developments, as well as other factors. These factors also may have an adverse impact on our ability to achieve our strategic objectives. Additionally, the discussion of our results of operations herein may contain forward-looking statements. These statements, which reflect management’s beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect our future results, see “Forward-Looking Statements” immediately preceding Part I, Item 1, “Business—Competition” and “Business—Supervision and Regulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”), “Business Segments—Wealth Management—Other Items,” and “Liquidity and Capital Resources” herein.

72

Executive Summary
Business Segment Financial Information and Other Statistical Data
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
	(dollars in millions, except where noted and per share amounts)
Net revenues:
Institutional Securities	$	4,578	$	5,172	$	8,292	$	10,630
Wealth Management		3,811		3,875		7,479		7,709
Investment Management		583		751		1,060		1,420
Intersegment Eliminations		(63)		(55)		(130)		(109)
Consolidated net revenues	$	8,909	$	9,743	$	16,701	$	19,650
Income from continuing operations applicable to Morgan Stanley:
Institutional Securities	$	992	$	1,089	$	1,586	$	2,844
Wealth Management		516		561		1,009		1,096
Investment Management		78		159		128		268
Income from continuing operations applicable to Morgan Stanley	$	1,586	$	1,809	$	2,723	$	4,208
Income (loss) from discontinued operations applicable to Morgan Stanley		(4)		(2)		(7)		(7)
Net income applicable to Morgan Stanley	$	1,582	$	1,807	$	2,716	$	4,201
Preferred stock dividend and other		157		142		235		222
Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
Earnings per basic common share(1)	$	0.76	$	0.87	$	1.32	$	2.07
Earnings per diluted common share(1)	$	0.75	$	0.85	$	1.30	$	2.03
Regional net revenues(2):
Americas	$	6,538	$	6,777	$	12,290	$	13,707
EMEA		1,312		1,436		2,441		3,198
Asia-Pacific		1,059		1,530		1,970		2,745
Net revenues	$	8,909	$	9,743	$	16,701	$	19,650
Effective income tax rate from continuing operations		33.5%		32.8%		33.4%		22.9%

	At June 30, 2016		At December 31, 2015
	(dollars in millions, except where noted and per share amounts)
Total loans(3)	$	93,165	$	85,759
Total assets	$	828,873	$	787,465
Global Liquidity Reserve managed by bank and non-bank legal entities(4):
Bank legal entities	$	91,062	$	94,328
Non-bank legal entities		116,393		108,936
Total	$	207,455	$	203,264
Total deposits	$	152,693	$	156,034
Long-term borrowings	$	163,492	$	153,768
Maturities of long-term borrowings outstanding (next 12 months)	$	24,244	$	22,396
Book value per common share(5)	$	36.29	$	35.24
Capital ratios (Transitional—Advanced)(6):
Common Equity Tier 1 capital ratio		16.8%		15.5%
Tier 1 capital ratio		18.8%		17.4%
Total capital ratio		22.4%		20.7%
Capital ratios (Transitional—Standardized)(6):
Tier 1 leverage ratio(7)		8.3%		8.3%
Worldwide employees		54,529		56,218

EMEA—Europe, Middle East and Africa

(1) For the calculation of basic and diluted earnings per common share, see Note 15 to the consolidated financial statements in Item 1.

(2) For a discussion of how the geographic breakdown for net revenues is determined, see Note 21 to the consolidated financial statements in Item 8 of the 2015 Form 10-K.

(3) Amounts include loans held for investment (net of allowance) and loans held for sale but exclude loans at fair value, which are included in Trading assets in the consolidated balance sheets (see Note 7 to the consolidated financial statements in Item 1).

(4) For a discussion of Global Liquidity Reserve, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework—Global Liquidity Reserve” in Part II, Item 7 of the 2015 Form 10-K.

(5) Book value per common share equals common shareholders’ equity of $69,596 million at June 30, 2016 and $67,662 million at December 31, 2015 divided by common shares outstanding of 1,918 million at June 30, 2016 and 1,920 million at December 31, 2015.

(6) For a discussion of our regulatory capital ratios, see “Liquidity and Capital Resources—Regulatory Requirements” herein.

(7) See Note 13 to the consolidated financial statements in Item 1 for information on the Tier 1 leverage ratio.

73

Overview of Financial Results

Consolidated Results for the Quarter Ended June 30, 2016

• We reported net revenues of $8,909 million in the quarter ended June 30, 2016 (“current quarter”), compared with $9,743 million in the quarter ended June 30, 2015 (“prior year quarter”). For the current quarter, net income applicable to Morgan Stanley was $1,582 million, or $0.75 per diluted common share, compared with income of $1,807 million, or $0.85 per diluted common share, in the prior year quarter.

• The prior year quarter included positive revenues due to the impact of debt valuation adjustments (“DVA”) of $182 million or $0.06 per diluted common share. Excluding DVA, net revenues were $9,561 million and net income applicable to Morgan Stanley was $1,688 million, or $0.79 per diluted common share, in the prior year quarter (see “Selected Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Information” herein).

• Effective January 1, 2016, we early adopted a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities that requires unrealized gains and losses from debt-related credit spreads and other credit factors to be presented in other comprehensive income (loss) (“OCI”) as opposed to Trading revenues. Results for 2015 are not restated pursuant to that guidance.

Consolidated Results for the Six Months Ended June 30, 2016

• We reported net revenues of $16,701 million in the six months ended June 30, 2016 (“current year period”), compared with $19,650 million in the six months ended June 30, 2015 (“prior year period”). For the current year period, net income applicable to Morgan Stanley was $2,716 million, or $1.30 per diluted common share, compared with income of $4,201 million, or $2.03 per diluted common share in the prior year period.

• The prior year period included a net discrete tax benefit of $564 million or $0.29 per diluted common share, primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated, and positive revenues associated with DVA of $307 million or $0.10 per diluted common share. For a further discussion of the net discrete tax benefit, see “Supplemental Financial Information and Disclosures— Income Tax Matters” herein.

• Net revenues excluding DVA were $19,343 million in the prior year period, while net income applicable to Morgan Stanley was $4,002 million excluding DVA, or

$1.93 per diluted common share excluding DVA, in the prior year period. Excluding both DVA and the net discrete tax benefit, net income applicable to Morgan Stanley was $3,438 million, or $1.64 per diluted common share, in the prior year period (see “Selected Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Information” herein).

Business Segment Net Revenues for the Current Quarter and Current Year Period

• Institutional Securities net revenues of $4,578 million in the current quarter and $8,292 million in the current year period decreased 11% and 22% from the comparable periods reflecting lower underwriting and sales and trading results, partly offset by continued strength in merger, acquisition and restructuring transactions (“M&A”) advisory.

• Wealth Management net revenues of $3,811 million in the current quarter and $7,479 million in the current year period decreased 2% and 3% from the comparable periods reflecting lower transactional revenues, partly offset by strong growth in net interest income.

• Investment Management net revenues of $583 million in the current quarter and $1,060 million in the current year period decreased 22% and 25% from the comparable periods reflecting lower investment gains and carried interest in infrastructure and private equity investments. Asset management fees were relatively unchanged from the comparable periods.

Consolidated Non-Interest Expenses for the Current Quarter and Current Year Period

• Compensation and benefits expenses of $4,015 million in the current quarter and $7,698 million in the current year period decreased 9% and 14% from $4,405 million in the prior year quarter and $8,929 million in the prior year period, primarily due to a decrease in discretionary incentive compensation driven mainly by lower revenues, a decrease in the formulaic payout to Wealth Management representatives linked to lower revenues, and a decrease in salaries due to lower headcount. In the current year period, compensation and benefits expenses also reflected a decrease in the fair value of deferred compensation plan referenced investments and carried interest.

• Non-compensation expenses were $2,411 million in the current quarter and $4,782 million in the current year period compared with $2,611 million in the prior year quarter and $5,139 million in the prior year period, representing an 8% and a 7% decrease, primarily due to lower litigation costs and expense reductions across Professional services, Marketing and business development and Occupancy and equipment.

74

Return on Average Common Equity

• The annualized return on average common equity was 8.3% in the current quarter and 7.2% in the current year period. For the prior year quarter, the annualized return on average common equity was 9.9%, or 9.1% excluding DVA. For the prior year period, the annualized return on average common equity was 12.0%, or 11.3% excluding DVA, and 9.6% excluding DVA and a net discrete tax benefit (see “Selected Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Information” herein).

Selected Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Information

We prepare our Consolidated Financial Statements using accounting principles generally accepted in the United States (“U.S. GAAP”). From time to time, we may disclose certain “non-GAAP financial measures” in the course of

our earnings releases, earnings and other conference calls, financial presentations and otherwise. A “non-GAAP financial measure” excludes, or includes, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by us are provided as additional information to investors and analysts in order to provide them with further transparency about, or as an alternative method for assessing, our financial condition, operating results or prospective regulatory capital requirements. These measures are not in accordance with, or a substitute for, U.S. GAAP and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the U.S. GAAP financial measure and the non-GAAP financial measure.

Non-GAAP Financial Measures by Business Segment

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in billions)
Pre-tax profit margin(1):
Institutional Securities		33%		31%		29%		32%
Wealth Management		23%		23%		22%		23%
Investment Management		20%		29%		15%		29%
Consolidated		28%		28%		25%		28%
Average common equity(2)(3):
Institutional Securities	$	43.2	$	35.3	$	43.2	$	36.1
Wealth Management		15.3		11.3		15.3		10.9
Investment Management		2.8		2.3		2.8		2.3
Parent(2)		7.7		18.3		7.3		17.0
Consolidated average common equity	$	69.0	$	67.2	$	68.6	$	66.3
Return on average common equity(2)(3):
Institutional Securities		8.0%		11.3%		6.4%		15.1%
Wealth Management		12.9%		18.2%		12.7%		18.4%
Investment Management		10.6%		27.7%		8.8%		23.5%
Consolidated		8.3%		9.9%		7.2%		12.0%

75

Reconciliation of Financial Measures from a U.S. GAAP to a Non-GAAP Basis

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in millions, except per share amounts)
Net revenues
Net revenues—U.S. GAAP	$	8,909	$	9,743	$	16,701	$	19,650
Impact of DVA(4)		—		(182)		—		(307)
Net revenues—non-GAAP	$	8,909	$	9,561	$	16,701	$	19,343
Net income applicable to Morgan Stanley
Net income applicable to Morgan Stanley—U.S. GAAP	$	1,582	$	1,807	$	2,716	$	4,201
Impact of DVA(4)		—		(119)		—		(199)
Net income applicable to Morgan Stanley, excluding DVA—non-GAAP	$	1,582	$	1,688	$	2,716	$	4,002
Impact of net discrete tax benefits(5)		—		—		—		(564)
Net income applicable to Morgan Stanley, excluding DVA and net discrete tax benefits—non-GAAP	$	1,582	$	1,688	$	2,716	$	3,438
Earnings per diluted common share
Earnings per diluted common share—U.S. GAAP	$	0.75	$	0.85	$	1.30	$	2.03
Impact of DVA(4)		—		(0.06)		—		(0.10)
Earnings per diluted common share, excluding DVA—non-GAAP	$	0.75	$	0.79	$	1.30	$	1.93
Impact of net discrete tax benefits(5)		—		—		—		(0.29)
Earnings per diluted common share, excluding DVA and net discrete tax benefits—non-GAAP	$	0.75	$	0.79	$	1.30	$	1.64
Effective income tax rate
Effective income tax rate from continuing operations—U.S. GAAP		33.5%		32.8%		33.4%		22.9%
Impact of net discrete tax benefits(5)		—		—		—		10.2%
Effective income tax rate from continuing operations—non-GAAP		33.5%		32.8%		33.4%		33.1%

76

Non-GAAP Financial Measures

Average common equity, return on average common equity, average tangible common equity, return on average tangible common equity and tangible book value per common share are all non-GAAP financial measures we consider to be useful measures to us, investors and analysts to assess capital adequacy and to allow better comparability of period-to-period operating performance. For a discussion of tangible common equity, see “Liquidity and Capital Resources—Tangible Equity” herein.

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(dollars in billions)
Average common equity(3)(6)
Average common equity	$	69.0	$	67.2	$	68.6	$	66.3
Average common equity, excluding DVA	$	69.1	$	67.9	$	68.7	$	67.1
Average common equity, excluding DVA and net discrete tax benefits	$	69.1	$	67.9	$	68.7	$	66.8
Return on average common equity(3)
Return on average common equity		8.3%		9.9%		7.2%		12.0%
Return on average common equity, excluding DVA		8.3%		9.1%		7.2%		11.3%
Return on average common equity, excluding DVA and net discrete tax benefits		8.3%		9.1%		7.2%		9.6%
Average tangible common equity(6)
Average tangible common equity	$	59.5	$	57.5	$	59.1	$	56.7
Average tangible common equity, excluding DVA	$	59.6	$	58.2	$	59.2	$	57.4
Average tangible common equity, excluding DVA and net discrete tax benefits	$	59.6	$	58.2	$	59.2	$	57.1
Return on average tangible common equity(7)
Return on average tangible common equity		9.6%		11.6%		8.4%		14.1%
Return on average tangible common equity, excluding DVA		9.6%		10.6%		8.4%		13.2%
Return on average tangible common equity, excluding DVA and net discrete tax benefits		9.6%		10.6%		8.4%		11.3%
	At June 30, 2016				At December 31, 2015
Tangible book value per common share(8)	$			31.39	$			30.26

DVA—Debt valuation adjustments represent the change in the fair value resulting from fluctuations in our credit spreads and other credit factors related to liabilities carried at fair value, primarily certain Long-term and Short-term borrowings.

(1) Pre-tax profit margin is a non-GAAP financial measure that we consider to be a useful measure to us, investors and analysts to assess operating performance and represents income from continuing operations before income taxes as a percentage of net revenues, which are two U.S. GAAP reported amounts without adjustment.

(2) Average common equity for each business segment is determined using our Required Capital framework, an internal capital adequacy measure (see “Liquidity and Capital Resources—Regulatory Requirements—Attribution of Average Common Equity according to the Required Capital Framework” herein). Each business segment’s return on average common equity equals net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity for that segment. Effective tax rates used in the computation are determined on a separate legal entity basis.

(3) Return on average common equity equals consolidated net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity. Effective January 1, 2016, as a result of the adoption of a provision of the accounting update related to DVA, we have redefined the calculation of the return on average common equity excluding DVA to adjust for DVA only in the denominator. Prior to January 1, 2016, for the return on average common equity, excluding DVA, and excluding DVA and net discrete tax benefits, both the numerator and denominator were adjusted to exclude those items.

(4) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains (losses) in the current quarter and current year period are recorded within OCI in the consolidated statements of comprehensive income. In the prior year quarter and prior year period, the DVA gains (losses) were recorded within Trading revenues in the consolidated statements of income. See Notes 2 and 14 to the consolidated financial statements in Item 1 for further information.

(5) For a discussion of our net discrete tax benefit, see “Supplemental Financial Information and Disclosures—Income Tax Matters” herein.

(6) The impact of DVA on average common equity and average tangible common equity was approximately $(106) million and $(714) million in the current quarter and prior year quarter, respectively. The impact of DVA on average common equity and average tangible common equity was approximately $(128) million and $(756) million in the current year period and prior year period, respectively. The impact of the net discrete tax benefit on average common equity and average tangible common equity was approximately $322 million in the prior year period.

(7) Return on average tangible common equity equals net income applicable to Morgan Stanley less preferred dividends as a percentage of average tangible common equity. Effective January 1, 2016, as a result of the adoption of a provision of the accounting update related to DVA, we have redefined the calculation of return on average tangible common equity excluding DVA to adjust for DVA only in the denominator. Prior to January 1, 2016, for the return on average tangible common equity, excluding DVA, and excluding DVA and net discrete tax benefits, both the numerator and the denominator were adjusted to exclude the impact of DVA and the impact of net discrete tax benefits. The impact of DVA was 1.0% and 0.9% in the prior year quarter and prior year period, respectively. The impact of the net discrete tax benefit was 1.9% in the prior year period.

(8) Tangible book value per common share equals tangible common equity of $60,185 million at June 30, 2016 and $58,098 million at December 31, 2015 divided by common shares outstanding of 1,918 million at June 30, 2016 and 1,920 million at December 31, 2015.

77

Return on Equity Target

We are aiming to improve our return to shareholders, and accordingly have established a target return on average common equity excluding DVA (“Return on Equity”) to be achieved by 2017, subject to the successful execution of our strategic objectives. For further information on our Return on Equity target and related assumptions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—Return on Equity Target” in Part II, Item 7 of the 2015 Form 10-K.

Business Segments

Substantially all of our operating revenues and operating expenses are directly attributable to the business segments. Certain revenues and expenses have been allocated to each business segment, generally in proportion to its respective net revenues, non-interest expenses or other relevant measures.

As a result of treating certain intersegment transactions as transactions with external parties, we include an Intersegment Eliminations category to reconcile the business segment results to our consolidated results.

Net Revenues

For discussions of our net revenues, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Net Revenues” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Net Revenues by Segment” in Part II, Item 7 of the 2015 Form 10-K.

Compensation Expense

For a discussion of our compensation expense, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Compensation Expense” in Part II, Item 7 of the 2015 Form 10-K.

78

INSTITUTIONAL SECURITIES

INCOME STATEMENT INFORMATION

	Three Months Ended						Six Months Ended						% Change
	June 30,						June 30,						From Prior Year Quarter		From Prior Year Period
	2016			2015			2016			2015
	(dollars in millions)
Revenues:
Investment banking		$	1,108		$	1,440		$	2,098		$	2,613		(23)%		(20)%
Trading			2,498			2,785			4,389			6,207		(10)%		(29)%
Investments			76			16			108			128		N/M		(16)%
Commissions and fees			607			683			1,262			1,356		(11)%		(7)%
Asset management, distribution and administration fees			69			69			142			145		0%		(2)%
Other			138			212			142			302		(35)%		(53)%
Total non-interest revenues			4,496			5,205			8,141			10,751		(14)%		(24)%
Interest income			966			723			2,019			1,593		34%		27%
Interest expense			884			756			1,868			1,714		17%		9%
Net interest			82			(33)			151			(121)		N/M		N/M
Net revenues			4,578			5,172			8,292			10,630		(11)%		(22)%
Compensation and benefits			1,625			1,897			3,007			3,923		(14)%		(23)%
Non-compensation expenses			1,447			1,653			2,871			3,272		(12)%		(12)%
Total non-interest expenses			3,072			3,550			5,878			7,195		(13)%		(18)%
Income from continuing operations before income taxes			1,506			1,622			2,414			3,435		(7)%		(30)%
Provision for income taxes			453			511			728			517		(11)%		41%
Income from continuing operations			1,053			1,111			1,686			2,918		(5)%		(42)%
Income (loss) from discontinued operations, net of income taxes			(4)			(2)			(7)			(7)		N/M		0%
Net income			1,049			1,109			1,679			2,911		(5)%		(42)%
Net income applicable to noncontrolling interests			61			22			100			74		N/M		35%
Net income applicable to Morgan Stanley		$	988		$	1,087		$	1,579		$	2,837		(9)%		(44)%

N/M—Not Meaningful

79

Investment Banking

Investment Banking Revenues

	Three Months Ended						Six Months Ended						% Change
	June 30,						June 30,						From Prior Year Quarter		From Prior Year Period
	2016			2015			2016			2015
	(dollars in millions)
Advisory revenues		$	497		$	423		$	1,088		$	894		17%		22%
Underwriting revenues:
Equity underwriting revenues			266			489			426			796		(46)%		(46)%
Fixed income underwriting revenues			345			528			584			923		(35)%		(37)%
Total underwriting revenues			611			1,017			1,010			1,719		(40)%		(41)%
Total investment banking revenues		$	1,108		$	1,440		$	2,098		$	2,613		(23)%		(20)%

Investment Banking Volumes

	Three Months Ended June 30,						Six Months Ended June 30,
	2016(1)			2015(1)			2016(1)			2015(1)
	(dollars in billions)
Completed mergers and acquisitions(2)		$	235		$	137		$	526		$262
Equity and equity-related offerings(3)			14			20			22		39
Fixed income offerings(4)			63			73			114		147

(1) Source: Thomson Reuters, data at July 1, 2016. Completed mergers and acquisitions volumes are based on full credit to each of the advisors in a transaction. Equity and equity-related offerings and fixed income offerings are based on full credit for single book managers and equal credit for joint book managers. Transaction volumes may not be indicative of net revenues in a given period. In addition, transaction volumes for prior periods may vary from amounts previously reported due to the subsequent withdrawal or change in the value of a transaction.

(2) Amounts include transactions of $100 million or more.

(3) Amounts include Rule 144A issuances and registered public offerings of common stock and convertible securities and rights offerings.

(4) Amounts include non-convertible preferred stock, mortgage-backed and asset-backed securities, and taxable municipal debt. Amounts include publicly registered and Rule 144A issues. Amounts exclude leveraged loans and self-led issuances.

Investment banking revenues are composed of fees from advisory services and revenues from the underwriting of securities offerings and syndication of loans, net of syndication expenses.

Investment banking revenues of $1,108 million in the current quarter and $2,098 million in the current year period decreased 23% and 20% from the comparable periods due to lower underwriting revenues, partially offset by higher advisory revenues.

• Advisory revenues increased in the current quarter and current year period due to higher completed M&A activity (see Investment Banking Volumes table).

• Equity underwriting revenues decreased as a result of significantly lower market volumes in both initial public offerings (“IPO”) and follow on offerings, while Fixed income underwriting revenues decreased primarily due to lower bond and loan fees.

80

Sales and Trading Net Revenues

Sales and Trading Net Revenues

	Three Months Ended June 30,				Six Months Ended June 30,				% Change
									From Prior Year Quarter		From Prior Year Period
	2016		2015		2016		2015
	(dollars in millions)
Trading	$	2,498	$	2,785	$	4,389	$	6,207		(10)%		(29)%
Commissions and fees		607		683		1,262		1,356		(11)%		(7)%
Asset management, distribution and administration fees		69		69		142		145		0%		(2)%
Net interest		82		(33)		151		(121)		N/M		N/M
Total sales and trading net revenues	$	3,256	$	3,504	$	5,944	$	7,587		(7)%		(22)%

N/M—Not Meaningful

Sales and Trading Net Revenues by Business

	Three Months Ended June 30,				Six Months Ended June 30,				% Change
									From Prior Year Quarter		From Prior Year Period
	2016		2015		2016		2015
	(dollars in millions)
Equity	$	2,145	$	2,342	$	4,201	$	4,635		(8)%		(9)%
Fixed income and commodities		1,297		1,377		2,170		3,380		(6)%		(36)%
Other		(186)		(215)		(427)		(428)		13%		0%
Total sales and trading net revenues	$	3,256	$	3,504	$	5,944	$	7,587		(7)%		(22)%

Sales and Trading Net Revenues, Excluding DVA in 2015

Sales and trading net revenues, including equity and fixed income and commodities sales and trading net revenues that exclude the impact of DVA in 2015, are non-GAAP financial measures that we consider useful for us, investors and analysts to allow further comparability of period-to-period operating performance.

	Three Months Ended June 30,				Six Months Ended June 30,				% Change
									From Prior Year Quarter		From Prior Year Period
	2016		2015		2016		2015
	(dollars in millions)
Total sales and trading net revenues—U.S. GAAP	$	3,256	$	3,504	$	5,944	$	7,587		(7)%		(22)%
Impact of DVA(1)		—		(182)		—		(307)		(100)%		(100)%
Total sales and trading net revenues—non-GAAP	$	3,256	$	3,322	$	5,944	$	7,280		(2)%		(18)%
Equity sales and trading net revenues—U.S. GAAP	$	2,145	$	2,342	$	4,201	$	4,635		(8)%		(9)%
Impact of DVA(1)		—		(72)		—		(97)		(100)%		(100)%
Equity sales and trading net revenues—non-GAAP	$	2,145	$	2,270	$	4,201	$	4,538		(6)%		(7)%
Fixed income and commodities sales and trading net revenues—U.S. GAAP	$	1,297	$	1,377	$	2,170	$	3,380		(6)%		(36)%
Impact of DVA(1)		—		(110)		—		(210)		(100)%		(100)%
Fixed income and commodities sales and trading net revenues—non-GAAP	$	1,297	$	1,267	$	2,170	$	3,170		2%		(32)%

(1) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains (losses) in the current quarter and current year period are recorded within OCI in the consolidated statements of comprehensive income. In the prior year quarter and prior year period, the DVA gains (losses) were recorded within Trading revenues in the consolidated statements of income. See Notes 2 and 14 to the consolidated financial statements in Item 1 for further information.

81

Sales and Trading Net Revenues during the Current Quarter

Equity

• Equity sales and trading net revenues were $2,145 million, a decrease from the strong comparable period reflecting significantly reduced volumes and levels of client engagement in Asia, partly offset by improved performance in Europe and the U.S.

Fixed Income and Commodities

• Fixed income and commodities net revenues of $1,297 million decreased from the comparable period. The prior year quarter results included positive DVA revenues of $110 million. Excluding the impact of DVA, fixed income and commodities net revenues were essentially flat with the prior year quarter. Results primarily reflected an improved credit market environment and improved revenues from structured transactions in natural gas and power, substantially offset by lower results from counterparty risk management activities in the current quarter and the positive impact of a rating upgrade in the prior year quarter, and the absence of revenues from the global oil merchanting business, which was sold on November 1, 2015. For more information on the sale of the global oil merchanting business, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Business Segments — Institutional Securities — Investments, Other Revenues, Non-interest Expenses, Income Tax Items, Dispositions and Other Items — 2015 Compared with 2014 — Dispositions” in Part II, Item 7 of the 2015 Form 10-K.

Sales and Trading Net Revenues during the Current Year Period

Equity

• Equity sales and trading net revenues were $4,201 million, a decrease from the strong comparable period primarily reflecting declines in Asia across all products from reduced volumes.

Fixed Income and Commodities

• Fixed income and commodities net revenues of $2,170 million decreased from the comparable period. In the prior year period, fixed income and commodities results included positive DVA revenues of $210 million. Excluding the impact of DVA, fixed income and commodities net revenues were lower in the current year period as compared with the prior year period primarily reflecting lower results in interest rate products and foreign exchange, a challenging credit environment early in the current year period, lower commodities results due to the absence of revenues from the global oil merchanting business, as discussed herein, and the depressed energy price environment in the first quarter of 2016.

Investments, Other Revenues, Non-interest Expenses and Other Items

Investments

• Net investment gains of $76 million in the current quarter increased from the comparable period primarily reflecting higher gains on business related investments.

• Net investment gains of $108 million in the current year period decreased from the comparable period primarily reflecting losses on investments associated with our compensation plans and lower gains on principal investments in real estate, partly offset by higher gains on business related investments.

Other

• Other revenues of $138 million in the current quarter and $142 million in the current year period decreased 35% and 53% from the comparable periods primarily due to lower results related to our 40% stake in Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”) (see Note 8 to the consolidated financial statements in Item 1 for further information). In the current year period, other revenues also decreased from the comparable period due to an increase in the allowance for losses on loans held for investment.

Non-interest Expenses

Non-interest expenses of $3,072 million in the current quarter and $5,878 million in the current year period decreased 13% and 18% from the comparable periods driven by a 14% and 23% reduction in Compensation and benefits expenses and a 12% reduction in both periods in Non-compensation expenses.

• Compensation and benefits expenses decreased in the current quarter and current year period primarily due to a decrease in discretionary incentive compensation driven mainly by lower revenues and a decrease in salaries due to lower headcount. In the current year period, Compensation and benefits expenses also reflected a decrease in the fair value of deferred compensation plan referenced investments.

• Non-compensation expenses decreased in the current quarter and current year period primarily due to lower litigation costs, transaction related expenses in Asia and expense reductions across Professional services, Marketing and business development and Occupancy and equipment.

Noncontrolling Interests

Noncontrolling interests primarily relate to Mitsubishi UFJ Financial Group, Inc.’s interest in Morgan Stanley MUFG Securities Co., Ltd. (“MSMS”).

82

WEALTH MANAGEMENT

INCOME STATEMENT INFORMATION

	Three Months Ended June 30,				Six Months Ended June 30,				% Change
									From Prior   Year Quarter		From Prior Year Period
	2016		2015		2016		2015
	(dollars in millions)
Revenues:
Investment banking	$	123	$	186	$	244	$	378		(34)%		(35)%
Trading		252		196		446		428		29%		4%
Investments		—		13		(2)		15		N/M		N/M
Commissions and fees		423		490		835		1,016		(14)%		(18)%
Asset management, distribution and administration fees		2,082		2,174		4,136		4,289		(4)%		(4)%
Other		102		79		160		157		29%		2%
Total non-interest revenues		2,982		3,138		5,819		6,283		(5)%		(7)%
Interest income		920		782		1,834		1,519		18%		21%
Interest expense		91		45		174		93		102%		87%
Net interest		829		737		1,660		1,426		12%		16%
Net revenues		3,811		3,875		7,479		7,709		(2)%		(3)%
Compensation and benefits		2,152		2,200		4,240		4,425		(2)%		(4)%
Non-compensation expenses		800		790		1,594		1,544		1%		3%
Total non-interest expenses		2,952		2,990		5,834		5,969		(1)%		(2)%
Income from continuing operations before income taxes		859		885		1,645		1,740		(3)%		(5)%
Provision for income taxes		343		324		636		644		6%		(1)%
Net income applicable to Morgan Stanley	$	516	$	561	$	1,009	$	1,096		(8)%		(8)%

N/M – Not Meaningful

83

Statistical Data

Financial Information and Statistical Data (dollars in billions, except where noted)

					At June 30, 2016		At December 31, 2015
Client assets					$	2,034	$	1,985
Fee-based client assets(1)					$	820	$	795
Fee-based client assets as a percentage of total client assets						40%		40%
Client liabilities(2)					$	69	$	64
Bank deposit program					$	150	$	149
Investment securities portfolio					$	64.6	$	57.9
Loans and lending commitments					$	61.3	$	55.3
Wealth Management representatives						15,909		15,889
Retail locations						609		608
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Annualized revenues per representative (dollars in thousands)(3)	$	959	$	978	$	941	$	968
Client assets per representative (dollars in millions)(4)	$	128	$	129	$	128	$	129
Fee-based asset flows(5)	$	12.0	$	13.9	$	17.9	$	27.2

(1) Fee-based client assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.

(2) Client liabilities include securities-based and tailored lending, home loans and margin lending.

(3) Annualized revenues per representative equal the Wealth Management business segment’s annualized revenues divided by the average representative headcount.

(4) Client assets per representative equal total period-end client assets divided by period-end representative headcount.

(5) Fee-based asset flows include net new fee-based assets, net account transfers, dividends, interest and client fees and exclude cash management-related activity.

Net Revenues

Transactional Revenues

	Three Months Ended June 30,				Six Months Ended June 30,				% Change
									From Prior Year Quarter		From Prior Year Period
	2016		2015		2016		2015
	(dollars in millions)
Investment banking	$	123	$	186	$	244	$	378		(34)%		(35)%
Trading		252		196		446		428		29%		4%
Commissions and fees		423		490		835		1,016		(14)%		(18)%
Transactional revenues	$	798	$	872	$	1,525	$	1,822		(8)%		(16)%

Transactional revenues of $798 million in the current quarter and $1,525 million in the current year period decreased 8% and 16% from the comparable periods due to lower revenues in Investment banking and Commissions and fees, partially offset by higher revenues in Trading.

• Investment banking revenues decreased in the current quarter and current year period primarily due to reduced levels of underwriting volumes driven by lower levels of new issue activity.

• Trading revenues increased in the current quarter primarily due to gains related to investments associated with certain employee deferred compensation plans and higher revenues from fixed income products. The increase in the current year period was primarily due to higher revenues from fixed income, partially offset by

losses related to investments associated with certain employee deferred compensation plans.

• Commissions and fees decreased in the current quarter and current year period reflected lower daily average commissions primarily due to reduced client activity in equity, mutual fund and annuity products.

Asset Management

• Asset management, distribution and administration fees of $2,082 million in the current quarter and $4,136 million in the current year period decreased in both periods 4% from the comparable periods primarily due to lower fees from mutual funds reflecting the impact of lower average asset levels and lower average fee rates related to fee-based accounts, partially offset by positive flows (see “Fee-Based Client Assets Activity and Average Fee Rate by Account Type” herein).

84

Net Interest

• Net interest of $829 million in the current quarter and $1,660 million in the current year period increased 12% and 16% from the comparable periods primarily due to higher loan and investment securities balances which were funded by higher average deposits.

Other

• Other revenues of $102 million in the current quarter increased 29% from the comparable period, due to higher realized gains from the available for sale (“AFS”) securities portfolio. Other revenues of $160 million in the current year period were relatively unchanged from the comparable period.

Non-interest Expenses

Non-interest expenses of $2,952 million in the current quarter and $5,834 million in the current year period decreased 1% and 2% from the comparable periods.

• Compensation and benefits expenses were relatively unchanged in the current quarter. Compensation and benefits expenses decreased in the current year period primarily due to the decrease in formulaic payout to Wealth

Management representatives driven by lower net revenues and a decrease in the fair value of deferred compensation plan referenced investments.

• Non-compensation expenses increased in the current quarter due to higher litigation costs, partially offset by lower Federal Deposit Insurance Corporation (“FDIC”) assessment on deposits. Non-compensation expenses increased in the current year period primarily due to higher litigation costs and professional services fees.

Other Items

U.S. Department of Labor Conflict of Interest Rule

In April 2016, the U.S. Department of Labor adopted a conflict of interest rule under the Employee Retirement Income Security Act of 1974 that broadens the circumstances under which a firm is considered a fiduciary when transacting with retail investment accounts and sets forth requirements to ensure that advice given by broker-dealers acting as investment advice fiduciaries is impartial. The new fiduciary standard for investment advice will apply on April 10, 2017 and full compliance is required by January 1, 2018. While we are still assessing the impact of the final rule, given the breadth and scale of our platform and continued investment in technology and infrastructure, we believe that we will be able to provide compliant solutions to meet our clients’ investment needs (see also “Business—Supervision and Regulation—Institutional Securities and Wealth Management—Broker-Dealer and Investment Adviser Regulation” in Part I, Item 1 of the 2015 Form 10-K).

Fee-Based Client Assets Activity and Average Fee Rate by Account Type

For a description of fee-based client assets, including descriptions for the fee based client asset types and rollforward items in the following tables, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Wealth Management—Fee-Based Client Assets” in Part II, Item 7 of the 2015 Form 10-K.

	At March 31, 2016		Inflows		Outflows		Market Impact		At June 30, 2016		Average for the Three Months June 30, 2016
											Fee Rate
	(dollars in billions)										(in bps)
Separately managed accounts(1)	$	278	$	9	$	(7)	$	(1)	$	279	31
Unified managed accounts		112		11		(5)		2		120	109
Mutual fund advisory		24		—		(1)		—		23	121
Representative as advisor		114		8		(8)		3		117	88
Representative as portfolio manager		255		17		(12)		5		265	101
Subtotal	$	783	$	45	$	(33)	$	9	$	804	74
Cash management		15		4		(3)		—		16	6
Total fee-based client assets	$	798	$	49	$	(36)	$	9	$	820	73

85

	At March 31, 2015		Inflows		Outflows		Market Impact		At June 30, 2015		Average for the   Three Months Ended   June 30, 2015
											Fee Rate
	(dollars in billions)										(in bps)
Separately managed accounts(1)	$	287	$	13	$	(7)	$	1	$	294	34
Unified managed accounts		99		8		(4)		—		103	114
Mutual fund advisory		30		1		(2)		—		29	121
Representative as advisor		121		8		(8)		(1)		120	89
Representative as portfolio manager		250		16		(11)		(2)		253	104
Subtotal	$	787	$	46	$	(32)	$	(2)	$	799	77
Cash management		16		2		(4)		—		14	6
Total fee-based client assets	$	803	$	48	$	(36)	$	(2)	$	813	75

	At December 31, 2015		Inflows		Outflows		Market Impact		At June 30, 2016		Average for the   Six Months Ended   June 30, 2016
											Fee Rate
	(dollars in billions)										(in bps)
Separately managed accounts(1)	$	283	$	17	$	(17)	$	(4)	$	279	32
Unified managed accounts		105		21		(9)		3		120	109
Mutual fund advisory		25		1		(3)		—		23	121
Representative as advisor		115		13		(14)		3		117	88
Representative as portfolio manager		252		31		(22)		4		265	102
Subtotal	$	780	$	83	$	(65)	$	6	$	804	74
Cash management		15		7		(6)		—		16	6
Total fee-based client assets	$	795	$	90	$	(71)	$	6	$	820	73

	At December 31, 2014		Inflows		Outflows		Market Impact		At June 30, 2015		Average for the   Six Months Ended   June 30, 2015
											Fee Rate
	(dollars in billions)										(in bps)
Separately managed accounts(1)	$	285	$	23	$	(14)	$	—	$	294	35
Unified managed accounts		93		15		(7)		2		103	114
Mutual fund advisory		31		1		(3)		—		29	121
Representative as advisor		119		16		(15)		—		120	89
Representative as portfolio manager		241		31		(20)		1		253	104
Subtotal	$	769	$	86	$	(59)	$	3	$	799	77
Cash management		16		3		(5)		—		14	6
Total fee-based client assets	$	785	$	89	$	(64)	$	3	$	813	75

bps—Basis points

(1) Includes non-custody account values reflecting prior quarter-end balances due to a lag in the reporting of asset values by third-party custodians.

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INVESTMENT MANAGEMENT

INCOME STATEMENT INFORMATION

	Three Months Ended June 30,				Six Months Ended June 30,				% Change
									From Prior  Year Quarter		From Prior   Year Period
	2016		2015		2016		2015
	(dollars in millions)
Revenues:
Investment banking	$	—	$	—	$	1	$	—		—		N/M
Trading		5		(6)		(5)		(3)		N/M		(67)%
Investments		50		232		(14)		384		(78)%		N/M
Commissions and fees		—		—		3		—		—		N/M
Asset management, distribution and administration fees		517		522		1,043		1,036		(1)%		1%
Other		9		9		31		14		—		121%
Total non-interest revenues		581		757		1,059		1,431		(23)%		(26)%
Interest income		3		—		4		1		N/M		N/M
Interest expense		1		6		3		12		(83)%		(75)%
Net interest		2		(6)		1		(11)		N/M		N/M
Net revenues		583		751		1,060		1,420		(22)%		(25)%
Compensation and benefits		238		308		451		581		(23)%		(22)%
Non-compensation expenses		227		223		447		432		2%		3%
Total non-interest expenses		465		531		898		1,013		(12)%		(11)%
Income from continuing operations before income taxes		118		220		162		407		(46)%		(60)%
Provision for income taxes		37		59		47		120		(37)%		(61)%
Income from continuing operations		81		161		115		287		(50)%		(60)%
Net income		81		161		115		287		(50)%		(60)%
Net income applicable to noncontrolling interests		3		2		(13)		19		50%		N/M
Net income applicable to Morgan Stanley	$	78	$	159	$	128	$	268		(51)%		(52)%

N/M – Not Meaningful

87

Net Revenues

Investments

• Investments gains of $50 million in the current quarter and losses of $14 million in the current year period compared with gains of $232 million and $384 million in the comparable periods, reflected lower investment gains and carried interest in infrastructure and private equity investments. Investments losses in the current year period also reflect the reversal of previously accrued carried interest.

Asset Management, Distribution and Administration Fees

• Asset management, distribution and administration fees of $517 million in the current quarter and $1,043 million in the current year period were relatively unchanged from the comparable periods, as asset class balances and fee rates remained stable.

Non-interest Expenses

Non-interest expenses of $465 million in the current quarter and $898 million in the current year period decreased 12% and 11% from the comparable periods primarily due to lower Compensation and benefit expenses.

• Compensation and benefits expenses decreased in the current quarter and current year period primarily due to the decrease in deferred compensation associated with carried interest and the decrease in discretionary incentive compensation driven by lower revenues.

Assets Under Management or Supervision

Effective in the second quarter of 2016, the presentation of assets under management or supervision (“AUM”) for Investment Management has been revised to better align asset classes with its present organizational structure. With this change, the Alternative / Other products asset class now includes products in fund of funds, real estate, private equity and credit strategies, as well as multi-asset portfolios. All prior period information has been recast in the new format.

Assets Under Management or Supervision and Average Fee Rate by Asset Class

For a description of the rollforward items in the following tables, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Investment Management—Statistical Data” in Part II, Item 7 of the 2015 Form 10-K.

	At March 31, 2016		Inflows		Outflows		Distributions		Market Impact		Foreign Currency Impact		At   June 30,   2016		Average for the   Three Months Ended   June 30, 2016
															Total AUM		Fee Rate
	(dollars in billions)																(in bps)
Equity	$	81	$	5	$	(6)	$	—	$	1	$	—	$	81	$	81		74
Fixed income		62		7		(8)		—		—		—		61		61		32
Liquidity		146		291		(289)		—		1		—		149		146		19
Alternative / Other products		116		9		(10)		(1)		1		—		115		116		74
Total assets under management or supervision	$	405	$	312	$	(313)	$	(1)	$	3	$	—	$	406	$	404		48
Shares of minority stake assets		8												8		8

88

	At March 31, 2015		Inflows		Outflows		Distributions		Market Impact		Foreign Currency Impact		At June 30, 2015		Average for the Three Months Ended June 30, 2015
															Total AUM		Fee Rate
	(dollars in billions)																(in bps)
Equity	$	98	$	3	$	(7)	$	—	$	2	$	—	$	96	$	98		71
Fixed income		65		6		(6)		—		(1)		—		64		65		33
Liquidity		131		306		(305)		—		—		—		132		131		9
Alternative / Other products		112		6		(5)		(2)		(1)		1		111		112		81
Total assets under management or supervision	$	406	$	321	$	(323)	$	(2)	$	—	$	1	$	403	$	406		47
Shares of minority stake assets		7												7		7

	At December 31, 2015		Inflows		Outflows		Distributions		Market Impact		Foreign Currency Impact		At June 30, 2016		Average for the Six Months Ended June 30, 2016
															Total AUM		Fee Rate
	(dollars in billions)																(in bps)
Equity	$	83	$	10	$	(12)	$	—	$	—	$	—	$	81	$	80		73
Fixed income		60		12		(14)		—		2		1		61		60		32
Liquidity		149		627		(627)		—		—		—		149		148		18
Alternative / Other products		114		14		(14)		(1)		1		1		115		115		77
Total assets under management or supervision	$	406	$	663	$	(667)	$	(1)	$	3	$	2	$	406	$	403		48
Shares of minority stake assets		8												8		8

	At December 31, 2014		Inflows		Outflows		Distributions		Market Impact		Foreign Currency Impact		At June 30, 2015		Average for the Six Months Ended June 30, 2015
															Total AUM		Fee Rate
	(dollars in billions)																(in bps)
Equity	$	99	$	7	$	(14)	$	—	$	5	$	(1)	$	96	$	99		70
Fixed income		65		12		(11)		—		—		(2)		64		65		32
Liquidity		128		589		(585)		—		—		—		132		129		9
Alternative / Other products		111		11		(10)		(2)		1		—		111		112		80
Total assets under management or supervision	$	403	$	619	$	(620)	$	(2)	$	6	$	(3)	$	403	$	405		47
Shares of minority stake assets		7												7		7

bps—Basis points

89

Supplemental Financial Information and Disclosures

U.S. Bank Subsidiaries

We provide loans to a variety of customers, from large corporate and institutional clients to high net worth individuals, primarily through our U.S. bank subsidiaries, Morgan Stanley Bank, N.A. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA”) (collectively, “U.S. Bank Subsidiaries”). The lending activities in the Institutional Securities business segment primarily include loans or lending commitments to corporate clients. The lending activities in the Wealth Management business segment primarily include securities-based lending that

allows clients to borrow money against the value of qualifying securities and also include residential real estate loans. We expect our lending activities to continue to grow through further penetration of the Wealth Management business segments’ client base. For a further discussion of our credit risks, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk” in Item 3. For further discussion about loans and lending commitments, see Notes 7 and 11 to the consolidated financial statements in Item 1.

U.S. Bank Subsidiaries’ Supplemental Financial Information Excluding Transactions with Affiliated Entities

	At June 30, 2016		At December 31, 2015
	(dollars in billions)
U.S. Bank Subsidiaries assets	$	175.1	$	174.2
U.S. Bank Subsidiaries investment securities portfolio(1)		64.6		57.9
Wealth Management U.S. Bank Subsidiaries data:
Securities-based lending and other loans(2)	$	31.4	$	28.6
Residential real estate loans		22.7		20.9
Total	$	54.1	$	49.5
Institutional Securities U.S. Bank Subsidiaries data:
Corporate loans	$	21.2	$	22.9
Wholesale real estate loans		8.9		8.9
Total	$	30.1	$	31.8

(1) The U.S. Bank Subsidiaries investment securities portfolio includes AFS investment securities of $54.2 billion at June 30, 2016 and $53.0 billion at December 31, 2015. The remaining balance represents held to maturity investment securities of $10.4 billion at June 30, 2016 and $4.9 billion at December 31, 2015.

(2) Other loans primarily include tailored lending.

Income Tax Matters

The effective tax rate from continuing operations was 33.5% and 33.4% for the current quarter and current year period, respectively.

The effective tax rate from continuing operations was 32.8% and 22.9% for the prior year quarter and prior year period, respectively. The results for prior year period included a net discrete tax benefit of $564 million, primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated due to an internal restructuring to simplify our legal entity organization in the U.K. Excluding this net discrete tax benefit, the effective tax rate from continuing operations for the prior year period would have been 33.1%.

90

Accounting Development Updates

The Financial Accounting Standards Board (the “FASB”) issued the following accounting updates which apply to us.

The following accounting updates are not expected to have a material impact in the consolidated financial statements:

• Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This guidance is effective as of January 1, 2017.

• Improvements to Employee Share-Based Payment Accounting. This guidance is effective as of January 1, 2017.

• Contingent Put and Call Options in Debt Instruments. This guidance is effective as of January 1, 2017.

• Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance is effective as of January 1, 2018. On January 1, 2016, we early adopted a specific provision of the accounting update (see Note 2 to the consolidated financial statements in Item 1), with the remainder to be adopted on January 1, 2018.

The following accounting update will not have a material impact in the consolidated financial statements:

• Simplifying the Transition to the Equity Method of Accounting.

The following accounting updates are currently being evaluated to determine the potential impact of adoption:

• Financial Instruments – Credit Losses. This accounting update impacts the impairment model for certain financial assets measured at amortized cost such as loans held for investment and held to maturity debt securities. The amendments in this update will accelerate the recognition of credit losses by replacing the incurred loss impairment methodology with a current expected credit loss (“CECL”) methodology that requires an estimate of expected credit losses over the entire life of the financial asset. Additionally, although the CECL methodology will not apply to AFS debt securities, the update will require establishment of an allowance to reflect impairment of these securities, thereby eliminating the concept of a permanent write-down. This update is effective as of

January 1, 2020, with early adoption permitted as of January 1, 2019.

• Leases. This accounting update requires lessees to recognize all leases with terms exceeding one year on the balance sheet which results in the recognition of a right of use asset and corresponding lease liability, including for those leases which we currently classify as operating leases. The right of use asset and lease liability will initially be measured using the present value of the remaining rental payments. The accounting for leases where we are the lessor is largely unchanged. This update is effective as of January 1, 2019 with early adoption permitted.

• Revenue from Contracts with Customers. This accounting update aims to clarify the principles of revenue recognition, to develop a common revenue recognition standard across all industries for U.S. GAAP and International Financial Reporting Standards and to provide enhanced disclosures for users of the financial statements. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update is effective as of January 1, 2018, with early adoption permitted as of January  1, 2017.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which require us to make estimates and assumptions (see Note 1 to the consolidated financial statements in Item 1). We believe that of our significant accounting policies (see Note 2 to the consolidated financial statements in Item 8 of the 2015 Form 10-K and Note 2 to the consolidated financial statements in Item 1), the fair value, goodwill and intangible assets, legal and regulatory contingencies and income taxes policies involve a higher degree of judgment and complexity. For a further discussion about our critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in Part II, Item 7 of the 2015 Form 10-K.

91

Liquidity and Capital Resources

Senior management establishes liquidity and capital policies. Through various risk and control committees, senior management reviews business performance relative to these policies, monitors the availability of alternative sources of financing, and oversees the liquidity, interest rate and currency sensitivity of our asset and liability position. The Treasury Department, Firm Risk Committee, Asset and Liability Management Committee, and other committees and control groups assist in evaluating, monitoring and controlling the impact that our business activities have on our consolidated balance sheets, liquidity and capital structure. Liquidity and capital matters are reported regularly to the Board and the Board’s Risk Committee.

The Balance Sheet

We monitor and evaluate the composition and size of our balance sheet on a regular basis. Our balance sheet management process includes quarterly planning, business-specific thresholds, monitoring of business-specific usage versus key performance metrics and new business impact assessments.

We establish balance sheet thresholds at the consolidated, business segment and business unit levels. We monitor balance sheet utilization and review variances resulting from business activity or market fluctuations. On a regular basis, we review current performance versus established thresholds and assess the need to re-allocate our balance sheet based on business unit needs. We also monitor key metrics, including asset and liability size, composition of the balance sheet and capital usage.

Total Assets by Business Segment

	At June 30, 2016
	Institutional Securities		Wealth     Management		Investment     Management		Total
	(dollars in millions)
Assets
Cash and cash equivalents	$	33,333	$	22,757	$	43	$	56,133
Trading assets, at fair value		252,857		1,175		2,762		256,794
Investment securities		15,495		64,649		—		80,144
Securities purchased under agreements to resell		93,310		4,279		—		97,589
Securities borrowed		130,812		469		—		131,281
Customer and other receivables		30,720		21,597		510		52,827
Loans, net of allowance		38,898		54,267		—		93,165
Other assets(1)		45,948		13,608		1,384		60,940
Total assets	$	641,373	$	182,801	$	4,699	$	828,873
	At December 31, 2015
	Institutional Securities		Wealth Management		Investment Management		Total
	(dollars in millions)
Assets
Cash and cash equivalents	$	22,356	$	31,216	$	511	$	54,083
Trading assets, at fair value		236,174		883		2,448		239,505
Investment securities		14,124		57,858		1		71,983
Securities purchased under agreements to resell		83,205		4,452		—		87,657
Securities borrowed		141,971		445		—		142,416
Customer and other receivables		23,390		21,406		611		45,407
Loans, net of allowance		36,237		49,522		—		85,759
Other assets(1)		45,257		13,926		1,472		60,655
Total assets	$	602,714	$	179,708	$	5,043	$	787,465

(1) Other assets primarily includes Cash deposited with clearing organizations or segregated under federal and other regulations or requirements; Other investments; Premises, equipment and software costs; Goodwill; Intangible assets and deferred tax assets.

92

A substantial portion of total assets consists of liquid marketable securities and short-term receivables arising principally from sales and trading activities in the Institutional Securities business segment. The liquid nature of these assets provides us with flexibility in managing the size of our balance sheet. Total assets increased to $829 billion at June 30, 2016 from $787 billion at December 31, 2015, due to increases in Trading assets, primarily U.S. government agency securities whose valuations increased as U.S. Treasury yields reached multiyear lows in the wake of the U.K. referendum. Other sovereign government obligations and over-the-counter (“OTC”) derivative contracts were also driven higher by interest rate and foreign exchange rate volatility which were also partly driven by the U.K. Referendum. See “U.K. Referendum” herein.

Securities Repurchase Agreements and Securities Lending

Securities borrowed or securities purchased under agreements to resell and securities loaned or securities sold under agreements to repurchase are treated as collateralized financings (see Notes 2 and 6 to the consolidated financial statements in Item 1).

Collateralized Financing Transactions and Average Balances

	At June 30,         2016		At December 31,         2015
	(dollars in millions)
Securities purchased under agreements to resell and Securities borrowed	$	228,870	$	230,073
Securities sold under agreements to repurchase and Securities loaned	$	67,569	$	56,050

	Average Balance Three Months Ended             June 30, 2016
	(dollars in millions)
Securities purchased under agreements to resell and Securities borrowed	$	240,086
Securities sold under agreements to repurchase and Securities loaned	$	63,141

Securities purchased under agreements to resell and Securities borrowed period-end balances at June 30, 2016 were lower than the average balance during the current quarter driven by a general decrease in requirements for collateral and a reduction in short positions. Securities sold under agreements to repurchase and Securities loaned period-end balances at June 30, 2016 were higher than the average balance during the current quarter which is in line with the increase of inventory over the period. Securities purchased under agreements to resell and Securities borrowed and Securities sold under agreements to repurchase and Securities loaned period-end balances at December 31, 2015 were lower than the average balance during 2015. The balances moved in line with client financing activity and with general

movements of inventory. Securities financing assets and liabilities also include matched book transactions with minimal market, credit and/or liquidity risk. Matched book transactions accommodate customers, as well as obtain securities for the settlement and financing of inventory positions.

Other Securities Financing

The customer receivable portion of the securities financing transactions primarily includes customer margin loans, collateralized by customer-owned securities, which are segregated in accordance with regulatory requirements. The customer payable portion of the securities financing transactions primarily includes payables to our prime brokerage customers. Our risk exposure on these transactions is mitigated by collateral maintenance policies that limit our credit exposure to customers. Additionally, included within securities financing transactions were $10 billion and $11 billion at June 30, 2016 and December 31, 2015, respectively, related to fully collateralized securities-for-securities lending transactions represented in Trading assets.

Liquidity Risk Management Framework

The primary goal of our Liquidity Risk Management Framework is to ensure that we have access to adequate funding across a wide range of market conditions. The framework is designed to enable us to fulfill our financial obligations and support the execution of our business strategies.

The following principles guide our Liquidity Risk Management Framework:

• Sufficient liquid assets should be maintained to cover maturing liabilities and other planned and contingent outflows;

• Maturity profile of assets and liabilities should be aligned, with limited reliance on short-term funding;

• Source, counterparty, currency, region and term of funding should be diversified; and

• Liquidity Stress Tests should anticipate, and account for, periods of limited access to funding.

The core components of our Liquidity Risk Management Framework are the Required Liquidity Framework, Liquidity Stress Tests and the Global Liquidity Reserve, which support our target liquidity profile. For a further discussion about our Required Liquidity Framework and Liquidity Stress Tests, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework” in Part II, Item 7 of the 2015 Form 10-K.

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At June 30, 2016 and December 31, 2015, we maintained sufficient liquidity to meet current and contingent funding obligations as modeled in our Liquidity Stress Tests.

Global Liquidity Reserve

We maintain sufficient liquidity reserves to cover daily funding needs and to meet strategic liquidity targets sized

by the Required Liquidity Framework and Liquidity Stress Tests. For a further discussion of our Global Liquidity Reserve, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework—Global Liquidity Reserve” in Part II, Item 7 of the 2015 Form 10-K.

Global Liquidity Reserve by Type of Investment

	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Cash deposits with banks	$	11,812	$	10,187
Cash deposits with central banks		39,479		39,774
Unencumbered highly liquid securities:
U.S. government obligations		80,560		72,265
U.S. agency and agency mortgage-backed securities		44,635		37,678
Non-U.S. sovereign obligations(1)		17,394		28,999
Other investment grade securities		13,575		14,361
Global Liquidity Reserve	$	207,455	$	203,264

(1) Non-U.S. sovereign obligations are composed of unencumbered German, French, Dutch, U.K., Brazilian and Japanese government obligations.

Global Liquidity Reserve Managed by Bank and Non-Bank Legal Entities

	At June 30, 2016		At December 31, 2015		Daily Average Balance Three Months Ended             June 30, 2016
			(dollars in millions)
Bank legal entities:
Domestic	$	85,504	$	88,432	$	86,901
Foreign		5,558		5,896		5,368
Total Bank legal entities		91,062		94,328		92,269
Non-Bank legal entities:
Parent		61,087		54,810		61,380
Non-Parent		17,673		20,001		17,932
Total Domestic		78,760		74,811		79,312
Foreign		37,633		34,125		38,204
Total Non-Bank legal entities		116,393		108,936		117,516
Total	$	207,455	$	203,264	$	209,785

Regulatory Liquidity Framework

The Basel Committee on Banking Supervision (the “Basel Committee”) has developed two standards intended for use in liquidity risk supervision: the Liquidity Coverage Ratio (“LCR”) and the Net Stable Funding Ratio (“NSFR”).

Liquidity Coverage Ratio

The LCR was developed to ensure banking organizations have sufficient high-quality liquid assets to cover net cash outflows arising from significant stress over 30 calendar days. This standard’s objective is to promote the short-term resilience of the liquidity risk profile of banking organizations.

The final rule to implement the LCR in the U.S. (“U.S. LCR”) applies to us and our U.S. Bank Subsidiaries and each is required to calculate its respective U.S. LCR on each business day. As of January 1, 2016, we and our U.S. Bank Subsidiaries are required to maintain a minimum U.S. LCR of 90%, and this minimum standard will reach the fully phased-in level of 100% beginning on January 1, 2017. In addition, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) has proposed rules that would require large banking organizations, including us, to publicly disclose certain qualitative and quantitative information about their U.S. LCR beginning in the third quarter of 2016. We are compliant with the minimum required U.S. LCR based on current interpretation and we

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continue to evaluate its impact on our liquidity and funding requirements.

Net Stable Funding Ratio

The objective of the NSFR is to reduce funding risk over a one-year horizon by requiring banking organizations to fund their activities with sufficiently stable sources of funding in order to mitigate the risk of future funding stress. The Basel Committee finalized the NSFR framework in 2014. In the second quarter of 2016, the U.S. banking regulators issued a proposal to implement the NSFR in the U.S. The proposal would require a covered company to maintain an amount of available stable funding, which is calculated by applying standardized weightings to its equity and liabilities based on their expected stability, that is no less than the amount of its required stable funding, which is calculated by applying standardized weightings to its assets, derivatives exposures, and certain other off-balance sheet exposures based on their liquidity characteristics. If adopted as proposed, the requirements would apply to us and our U.S. Bank Subsidiaries from January 1, 2018. We are evaluating the potential impact of the proposal, which is subject to public comment and further rulemaking procedures.

Funding Management

We manage our funding in a manner that reduces the risk of disruption to our operations. We pursue a strategy of diversification of secured and unsecured funding sources (by product, investor and region) and attempt to ensure that the tenor of our liabilities equals or exceeds the expected holding period of the assets being financed.

We fund our balance sheet on a global basis through diverse sources. These sources may include our equity capital, long-term debt, securities sold under agreements to repurchase (“repurchase agreements”), securities lending, deposits, commercial paper, letters of credit and lines of credit. We have active financing programs for both standard and structured products targeting global investors and currencies.

Secured Financing

For a discussion of our secured financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Funding Management—Secured Financing” in Part II, Item 7 of the 2015 Form 10-K.

At June 30, 2016 and December 31, 2015, the weighted average maturity of our secured financing against less liquid assets was greater than 120 days.

Unsecured Financing

For a discussion of our unsecured financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Funding Management—Unsecured Financing” in Part II, Item 7 of the 2015 Form 10-K. When appropriate, we may use derivative products to conduct asset and liability management and to make adjustments to our interest rate and structured borrowings risk profile (see Note 4 to the consolidated financial statements in Item 1).

Deposits

Available funding sources to our bank subsidiaries include time deposits, money market deposit accounts, demand deposit accounts, repurchase agreements, federal funds purchased, commercial paper and Federal Home Loan Bank advances. The vast majority of deposits in our U.S. Bank Subsidiaries are sourced from our retail brokerage accounts and are considered to have stable, low-cost funding characteristics. At June 30, 2016 and December 31, 2015 deposits were $152,693 million and $156,034 million, respectively (see Note 9 to the consolidated financial statements in Item 1).

Short-Term Borrowings

Our unsecured short-term borrowings may consist of bank loans, bank notes, commercial paper and structured notes with maturities of 12 months or less at issuance. At June 30, 2016 and December 31, 2015, we had approximately $880 million and $2,173 million, respectively, in Short-term borrowings.

Long-Term Borrowings

We believe that accessing debt investors through multiple distribution channels helps provide consistent access to the unsecured markets. In addition, the issuance of long-term debt allows us to reduce reliance on short-term credit sensitive instruments. Long-term borrowings are generally managed to achieve staggered maturities, thereby mitigating refinancing risk, and to maximize investor diversification through sales to global institutional and retail clients across regions, currencies and product types. Availability and cost of financing to us can vary depending on market conditions, the volume of certain trading and lending activities, our credit ratings and the overall availability of credit.

We may engage in various transactions in the credit markets (including, for example, debt retirements) that we believe are in our best interests and our investors.

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Long-term Borrowings by Maturity Profile

	Parent			Subsidiaries			Total
	(dollars in millions)
Due in 2016		$	6,807		$	3,442		$	10,249
Due in 2017			22,232			1,322			23,554
Due in 2018			18,161			1,126			19,287
Due in 2019			20,534			896			21,430
Due in 2020			16,326			911			17,237
Thereafter			67,752			3,983			71,735
Total		$	151,812		$	11,680		$	163,492

For further information on Long-term borrowings, see Notes 10 and 20 to the consolidated financial statements in Item 1.

Credit Ratings

We rely on external sources to finance a significant portion of our day-to-day operations. The cost and availability of financing generally are impacted by, among other things, our credit ratings. In addition, our credit ratings can have an impact on certain trading revenues, particularly in those businesses where longer-term counterparty performance is a key consideration, such as OTC derivative transactions, including credit derivatives and interest rate swaps. Rating agencies consider company-specific factors; other industry factors such as regulatory or legislative changes; the macroeconomic environment; and perceived levels of government support, among other things.

As of December 2, 2015, our credit ratings no longer incorporate uplift from perceived government support from any rating agency given the significant progress of the U.S. financial reform legislation and regulations. Meanwhile, some rating agencies have stated that they currently incorporate various degrees of credit rating uplift from non-governmental third-party sources of potential support.

Parent and MSBNA’s Senior Unsecured Ratings at July 29, 2016

	Parent
	Short-Term Debt	Long-Term Debt	Rating Outlook
DBRS, Inc.	R-1 (middle)	A (high)	Stable
Fitch Ratings, Inc.	F1	A	Stable
Moody’s Investors Service, Inc.	P-2	A3	Stable
Rating and Investment Information, Inc.	a-1	A-	Stable
Standard & Poor’s Ratings Services	A-2	BBB+	Stable

	Morgan Stanley Bank, N.A.
	Short-Term Debt	Long-Term Debt	Rating Outlook
DBRS, Inc.	—	—	—
Fitch Ratings, Inc.	F1	A+	Stable
Moody’s Investors Service, Inc.	P-1	A1	Stable
Rating and Investment Information, Inc.	—	—	—
Standard & Poor’s Ratings Services	A-1	A	Positive Watch

In connection with certain OTC trading agreements and certain other agreements where we are a liquidity provider to certain financing vehicles associated with the Institutional Securities business segment, we may be required to provide additional collateral or immediately settle any outstanding liability balances with certain counterparties or pledge additional collateral to certain exchanges and clearing organizations in the event of a future credit rating downgrade irrespective of whether we are in a net asset or net liability position.

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services (“S&P”). The following table shows the future potential collateral amounts and termination payments that could be called or required by counterparties or exchanges and clearing organizations in the event of one-notch or two-notch downgrade scenarios, from the lowest of Moody’s or S&P ratings, based on the relevant contractual downgrade triggers.

Incremental Collateral or Terminating Payments upon Potential Future Rating Downgrade

	At June 30, 2016			At December 31, 2015
	(dollars in millions)
One-notch downgrade		$	1,118		$	1,169
Two-notch downgrade			1,330			1,465

While certain aspects of a credit rating downgrade are quantifiable pursuant to contractual provisions, the impact it would have on our business and results of operations in future periods is inherently uncertain and would depend on a number of interrelated factors, including, among others, the magnitude of the downgrade, the rating relative to peers, the rating assigned by the relevant agency pre-downgrade, individual client behavior and future mitigating actions we might take. The liquidity impact of additional collateral requirements is included in our Liquidity Stress Tests.

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Capital Management

Senior management views capital as an important source of financial strength. We actively manage our consolidated capital position based upon, among other things, business opportunities, risks, capital availability and rates of return together with internal capital policies, regulatory requirements and rating agency guidelines and, therefore, in the future may expand or contract our capital base to address the changing needs of our businesses. We attempt to maintain total capital, on a consolidated basis, at least equal to the sum of our operating subsidiaries’ required equity.

We repurchased approximately $625 million of our outstanding common stock as part of our share repurchase program during the current quarter and $1,250 million during the current year period. We repurchased approximately $625 million during the prior year quarter and $875 million in the prior year period (see Note 14 to the consolidated financial statements in Item 1).

Pursuant to the share repurchase program, we consider, among other things, business segment capital needs, as well as stock-based compensation and benefit plan requirements. Share repurchases under our program will be exercised from time to time at prices we deem appropriate subject to various factors, including our capital position and market conditions. The share repurchases may be effected through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans, and may be suspended at any time. Share repurchases are subject to regulatory approval (see also “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Part II, Item 5 of the 2015 Form 10-K).

In June 2016, we received a conditional non-objection from the Federal Reserve to our 2016 capital plan. The capital

plan included a share repurchase of up to $3.5 billion of our outstanding common stock during the period beginning July 1, 2016 through June 30, 2017. Additionally, the capital plan included an increase in the quarterly common stock dividend to $0.20 per share from $0.15 per share during the period beginning with the dividend declared on July 20, 2016 (see Note 20 to the consolidated financial statements in Item 1). The Federal Reserve Board also asked us to submit an additional capital plan by December 29, 2016 addressing weaknesses identified in our capital planning process.

The Board determines the declaration and payment of dividends on a quarterly basis. On July 20, 2016, we announced that the Board declared a quarterly dividend per common share of $0.20. The dividend is payable on August 15, 2016 to common shareholders of record on July 29, 2016 (see Note 20 to the consolidated financial statements in Item 1).

On June 15, 2016, we announced that the Board declared a quarterly dividend for preferred stock shareholders of record on June 30, 2016 that was paid on July 15, 2016.

Trust Preferred Securities

On July 19, 2016, we announced that Morgan Stanley Capital Trust III, Morgan Stanley Capital Trust IV and Morgan Stanley Capital Trust V will redeem all of their issued and outstanding Capital Securities on August 18, 2016, and that Morgan Stanley Capital Trust VIII will redeem all of its issued and outstanding Capital Securities on August 3, 2016, pursuant to the optional redemption provisions provided in the respective governing documents. In the aggregate, $2.8 billion will be redeemed. We will concurrently redeem the related underlying junior subordinated debentures.

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Tangible Equity

Tangible Equity Measures—Period End and Average

	Balance at				Monthly Average Balance Three Months Ended June 30, 2016
	June 30, 2016		December 31, 2015
	(dollars in millions)
Common equity	$	69,596	$	67,662	$	68,951
Preferred equity		7,520		7,520		7,520
Morgan Stanley shareholders’ equity		77,116		75,182		76,471
Junior subordinated debentures issued to capital trusts		2,853		2,870		2,851
Less: Goodwill and net intangible assets		(9,411)		(9,564)		(9,451)
Tangible Morgan Stanley shareholders’ equity(1)	$	70,558	$	68,488	$	69,871
Common equity	$	69,596	$	67,662	$	68,951
Less: Goodwill and net intangible assets		(9,411)		(9,564)		(9,451)
Tangible common equity(1)	$	60,185	$	58,098	$	59,500

(1) Tangible Morgan Stanley shareholders’ equity and tangible common equity are non-GAAP financial measures that we and investors consider to be a useful measure to assess capital adequacy.

Regulatory Requirements

Regulatory Capital Framework

We are a financial holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and are subject to the regulation and oversight of the Federal Reserve. The Federal Reserve establishes capital requirements for us, including well-capitalized standards, and evaluates our compliance with such capital requirements. The Office of the Comptroller of the Currency (“OCC”) establishes similar capital requirements and standards for our U.S. Bank Subsidiaries. The regulatory capital requirements are largely based on the Basel III capital standards established by the Basel Committee and also implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).

The Basel Committee has finalized revisions to the Basel III framework that, if adopted by the U.S. banking agencies, could result in substantial changes to our capital requirements. In particular, the Basel Committee has finalized a new standardized approach methodology for calculating counterparty credit risk exposures in derivatives transactions, and revised frameworks for market risk, interest rate risk in the banking book, and securitization capital requirements. In addition, the Basel Committee has proposed revisions to various regulatory capital standards, the impact of which is uncertain and depends on future rulemakings by the U.S. banking agencies.

Regulatory Capital Requirements

We are required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. A summary of the calculations of regulatory capital, risk-weighted assets (“RWAs”) and transition

provisions follows. For a further discussion of these calculations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Implementation of U.S. Basel III” in Part II, Item 7 of the 2015 Form 10-K.

Regulatory Capital.    Minimum risk-based capital ratio requirements apply to Common Equity Tier 1 capital, Tier 1 capital and Total capital. Certain adjustments to and deductions from capital are required for purposes of determining these ratios, such as deductions for goodwill, intangibles, certain deferred tax assets, other amounts in other comprehensive income and investments in the capital instruments of unconsolidated financial institutions. Certain of these adjustments and deductions are also subject to transitional provisions.

In addition to the minimum risk-based capital ratio requirements, on a fully phased-in basis by 2019, we will be subject to:

• A greater than 2.5% Common Equity Tier 1 capital conservation buffer;

• The Common Equity Tier 1 global systemically important bank (“G-SIB”) capital surcharge, currently at 3%; and

• Up to a 2.5% Common Equity Tier 1 countercyclical capital buffer, currently set by banking regulators at zero (collectively, the “buffers”).

In 2016, the phase-in amount for each of the buffers is 25% of the fully phased-in buffer requirement. Failure to maintain the buffers will result in restrictions on our ability to make capital distributions, including the payment of

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dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers. For a further discussion of the G-SIB capital surcharge, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—G-SIB Capital Surcharge” in Part II, Item 7 of the 2015 Form 10-K.

Risk-Weighted Assets.    RWAs reflect both our on- and off-balance sheet risk as well as capital charges attributable to the risk of loss arising from the following:

• Credit risk: The failure of a borrower, counterparty or issuer to meet its financial obligation to us;

• Market risk: Adverse changes in the level of one or more market prices, rate, indices, implied volatilities, correlations or other market factors, such as market liquidity; and

• Operational risk: Inadequate or failed processes, people and systems or external events (e.g., fraud, theft, legal

and compliance risks, cyber attacks or damage to physical assets).

Our binding risk-based capital ratios for regulatory purposes are the lower of the capital ratios computed under (i) the standardized approaches for calculating credit risk RWAs and market risk RWAs (the “Standardized Approach”); and (ii) the applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”). At June 30, 2016, our binding ratios are based on the Advanced Approach transitional rules.

The methods for calculating each of our risk-based capital ratios will change through January 1, 2022 as aspects of the capital rules are phased in. These changes may result in differences in our reported capital ratios from one reporting period to the next that are independent of changes to our capital base, asset composition, off-balance sheet exposures or risk profile.

Minimum Risk-Based Capital Ratios: Transitional Provisions

(1) These ratios assume the requirements for the G-SIB capital surcharge (3.0%) and countercyclical capital buffer (zero) remain at current levels.

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Transitional and Fully Phased-In Regulatory Capital Ratios

	At June 30, 2016
	Transitional				Fully Phased-In
	Standardized		Advanced		Standardized		Advanced
	(dollars in millions)
Risk-based capital:
Common Equity Tier 1 capital	$	59,796	$	59,796	$	57,556	$	57,556
Tier 1 capital		66,782		66,782		65,274		65,274
Total capital		80,142		79,830		76,982		76,670
Total RWAs		342,504		355,982		352,692		366,781
Common Equity Tier 1 capital ratio		17.5%		16.8%		16.3%		15.7%
Tier 1 capital ratio		19.5%		18.8%		18.5%		17.8%
Total capital ratio		23.4%		22.4%		21.8%		20.9%
Leverage-based capital:
Adjusted average assets(1)		804,511		N/A		803,377		N/A
Tier 1 leverage ratio(2)		8.3%		N/A		8.1%		N/A
	At December 31, 2015
	Transitional				Fully Phased-In
	Standardized		Advanced		Standardized		Advanced
	(dollars in millions)
Risk-based capital:
Common Equity Tier 1 capital	$	59,409	$	59,409	$	55,441	$	55,441
Tier 1 capital		66,722		66,722		63,000		63,000
Total capital		79,663		79,403		73,858		73,598
Total RWAs		362,920		384,162		373,421		395,277
Common Equity Tier 1 capital ratio		16.4%		15.5%		14.8%		14.0%
Tier 1 capital ratio		18.4%		17.4%		16.9%		15.9%
Total capital ratio		22.0%		20.7%		19.8%		18.6%
Leverage-based capital:
Adjusted average assets(1)		803,574		N/A		801,346		N/A
Tier 1 leverage ratio(2)		8.3%		N/A		7.9%		N/A

N/A—Not Applicable

(1) Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the calendar quarter, adjusted for disallowed goodwill, transitional intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments.

(2) The minimum Tier 1 leverage ratio requirement is 4.0%.

The fully phased-in basis pro forma estimates in the previous tables are based on our current understanding of the capital rules and other factors, which may be subject to change as we receive additional clarification and implementation guidance from the Federal Reserve and as the interpretation of the regulation evolves over time. These fully phased-in pro forma estimates are non-GAAP financial measures that we consider to be useful measures for us, investors and analysts in evaluating compliance with new regulatory capital requirements that were not yet effective at June 30, 2016. These preliminary estimates are subject to risks and uncertainties that may cause actual results to differ materially and should not be taken as a projection of what our capital ratios, RWAs, earnings or other results will actually be at future dates. For a discussion of risks and uncertainties that may affect our future results, see “Risk Factors” in Part I, Item 1A of the 2015 Form 10-K.

Well-Capitalized Minimum Regulatory Capital Ratios for U.S. Bank Subsidiaries

	At June 30, 2016
Common Equity Tier 1 risk-based capital ratio		6.5%
Tier 1 risk-based capital ratio		8.0%
Total risk-based capital ratio		10.0%
Tier 1 leverage ratio		5.0%

For us to remain a financial holding company, our U.S. Bank Subsidiaries must qualify as well-capitalized by maintaining the minimum ratio requirements set forth in the previous table. The Federal Reserve has not yet revised the well-capitalized standard for financial holding companies to reflect the higher capital standards required for us under the capital rules. Assuming that the Federal Reserve would apply the same or very similar well-capitalized standards to financial holding companies, each of our

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risk-based capital ratios and Tier 1 leverage ratio at June 30, 2016 would have exceeded the revised well-capitalized standard. The Federal Reserve may require us

to maintain risk- and leverage-based capital ratios

substantially in excess of mandated minimum levels, depending upon general economic conditions and a financial holding company’s particular condition, risk profile and growth plans.

Regulatory Capital Calculated under Advanced Approach Transitional Rules

	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Common Equity Tier 1 capital:
Common stock and surplus	$	19,091	$	20,114
Retained earnings		51,410		49,204
Accumulated other comprehensive income (loss)		(905)		(1,656)
Regulatory adjustments and deductions:
Net goodwill		(6,582)		(6,582)
Net intangible assets (other than goodwill and mortgage servicing assets)		(1,698)		(1,192)
Credit spread premium over risk-free rate for derivative liabilities		(428)		(202)
Net deferred tax assets		(888)		(675)
Net after-tax debt valuation adjustments(1)		(20)		156
Adjustments related to accumulated other comprehensive income		61		411
Other adjustments and deductions		(245)		(169)
Total Common Equity Tier 1 capital	$	59,796	$	59,409
Additional Tier 1 capital:
Preferred stock	$	7,520	$	7,520
Trust preferred securities		—		702
Noncontrolling interests		653		678
Regulatory adjustments and deductions:
Net deferred tax assets		(592)		(1,012)
Credit spread premium over risk-free rate for derivative liabilities		(286)		(303)
Net after-tax debt valuation adjustments(1)		(13)		233
Other adjustments and deductions		(156)		(253)
Additional Tier 1 capital	$	7,126	$	7,565
Deduction for investments in covered funds		(140)		(252)
Total Tier 1 capital	$	66,782	$	66,722
Tier 2 capital:
Subordinated debt	$	11,120	$	10,404
Trust preferred securities		1,675		2,106
Other qualifying amounts		58		35
Regulatory adjustments and deductions		195		136
Total Tier 2 capital	$	13,048	$	12,681
Total capital	$	79,830	$	79,403

(1) In connection with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, related to DVA, the aggregate balance of net after-tax valuation adjustments was reduced by $77 million as of January 1, 2016.

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Roll-forward of Regulatory Capital Calculated under Advanced Approach Transitional Rules

	Six Months Ended         June 30, 2016
	(dollars in millions)
Common Equity Tier 1 capital:
Common Equity Tier 1 capital at December 31, 2015	$	59,409
Change related to the following items:
Value of shareholders’ common equity		1,934
Net intangible assets (other than goodwill and mortgage servicing assets)		(506)
Credit spread premium over risk-free rate for derivative liabilities		(226)
Net deferred tax assets		(213)
Net after-tax debt valuation adjustments(1)		(176)
Adjustments related to accumulated other comprehensive income		(350)
Other deductions and adjustments		(76)
Common Equity Tier 1 capital at June 30, 2016	$	59,796
Additional Tier 1 capital:
Additional Tier 1 capital at December 31, 2015	$	7,565
Change related to the following items:
Trust preferred securities		(702)
Noncontrolling interests		(25)
Net deferred tax assets		420
Credit spread premium over risk-free rate for derivative liabilities		17
Net after-tax debt valuation adjustments(1)		(246)
Other adjustments and deductions		97
Additional Tier 1 capital at June 30, 2016		7,126
Deduction for investments in covered funds at December 31, 2015		(252)
Deduction for investments in covered funds		112
Deduction for investments in covered funds at June 30, 2016		(140)
Tier 1 capital at June 30, 2016	$	66,782
Tier 2 capital:
Tier 2 capital at December 31, 2015	$	12,681
Change related to the following items:
Subordinated debt		716
Trust preferred securities		(431)
Noncontrolling interests		23
Other adjustments and deductions		59
Tier 2 capital at June 30, 2016	$	13,048
Total capital at June 30, 2016	$	79,830

(1) In connection with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, related to DVA, the aggregate balance of net after-tax valuation adjustments was reduced by $77 million as of January 1, 2016.

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Roll-forward of RWAs Calculated under Advanced Approach Transitional Rules

	Six Months Ended       June 30, 2016(1)
	(dollars in millions)
Credit risk RWAs:
Balance at December 31, 2015	$	173,586
Change related to the following items:
Derivatives		1,624
Securities financing transactions		1,239
Other counterparty credit risk		79
Securitizations		(3,246)
Credit valuation adjustment		3,256
Investment securities		1,179
Loans		(7,943)
Cash		1,148
Equity investments		(1,201)
Other credit risk(2)		(1,366)
Total change in credit risk RWAs	$	(5,231)
Balance at June 30, 2016	$	168,355
Market risk RWAs:
Balance at December 31, 2015	$	71,476
Change related to the following items:
Regulatory VaR		(1,107)
Regulatory stressed VaR		(5,436)
Incremental risk charge		(64)
Comprehensive risk measure		(1,396)
Specific risk:
Non-securitizations		(577)
Securitizations		(3,308)
Total change in market risk RWAs	$	(11,888)
Balance at June 30, 2016	$	59,588
Operational risk RWAs:
Balance at December 31, 2015	$	139,100
Change in operational risk RWAs(3)		(11,061)
Balance at June 30, 2016	$	128,039
Total RWAs	$	355,982

VaR—Value-at-Risk

(1) The RWAs for each category in the table reflect both on- and off-balance sheet exposures, where appropriate.

(2) Amount reflects assets not in a defined category, non-material portfolios of exposures and unsettled transactions.

(3) Amount reflects a reduction in the internal loss data related to litigation utilized in the operational risk capital model.

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Supplementary Leverage Ratio

We and our U.S. Bank Subsidiaries are required to publicly disclose our supplementary leverage ratios, which will become effective as a capital standard on January 1, 2018. By January 1, 2018, we must also maintain a Tier 1 supplementary leverage capital buffer of at least 2% in addition to the 3% minimum supplementary leverage ratio (for a total of at least 5%), in order to avoid limitations on capital distributions, including dividends and stock repurchases, and discretionary bonus payments to executive officers. In addition, beginning in 2018, our U.S. Bank Subsidiaries must maintain a supplementary leverage ratio of 6% to be considered well-capitalized.

Pro Forma Supplementary Leverage Exposure and Ratio on a Transitional Basis

	At June 30,  2016		At December 31,  2015
	(dollars in millions)
Total assets	$	828,873		$          787,465
Average total assets(1)	$	814,816		$          813,715
Adjustments(2)(3)		252,291		284,090
Pro forma supplementary leverage exposure	$	1,067,107		$      1,097,805
Pro forma supplementary leverage ratio		6.3%		6.1%

____________

(1) Computed as the average daily balance of consolidated total assets under U.S. GAAP during the calendar quarter.

(2) Computed as the arithmetic mean of the month-end balances over the calendar quarter.

(3) Adjustments are to: (i) incorporate derivative exposures, including adding the related potential future exposure (including for derivatives cleared for clients), grossing up cash collateral netting where qualifying criteria are not met, and adding the effective notional principal amount of sold credit protection offset by qualifying purchased credit protection; (ii) reflect the counterparty credit risk for repo-style transactions; (iii) add the credit equivalent amount for off-balance sheet exposures; and (iv) apply other adjustments to Tier 1 capital, including disallowed goodwill, transitional intangible assets, certain deferred tax assets and certain investments in the capital instruments of unconsolidated financial institutions.

Based on our current understanding of the rules and other factors, we estimate our pro forma fully phased-in supplementary leverage ratio to be approximately 6.1% and 5.8% at June 30, 2016 and December 31, 2015, respectively. This estimate utilizes a fully phased-in Tier 1 capital numerator and a fully phased-in denominator of approximately $1,066.0 billion and $1,095.6 billion at June 30, 2016 and December 31, 2015, respectively, which takes into consideration the Tier 1 capital deductions that would be applicable in 2018 after the phase-in period has ended.

U.S. Subsidiary Banks’ Pro Forma Supplementary Leverage Ratios on a Transitional Basis

	At June 30, 2016		At December 31, 2015
MSBNA		8.0%		7.3%
MSPBNA		11.0%		10.3%

The pro forma supplementary leverage exposures and pro forma supplementary leverage ratios, both on transitional and fully phased-in bases, are non-GAAP financial measures that we consider to be useful measures for us, investors and analysts in evaluating prospective compliance with new regulatory capital requirements that have not yet become effective. Our estimates are subject to risks and uncertainties that may cause actual results to differ materially from estimates based on these regulations. Further, these expectations should not be taken as projections of what our supplementary leverage ratios, earnings, assets or exposures will actually be at future dates. For a discussion of risks and uncertainties that may affect our future results, see “Risk Factors” in Part I, Item 1A of the 2015 Form 10-K.

Total Loss-Absorbing Capacity and Long-Term Debt Requirements

The Federal Reserve has proposed a rule for top-tier bank holding companies of U.S. G-SIBs (“covered BHCs”), including the Parent, that establishes external total loss-absorbing capacity (“TLAC”) and long-term debt (“LTD”) requirements. The proposal contains various definitions and restrictions, such as requiring eligible LTD to be unsecured, have a remaining maturity of one year or more, and not have derivative-linked features, such as structured notes. The proposal would also impose restrictions on certain liabilities that covered BHCs may incur or have outstanding, including structured notes, as well as require all U.S. banking organizations supervised by the Federal Reserve with assets of at least $1 billion to make certain deductions from capital for their investments in unsecured debt issued by covered BHCs. For a further discussion of TLAC and LTD requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Total Loss-Absorbing Capacity and Long-Term Debt Requirements” in Part II, Item 7 of the 2015 Form 10-K. For discussions about the implication of the single point of entry (“SPOE”) resolution strategy and the TLAC proposal, see “Business—Supervision and Regulation—Financial Holding Company—Resolution and Recovery Planning” in Part I, Item 1 and “Risk Factors—Legal, Regulatory and Compliance Risk” in Part I, Item 1A of the 2015 Form 10-K.

Capital Plans and Stress Tests

Pursuant to the Dodd-Frank Act, the Federal Reserve has adopted capital planning and stress test requirements for large bank holding companies, including us, which form part of the Federal Reserve’s annual Comprehensive Capital Analysis and Review (“CCAR”) framework.

On April 5, 2016, we submitted our 2016 CCAR capital plan, and summary results of the Dodd-Frank Act and CCAR supervisory stress tests were published by the Federal Reserve in June. We exceeded all stressed capital ratio minimum requirements in the Federal Reserve severely adverse scenario, and our quantitative capital results improved from our prior year submission. In June

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2016, we received a conditional non-objection from the Federal Reserve to our 2016 capital plan (see “Capital Management” herein). As required, we disclosed a summary of the result of our company-run stress tests on June 23, 2016. The Federal Reserve Board also asked us to submit an additional capital plan by December 29, 2016 addressing weaknesses identified in our capital planning process. Future capital distributions may be restricted if these identified weaknesses are not satisfactorily addressed when the Federal Reserve reviews our resubmitted capital plan. Pursuant to the conditional non-objection, we are able to execute the capital actions set forth in our 2016 capital plan, which include increasing our common stock dividend to $0.20 per share beginning in the third quarter of 2016 and executing share repurchases of $3.5 billion during the period July 1, 2016 through June 30, 2017. In addition, we must submit the results of our mid-cycle company-run stress test to the Federal Reserve by October 5, 2016 and disclose a summary of the results between October 5, 2016 and November 4, 2016.

The Dodd-Frank Act also requires each of our U.S. Bank Subsidiaries to conduct an annual stress test. MSBNA and MSPBNA submitted their 2016 annual company-run stress tests to the OCC on April 5, 2016 and published a summary of their stress test results on June 23, 2016.

For a further discussion of our capital plans and stress tests, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Capital Plans and Stress Tests” in Part II, Item 7 of the 2015 Form 10-K.

Attribution of Average Common Equity according to the Required Capital Framework

Our required capital (“Required Capital”) estimation is based on the Required Capital framework, an internal capital adequacy measure. Common equity attribution to the business segments is based on capital usage calculated by

the Required Capital framework, as well as each business segment’s relative contribution to our total Required Capital. Required Capital is assessed for each business segment and further attributed to product lines. This process is intended to align capital with the risks in each business segment in order to allow senior management to evaluate returns on a risk-adjusted basis.

The Required Capital framework is a risk-based and leverage use-of-capital measure, which is compared with our regulatory capital to ensure that we maintain an amount of going concern capital after absorbing potential losses from stress events, where applicable, at a point in time. We define the difference between our total average common equity and the sum of the average common equity amounts allocated to our business segments as Parent equity. We generally hold Parent equity for prospective regulatory requirements, organic growth, acquisitions and other capital needs.

Effective January 1, 2016, the common equity estimation and attribution to the business segments are based on our fully phased-in regulatory capital, including supplementary leverage and stress losses (which results in more capital being attributed to the business segments), whereas prior periods were attributed based on transitional regulatory capital provisions. Also, beginning in 2016, the amount of capital allocated to the business segments will be set at the beginning of each year, and will remain fixed throughout the year, until the next annual reset. Differences between available and Required Capital will be reflected in Parent equity during the year. Periods prior to 2016 have not been recast under the new methodology.

The Required Capital framework is expected to evolve over time in response to changes in the business and regulatory environment and to incorporate enhancements in modeling techniques. We will continue to evaluate the framework with respect to the impact of future regulatory requirements, as appropriate.

Average Common Equity by Business Segment and Parent Equity

	Three Months Ended(1) June 30,				Six Months Ended(1) June 30,
	2016		2015		2016		2015
	(dollars in billions)
Institutional Securities	$	43.2	$	35.3	$	43.2	$	36.1
Wealth Management		15.3		11.3		15.3		10.9
Investment Management		2.8		2.3		2.8		2.3
Parent		7.7		18.3		7.3		17.0
Total	$	69.0	$	67.2	$	68.6	$	66.3

(1) Amounts are calculated on a monthly basis. Average common equity is a non-GAAP financial measure that we consider to be a useful measure for us, investors and analysts to assess capital adequacy.

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Regulatory Developments

Resolution and Recovery Planning

Pursuant to the Dodd-Frank Act, we are required to submit to the Federal Reserve and the FDIC an annual resolution plan that describes our strategy for a rapid and orderly resolution under the U.S. Bankruptcy Code in the event of our material financial distress or failure. Our preferred resolution strategy, which is set out in our 2015 resolution plan, is an SPOE strategy. On April 12, 2016, the Federal Reserve and the FDIC notified us of certain shortcomings in our 2015 resolution plan. The Federal Reserve, but not the FDIC, viewed one of the shortcomings as a deficiency, and there was not a joint determination that our 2015 resolution plan was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code. We are required to respond with a status report on our actions to address the shortcomings and a public section that explains those actions by October 1, 2016. Our next full resolution plan submission will be on July 1, 2017. If the Federal Reserve and the FDIC were, at a later time, to jointly determine that our 2017 resolution plan is not credible or would not facilitate an orderly resolution, and if we were unable to address any deficiencies at that later time, we or any of our subsidiaries may be subjected to more stringent capital, leverage, or liquidity requirements or restrictions on our growth, activities, or operations, or, after a two-year period, we may be required to divest assets or operations.

In May 2016, the Federal Reserve proposed a rule that would impose contractual requirements on certain “qualified financial contracts” (“covered QFCs”) to which U.S. G-SIBs, including us, and their subsidiaries (“covered entities”) are parties. While national banks and savings associations are not “covered entities” under the proposed rule, the OCC is expected to propose a rule that would subject national banks, including our U.S. Bank Subsidiaries, to substantively identical requirements. Under the proposal, covered QFCs must expressly provide that transfer restrictions and default rights against a covered entity are limited to the same extent as provided under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Act and their implementing regulations. In addition, covered QFCs may not permit the exercise of cross-default rights against a covered entity based on an affiliate’s entry into insolvency, resolution or similar proceedings. If adopted as proposed, the requirements would take effect at the start of the first calendar quarter that begins at least one year after the final rule is issued. We are evaluating the potential impact of the proposal, which is subject to public comment and further rulemaking procedures.

For more information about resolution and recovery planning requirements and our activities in these areas, see “Business—Supervision and Regulation—Financial Holding Company—Resolution and Recovery Planning” in Part I, Item 1 of the 2015 Form 10-K.

Single-Counterparty Credit Limits

In March 2016, the Federal Reserve re-proposed rules that would establish single-counterparty credit limits for large banking organizations (“covered companies”), with more stringent limits for the largest covered companies. U.S. G-SIBs, including us, would be subject to a limit of 15% of Tier 1 capital for credit exposures to any “major counterparty” (defined as other U.S. G-SIBs, foreign G-SIBs and nonbank systemically important financial institutions supervised by the Federal Reserve) and to a limit of 25% of Tier 1 capital for credit exposures to any other unaffiliated counterparty. We are evaluating the potential impact of the proposed rules.

Compensation Practices

In the second quarter of 2016, the federal regulatory agencies required under the Dodd-Frank Act to issue regulations relating to the compensation practices of covered financial institutions, including us, re-proposed rules that if implemented would require, among other things, the deferral of a percentage of certain incentive-based compensation for senior executives and certain other employees and, under certain circumstances, “clawback” of incentive-based compensation. We are evaluating the proposal, which is subject to public comment and further rulemaking procedures.

Legacy Covered Funds under the Volcker Rule

The Volcker Rule prohibits certain investments and relationships by banking entities, such as us, with “covered funds,” with a number of exemptions and exclusions. The Federal Reserve has extended the conformance period until July 21, 2017 for investments in, and relationships with, covered funds that were in place before December 31, 2013, referred to as “legacy covered funds.” On July 7, 2016, the Federal Reserve stated that it will continue to consider whether to take action regarding the additional extended five-year transition period for certain legacy covered funds that are also illiquid funds and that it expects to provide more information in the near term as to how it will address applications by banking entities seeking the statutory extension for this limited category of legacy covered funds. We currently have investments in, and relationships with, legacy covered funds that are illiquid. We expect to be able to divest or conform many of our legacy covered fund investments and relationships by July 2017, but, for certain illiquid funds, we expect to request further conformance extensions.

Proposed U.S. Department of the Treasury Regulations

On April 4, 2016, the U.S. Department of the Treasury released proposed regulations under Section 385 of the U.S. tax code addressing, among other things, the treatment of certain related-party indebtedness as equity for U.S. federal income tax purposes. The proposed regulations are

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subject to change, and may or may not be issued as final in their current form. If adopted as proposed, the requirements would generally be effective for financial instruments issued after April 4, 2016. We are currently evaluating the potential adverse impact on our future effective tax rate of the proposed regulations.

Off-Balance Sheet Arrangements

We enter into various off-balance sheet arrangements, including through unconsolidated special purpose entities (“SPEs”) and lending-related financial instruments (e.g., guarantees and commitments), primarily in connection with the Institutional Securities and Investment Management business segments.

We utilize SPEs primarily in connection with securitization activities. For information on our securitization activities, see Note 12 to the consolidated financial statements in Item 1.

For information on our commitments, obligations under certain guarantee arrangements and indemnities, see Note 11 to the consolidated financial statements in Item 1. For further information on our lending commitments, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk—Lending Activities” in Item 3.

Effects of Inflation and Changes in Interest and Foreign Exchange Rates

For a discussion of the effects of inflation and changes in interest and foreign exchange rates on our business and financial results and strategies to mitigate potential exposures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Effects of Inflation and Changes in Interest and Foreign Exchange Rates” in Part II, Item 7 of the 2015 Form 10-K.

U.K. Referendum

On June 23, 2016, the U.K. electorate voted to leave the European Union (the “EU”). It is difficult to predict the future of the U.K.’s relationship with the EU, which uncertainty may increase the volatility in the global financial markets in the short- and medium-term. There are several alternative models of relationship that the U.K. might seek to negotiate with the EU, the timeframe for which is uncertain but could take two years or more. The regulatory framework applicable to financial institutions with significant operations in Europe, such as us, is expected to evolve and specific and meaningful information regarding the long-term consequences of the vote is expected to become clearer over time. We will continue to evaluate various courses of action in the context of the development of the U.K.’s withdrawal from the EU and the referendum’s potential impact on our operations. For further information regarding our exposure to the U.K., see also “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk—Country Risk Exposure” in Part I, Item 3.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Risk Management

Management believes effective risk management is vital to the success of our business activities. For a discussion of our risk management functions, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management” in Part II, Item 7A of the 2015 Form 10-K.

Market Risk

Market risk refers to the risk that a change in the level of one or more market prices, rates, indices, implied volatilities (the price volatility of the underlying instrument imputed from option prices), correlations or other market factors, such as market liquidity, will result in losses for a position or portfolio. Generally, we incur market risk as a result of trading, investing and client facilitation activities, principally within the Institutional Securities business segment where the substantial majority of our Value-at-Risk (“VaR”) for market risk exposures is generated. In addition, we incur trading-related market risk within the Wealth Management business segment. The Institutional Securities and Wealth Management business segments incur non-trading interest rate risk primarily from lending and deposit taking activities. The Investment Management business segment primarily incurs non-trading market risk from investments in private equity and real estate funds. For a further discussion of market risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Market Risk” in Part II, Item 7A of the 2015 Form 10-K.

VaR

We use the statistical technique known as VaR as one of the tools used to measure, monitor and review the market risk exposures of our trading portfolios. The Market Risk Department calculates and distributes daily VaR-based risk measures to various levels of management.

VaR Methodology, Assumptions and Limitations.    For information regarding our VaR methodology, assumptions and limitations, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Market Risk—Sales and Trading and Related Activities—VaR Methodology, Assumptions and Limitations” in Part II, Item 7A of the 2015 Form 10-K.

We utilize the same VaR model for risk management purposes as well as for regulatory capital calculations as approved by our regulators.

The portfolio of positions used for our VaR for risk management purposes (“Management VaR”) differs from that used for regulatory capital requirements (“Regulatory VaR”). Management VaR contains certain positions that are excluded from Regulatory VaR. Examples include counterparty Credit Valuation Adjustments (“CVA”) and related hedges, as well as loans that are carried at fair value and associated hedges.

The following table presents the Management VaR for the Trading portfolio, on a period-end, quarterly average and quarterly high and low basis. To further enhance the transparency of the traded market risk, the Credit Portfolio VaR has been disclosed as a separate category from the Primary Risk Categories.

Trading Risks

95%/One-Day Management VaR

	95%/One-Day VaR for the Quarter Ended June 30, 2016								95%/One-Day VaR for the Quarter Ended March 31, 2016
Market Risk Category	Period End		Average		High		Low		Period End		Average		High		Low
	(dollars in millions)
Interest rate and credit spread	$	26		32		38		26	$	35	$	33	$	39	$	28
Equity price		20		17		43		13		16		18		26		14
Foreign exchange rate		10		7		12		6		7		7		11		5
Commodity price		9		10		12		9		11		11		13		10
Less: Diversification benefit(1)(2)		(32)		(28)		N/A		N/A		(30)		(27)		N/A		N/A
Primary Risk Categories	$	33		38		61		31	$	39	$	42	$	53	$	34
Credit Portfolio		22		20		23		18		19		16		20		12
Less: Diversification benefit(1)(2)		(13)		(12)		N/A		N/A		(11)		(12)		N/A		N/A
Total Management VaR	$	42		46		68		39	$	47	$	46	$	55	$	39

N/A—Not Applicable

(1) Diversification benefit equals the difference between the total Management VaR and the sum of the component VaRs. This benefit arises because the simulated one-day losses for each of the components occur on different days; similar diversification benefits also are taken into account within each component.

(2) The high and low VaR values for the total Management VaR and each of the component VaRs might have occurred on different days during the quarter, and therefore, the diversification benefit is not an applicable measure.

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The average Total Management VaR for the quarter ended June 30, 2016 (“current quarter”) was $46 million, which was consistent with $46 million for the quarter ended March 31, 2016 (“last quarter”).

The average Management VaR for the Primary Risk Categories for the current quarter was $38 million compared with $42 million for the last quarter. The decrease was driven by an overall reduction in risk exposures across the Sales and Trading businesses.

Distribution of VaR Statistics and Net Revenues for the Current Quarter.    One method of evaluating the reasonableness of our VaR model as a measure of our potential volatility of net revenues is to compare VaR with actual trading revenues. Assuming no intraday trading, for a 95%/one-day VaR, the expected number of times that trading losses should exceed VaR during the year is 13, and, in general, if trading losses were to exceed VaR more than 21 times in a year, the adequacy of the VaR model

would be questioned. We evaluate the reasonableness of our VaR model by comparing the potential declines in portfolio values generated by the model with actual trading results for the Firm, as well as individual business units. For days where losses exceed the VaR statistic, we examine the drivers of trading losses to evaluate the VaR model’s accuracy relative to realized trading results.

The distribution of VaR Statistics and Net Revenues is presented in the following histograms for the Total Trading populations.

Total Trading.    As shown in the 95%/One-Day Management VaR table, the average 95%/one-day Total Management VaR for the current quarter was $46 million. The following histogram presents the distribution of the daily 95%/one-day Total Management VaR for the current quarter, which was in a range between $40 million and $50 million for approximately 91% of trading days during the quarter.

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The following histogram shows the distribution for the current quarter of daily net trading revenues, including profits and losses from Interest rate and credit spread, Equity price, Foreign exchange rate, Commodity price and Credit Portfolio positions and intraday trading activities, for our Trading businesses. Daily net trading revenues also include intraday trading activities but exclude certain items not captured in the VaR model, such as fees, commissions and net interest

income. Daily net trading revenues differ from the definition of revenues required for Regulatory VaR backtesting, which further excludes intraday trading. During the current quarter, we experienced net trading losses on 3 days, of which no day was in excess of the 95%/one-day Total Management VaR.

Non-trading Risks

We believe that sensitivity analysis is an appropriate representation of our non-trading risks. Reflected below is this analysis covering substantially all of the non-trading risk in our portfolio.

Counterparty Exposure Related to Our Own Credit Spread.    The credit spread risk sensitivity of the counterparty exposure related to our own credit spread corresponded to an increase in value of approximately $7 million for each 1 basis point widening in our credit spread level at both June 30, 2016 and March 31, 2016.

Funding Liabilities.    The credit spread risk sensitivity of our mark-to-market funding liabilities corresponded to an increase in value of approximately $15 million and $13 million for each 1 basis point widening in our credit spread level at June 30, 2016 and March 31, 2016, respectively.

Interest Rate Risk Sensitivity.    The following table presents an analysis of selected instantaneous upward and downward parallel interest rate shocks on net interest income over the next 12 months for our U.S. Bank Subsidiaries. These shocks are applied to our 12-month forecast for our U.S. Bank Subsidiaries, which incorporates market expectations of interest rates and our forecasted business activity, including our deposit deployment strategy and asset-liability management hedges.

U.S. Bank Subsidiaries’ Net Interest Income Sensitivity Analysis

	At June 30, 2016		At March 31, 2016
	(dollars in millions)
+200 basis points	$	(204)	$	(202)
+100 basis points		(21)		(79)
–100 basis points		(532)		(534)

At June 30, 2016 and March 31, 2016, large instantaneous interest rates shocks had a negative impact to our U.S. Bank Subsidiaries’ projected net interest income over the following 12 months due to composition of the banks’ assets as well as expected deposit pricing behavior at higher levels of interest rates. We do not manage to any single rate scenario but rather manage net interest income in our U.S. Bank Subsidiaries to optimize across a range of possible outcomes. The sensitivity analysis assumes that we take no action in response to these scenarios and does not assume any change in other macroeconomic variables normally correlated with changes in interest rates.

Investments.    We have exposure to public and private companies through direct investments as well as through funds that invest in these assets. These investments are predominantly equity positions with long investment horizons, a portion of which are for business facilitation purposes. The market risk related to these investments is measured by estimating the potential reduction in net income associated

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with a 10% decline in investment values and related impact on performance fees.

Investments Sensitivity, Including Related Performance Fees

	10% Sensitivity
	At June 30, 2016		At March 31, 2016
	(dollars in millions)
Investments related to Investment Management activities	$	375	$	362
Other investments:
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.		175		159
Other Firm investments		162		169

Equity Market Sensitivity.    In the Wealth Management and Investment Management business segments, certain fee-based revenue streams are driven by the value of clients’ equity holdings. The overall level of revenues for these streams also depends on multiple additional factors that include, but are not limited to, the level and duration of the equity market decline, price volatility, the geographic and industry mix of client assets, the rate and magnitude of client investments and redemptions, and the impact of such market decline and price volatility on client behavior. Therefore, overall revenues do not correlate completely with changes in the equity markets.

Credit Risk

Credit risk refers to the risk of loss arising when a borrower, counterparty or issuer does not meet its financial obligations to us. We primarily incur credit risk exposure to institutions and individuals through our Institutional Securities and Wealth Management business segments. For a further discussion of our credit risks, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk” in Part II, Item 7A of the 2015 Form 10-K. Also, see Notes 7 and 11 to the consolidated financial statements in Item 1 for additional information about our loans and lending commitments, respectively.

Lending Activities

We provide loans and lending commitments to a variety of customers, from large corporate and institutional clients to high net worth individuals. In addition, we purchase loans in the secondary market. In the consolidated balance sheets, these loans and lending commitments are carried at either fair value with changes in fair value recorded in earnings; held for investment, which are recorded at amortized cost; or held for sale, which are recorded at lower of cost or fair value. Loans held for investment and loans held for sale are classified in Loans, and loans held at fair value are classified in Trading assets in the consolidated balance sheets. See Notes 3, 7 and 11 to the consolidated financial statements in Item 1 for further information.

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Loan and Lending Commitment Portfolio by Business Segment

	At June 30, 2016
	Institutional Securities		Wealth Management		Total
	(dollars in millions)
Corporate loans	$	15,938	$	8,248	$	24,186
Consumer loans		—		23,337		23,337
Residential real estate loans		—		22,668		22,668
Wholesale real estate loans		7,415		—		7,415
Loans held for investment, gross of allowance		23,353		54,253		77,606
Allowance for loan losses		(291)		(32)		(323)
Loans held for investment, net of allowance		23,062		54,221		77,283
Corporate loans		14,447		—		14,447
Consumer loans		—		—		—
Residential real estate loans		38		46		84
Wholesale real estate loans		1,351		—		1,351
Loans held for sale		15,836		46		15,882
Corporate loans		7,114		—		7,114
Residential real estate loans		1,721		—		1,721
Wholesale real estate loans		462		—		462
Loans held at fair value		9,297		—		9,297
Total loans(1)		48,195		54,267		102,462
Lending commitments(2)(3)		88,057		7,003		95,060
Total loans and lending commitments(2)(3)	$	136,252	$	61,270	$	197,522

	At December 31, 2015
	Institutional Securities		Wealth Management		Total
	(dollars in millions)
Corporate loans	$	16,452	$	7,102	$	23,554
Consumer loans		—		21,528		21,528
Residential real estate loans		—		20,863		20,863
Wholesale real estate loans		6,839		—		6,839
Loans held for investment, gross of allowance		23,291		49,493		72,784
Allowance for loan losses		(195)		(30)		(225)
Loans held for investment, net of allowance		23,096		49,463		72,559
Corporate loans		11,924		—		11,924
Residential real estate loans		45		59		104
Wholesale real estate loans		1,172		—		1,172
Loans held for sale		13,141		59		13,200
Corporate loans		7,286		—		7,286
Residential real estate loans		1,885		—		1,885
Wholesale real estate loans		1,447		—		1,447
Loans held at fair value		10,618		—		10,618
Total loans(1)		46,855		49,522		96,377
Lending commitments(2)(3)		95,572		5,821		101,393
Total loans and lending commitments(2)(3)	$	142,427	$	55,343	$	197,770

(1) Amounts exclude $23.2 billion and $25.3 billion related to margin loans and $4.9 billion related to employee loans at June 30, 2016 and December 31, 2015, respectively. See Notes 6 and 7 to the consolidated financial statements in Item 1 for further information.

(2) Lending commitments represent the notional amount of legally binding obligations to provide funding to clients for all lending transactions. Since commitments associated with these business activities may expire unused or may not be utilized to full capacity, they do not necessarily reflect the actual future cash funding requirements.

(3) For syndications led by us, the lending commitments accepted by the borrower but not yet closed are net of the amounts agreed to by counterparties that will participate in the syndication. For syndications that we participate in and do not lead, lending commitments accepted by the borrower but not yet closed include only the amount that we expect will be allocated from the lead, syndicate bank. Due to the nature of our obligations under the commitments, these amounts include certain commitments participated to third parties.

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Our credit exposure from our loans and lending commitments is measured in accordance with our internal risk management standards. Risk factors considered in determining the aggregate allowance for loan and commitment losses include the borrower’s financial strength, seniority of the loan, collateral type, volatility of collateral value, debt cushion, loan-to-value ratio, debt service ratio, covenants and counterparty type. At June 30, 2016 and December 31, 2015, the allowance for loan losses related to loans that were accounted for as held for investment was $323 million and $225 million, respectively, and the allowance for commitment losses related to lending commitments that were accounted for as held for investment was $187 million and $185 million, respectively. The aggregate allowance for loan and commitment losses increased over the six months ended June 30, 2016 primarily due to specific reserves on exposures to counterparties in the energy sector and other select downgrades. See “Institutional Securities Lending Exposure Related to the Energy Industry” herein and Note 7 to the consolidated financial statements in Item 1 for further information.

Institutional Securities Lending Activities. In connection with certain of our Institutional Securities business segment activities, we provide loans and lending commitments to a diverse group of corporate and other institutional clients. These activities include corporate lending, commercial and

residential mortgage lending, asset-backed lending, corporate loans purchased in the secondary market, financing extended to equities and commodities customers, and loans to municipalities. These loans and lending commitments may have varying terms; may be senior or subordinated; may be secured or unsecured; are generally contingent upon representations, warranties and contractual conditions applicable to the borrower; and may be syndicated, traded or hedged by us.

Institutional Securities loans and lending commitments are mainly related to relationship-based and event-driven lending to select corporate clients. Relationship-based loans and lending commitments are used for general corporate purposes, working capital and liquidity purposes by our Investment Banking clients and typically consist of revolving lines of credit, letter of credit facilities and term loans. In connection with the relationship-based lending activities, we had hedges (which included single-name, sector and index hedges) with a notional amount of $18.4 billion and $12.0 billion at June 30, 2016 and December 31, 2015, respectively. Event-driven loans and lending commitments are associated with a particular event or transaction, such as to support client merger, acquisition, recapitalization and project finance activities. Event-driven loans and lending commitments typically consist of revolving lines of credit, term loans and bridge loans.

Institutional Securities Loans and Lending Commitments by Credit Rating(1)

	At June 30, 2016
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
AAA	$	263	$	—	$	50	$	—	$	313
AA		3,478		758		4,375		—		8,611
A		2,169		6,517		10,610		1,104		20,400
BBB		11,094		15,909		23,997		844		51,844
Investment grade		17,004		23,184		39,032		1,948		81,168
Non-investment grade		8,040		17,529		18,520		7,134		51,223
Unrated(2)		933		591		94		2,243		3,861
Total	$	25,977	$	41,304	$	57,646	$	11,325	$	136,252

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	At December 31, 2015
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
AAA	$	287	$	24	$	50	$	—	$	361
AA		5,022		2,553		3,735		63		11,373
A		3,996		5,726		11,993		1,222		22,937
BBB		5,089		16,720		23,248		4,086		49,143
Investment grade		14,394		25,023		39,026		5,371		83,814
Non-investment grade		7,768		15,863		22,818		7,779		54,228
Unrated(2)		930		1,091		246		2,118		4,385
Total	$	23,092	$	41,977	$	62,090	$	15,268	$	142,427

(1) Obligor credit ratings are determined by the Credit Risk Management Department.

(2) Unrated loans and lending commitments are primarily trading positions that are measured at fair value and risk managed as a component of Market Risk. For a further discussion of our Market Risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Market Risk” in Part II, Item 7A of the 2015 Form 10-K.

At both June 30, 2016 and December 31, 2015, the aggregate amount of investment grade loans was $15.8 billion, respectively, the aggregate amount of non-investment grade loans was $28.7 billion and $26.9 billion, respectively, and the aggregate amount of unrated loans was $3.7 billion and $4.2 billion, respectively.

Event-Driven Loans and Lending Commitments

	At June 30, 2016		At December 31, 2015
	(dollars in billions)
Event-driven loans	$	9.6	$	5.4
Event-driven lending commitments		13.1		17.8
Total	$	22.7	$	23.2
Event-driven loans and lending commitments to non-investment grade borrowers	$	13.0	$	13.5

Maturity Profile of Event-driven Loans and Lending Commitments

	At June 30, 2016		At December 31, 2015
Less than 1 year		36%		24%
1-3 years		20%		21%
3-5 years		17%		24%
Over 5 years		27%		31%

At June 30, 2016, approximately 98% of the Institutional Securities business segment loans held for investment were current, while approximately 2% were on nonaccrual status, and at December 31, 2015, approximately 99% of the Institutional Securities business segment loans held for investment were current, while approximately 1% were on nonaccrual status because the loans were past due for a period of 90 days or more or payment of principal or interest was in doubt.

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Institutional Securities Credit Exposure from Loans and Lending Commitments by Industry

Industry(1)	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Real estate	$	17,524	$	17,847
Healthcare		16,891		12,677
Energy		13,512		15,921
Consumer discretionary		13,128		12,098
Utilities		12,646		12,631
Industrials		10,349		10,018
Information technology		8,269		11,122
Consumer staples		8,053		8,597
Funds, exchanges and other financial services(2)		8,052		11,649
Materials		6,698		6,440
Mortgage finance		6,399		8,260
Telecommunications services		4,245		4,403
Insurance		3,793		4,682
Consumer finance		2,768		977
Special purpose vehicles		1,914		3,482
Other		2,011		1,623
Total	$	136,252	$	142,427

(1) Industry categories are based on the Global Industry Classification Standard^®.

(2) Includes mutual funds, pension funds, private equity and real estate funds, exchanges and clearinghouses, and diversified financial services.

Institutional Securities Lending Exposures Related to the Energy Industry. At June 30, 2016, Institutional Securities’ loans and lending commitments related to the energy industry were $13.5 billion, of which approximately 64% are accounted for as held for investment and 36% are accounted for as either held for sale or at fair value. Additionally, approximately 59% of the total energy industry loans and lending commitments were to investment grade counterparties. At June 30, 2016, the energy industry portfolio included $1.7 billion in loans and $1.9 billion in lending commitments to Oil and Gas Exploration and Production (“E&P”) companies. The E&P lending commitments were primarily to investment grade counterparties. The E&P loans were substantially all to non-investment grade counterparties, which are generally subject to periodic borrowing base reassessments based on the value of the underlying oil and gas reserves pledged as collateral. In limited situations, we may extend the period related to borrowing base reassessments typically in conjunction with taking certain risk mitigating actions with the borrower. Over the six months ended June 30, 2016, we increased the allowance for loan and commitment losses on held for investment energy exposures and incurred mark-to-market losses on fair value energy loans. See “Credit Risk—Lending Activities” herein for further information. To the extent commodities prices, or oil prices, remain at quarter-

end levels, or deteriorate further, we may incur additional lending losses.

At December 31, 2015, Institutional Securities’ loans and lending commitments related to the energy industry were $15.9 billion. Approximately 60% of these energy industry loans and lending commitments were to investment grade counterparties. At December 31, 2015, the energy industry portfolio included $1.7 billion in loans and $2.7 billion in lending commitments to E&P companies. The E&P loans were substantially all to non-investment grade counterparties which are subject to semi-annual borrowing base reassessments based on the value of the underlying oil and gas reserves pledged as collateral. The E&P lending commitments were primarily to investment grade counterparties.

Institutional Securities Margin Lending. In addition to the activities noted above, Institutional Securities provides margin lending, which allows the client to borrow against the value of qualifying securities. At June 30, 2016 and December 31, 2015, the amounts related to margin lending were $8.7 billion and $10.6 billion, respectively, which were classified within Customer and other receivables in the consolidated balance sheets.

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Wealth Management Lending Activities. The principal Wealth Management lending activities include securities-based lending and residential real estate loans.

Securities-based lending provided to our retail clients is primarily conducted through our Portfolio Loan Account (“PLA”) and Liquidity Access Line (“LAL”) platforms which had an outstanding loan balance of $27.1 billion and $24.9 billion at June 30, 2016 and December 31, 2015, respectively. For more information about our securities-based lending and residential real estate loans, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk—Lending Activities” in Part II, Item 7A of the 2015 Form 10-K.

For the current quarter, loans and lending commitments associated with the Wealth Management business segment lending activities increased by approximately 5.3%, mainly due to growth in LAL and residential real estate loans.

Wealth Management Lending Activities by Remaining Contractual Maturity

	At June 30, 2016
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
Securities-based lending and other loans	$	28,177	$	1,474	$	1,051	$	869	$	31,571
Residential real estate loans		—		—		48		22,648		22,696
Total	$	28,177	$	1,474	$	1,099	$	23,517	$	54,267
Lending commitments		5,539		823		376		265		7,003
Total loans and lending commitments	$	33,716	$	2,297	$	1,475	$	23,782	$	61,270

	At December 31, 2015
	Years to Maturity
	Less than 1		1-3		3-5		Over 5		Total
	(dollars in millions)
Securities-based lending and other loans	$	25,975	$	1,004	$	889	$	749	$	28,617
Residential real estate loans		—		—		35		20,870		20,905
Total	$	25,975	$	1,004	$	924	$	21,619	$	49,522
Lending commitments		5,143		286		115		277		5,821
Total loans and lending commitments	$	31,118	$	1,290	$	1,039	$	21,896	$	55,343

At June 30, 2016 and December 31, 2015, approximately 99.9% of the Wealth Management business segment loans held for investment were current, while approximately 0.1% were on nonaccrual status because the loans were past due for a period of 90 days or more or payment of principal or interest was in doubt.

The Wealth Management business segment also provides margin lending to clients and had an outstanding balance of $14.5 billion and $14.7 billion at June 30, 2016 and December 31, 2015, respectively, which were classified within Customer and other receivables within the consolidated balance sheets.

In addition, the Wealth Management business segment has employee loans that are granted primarily in conjunction with programs established by us to retain and recruit certain employees. These loans are recorded in Customer and other receivables in the consolidated balance sheets. These loans are full recourse, generally require periodic payments and have repayment terms ranging from 1 to 12 years. We establish an allowance for loan amounts we do not consider recoverable, which is recorded in Compensation and benefits expense.

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Credit Exposure—Derivatives

We incur credit risk as a dealer in OTC derivatives. Credit risk with respect to derivative instruments arises from the failure of a counterparty to perform according to the terms of the contract. In connection with our OTC derivative activities, we generally enter into master netting agreements and collateral arrangements with counterparties. These agreements provide us with the ability to demand collateral, as well as to liquidate collateral and offset receivables and payables covered under the same master netting agreement in the event of counterparty default. We manage our trading positions by employing a variety of risk mitigation strategies. These strategies include diversification of risk exposures and hedging. Hedging activities consist of the purchase or sale of positions in related securities and financial instruments, including a variety of derivative products (e.g., futures, forwards, swaps and options). For credit exposure information on our OTC derivative products, see Note 4 to the consolidated financial statements in Item 1. For a discussion of our credit exposure to derivative contracts, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Credit Risk—Credit Exposure—Derivatives” in Part II, Item 7A of the 2015 Form 10-K.

Credit Derivative Portfolio by Counterparty Type

The fair values shown herein are before the application of contractual netting or collateral. For additional credit exposure information on our credit derivative portfolio, see Note 4 to the consolidated financial statements in Item 1.

	At June 30, 2016
	Fair Values(1)						Notionals
	Receivable		Payable		Net		Protection Purchased		Protection Sold
	(dollars in millions)
Banks and securities firms	$	11,974	$	12,705	$	(731)	$	435,374	$	388,776
Insurance and other financial institutions		4,424		5,013		(589)		165,290		175,372
Non-financial entities		63		103		(40)		5,196		3,142
Total	$	16,461	$	17,821	$	(1,360)	$	605,860	$	567,290

	At December 31, 2015
	Fair Values(1)						Notionals
	Receivable		Payable		Net		Protection Purchased		Protection Sold
	(dollars in millions)
Banks and securities firms	$	16,962	$	17,295	$	(333)	$	533,557	$	491,267
Insurance and other financial institutions		5,842		6,247		(405)		189,439		194,723
Non-financial entities		115		123		(8)		5,932		3,529
Total	$	22,919	$	23,665	$	(746)	$	728,928	$	689,519

(1) Our CDS are classified in either Level 2 or Level 3 of the fair value hierarchy. Approximately 2% and 3% of receivable fair values and 8% and 6% of payable fair values represented Level 3 amounts at June 30, 2016 and December 31, 2015, respectively (see Note 3 to the consolidated financial statements in Item 1).

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OTC Derivative Products at Fair Value, Net of Collateral, by Industry

Industry(1)	At June 30, 2016		At December 31, 2015
	(dollars in millions)
Utilities	$	4,315	$	3,428
Banks and securities firms		4,266		1,672
Funds, exchanges and other financial services(2)		2,869		2,029
Industrials		1,929		2,304
Regional governments		1,568		1,163
Healthcare		1,400		1,041
Sovereign governments		1,017		524
Not-for-profit organizations		979		794
Special purpose vehicles		958		718
Consumer discretionary		646		725
Insurance		534		380
Energy		529		396
Consumer staples		473		506
Materials		446		473
Information technology		380		294
Other		351		177
Total(3)	$	22,660	$	16,624

(1) Industry categories are based on the Global Industry Classification Standard^®.

(2) Amounts include mutual funds, pension funds, private equity and real estate funds, exchanges and clearinghouses, and diversified financial services.

(3) For further information on derivative instruments and hedging activities, see Note 4 to the consolidated financial statements in Item 1.

Other

In addition to the activities noted above, there are other credit risks managed by the Credit Risk Management Department and various business areas within the Institutional Securities business segment. We participate in securitization activities whereby we extend short-term or long-term funding to clients through loans and lending commitments that are secured by the assets of the borrower and generally provide for over-collateralization, including commercial real estate loans, loans secured by loan pools, commercial company loans, and secured lines of revolving credit. Credit risk with respect to these loans and lending commitments arises from the failure of a borrower to perform according to the terms of the loan agreement or a decline in the underlying collateral value. See Note 12 to the consolidated financial statements in Item 1 for information about our securitization activities. In addition, a collateral management group monitors collateral levels against requirements and oversees the administration of the collateral function. See Note 6 to the consolidated financial statements in Item 1 for additional information about our collateralized transactions.

Country Risk Exposure

Country risk exposure is the risk that events in, or that affect, a foreign country (any country other than the U.S.) might adversely affect us. We actively manage country risk exposure through a comprehensive risk management

framework that combines credit and market fundamentals and allows us to effectively identify, monitor and limit country risk. Country risk exposure before and after hedging is monitored and managed. For a further discussion of our country risk exposure see, “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Country Risk Exposure” in Part II, Item 7A of the 2015 Form 10-K.

Our sovereign exposures consist of financial instruments entered into with sovereign and local governments. Our non-sovereign exposures consist of exposures to primarily corporations and financial institutions. The following table shows our 10 largest non-U.S. country risk net exposures at June 30, 2016. Index credit derivatives are included in the country risk exposure table. Each reference entity within an index is allocated to that reference entity’s country of risk. Index exposures are allocated to the underlying reference entities in proportion to the notional weighting of each reference entity in the index, adjusted for any fair value receivable/payable for that reference entity. Where credit risk crosses multiple jurisdictions, for example, a CDS purchased from an issuer in a specific country that references bonds issued by an entity in a different country, the fair value of the CDS is reflected in the Net Counterparty Exposure column based on the country of the CDS issuer. Further, the notional amount of the CDS adjusted for the fair value of the receivable/payable is reflected in the Net Inventory column based on the country of the underlying reference entity.

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Top Ten Country Exposures at June 30, 2016

Country	Net Inventory(1)		Net Counterparty Exposure(2)(3)		Loans		Lending Commitments		Exposure Before Hedges		Hedges(4)		Net Exposure(5)
	(dollars in millions)
United Kingdom:
Sovereigns	$	(200)	$	22	$	—	$	—	$	(178)	$	(163)	$	(341)
Non-sovereigns		580		10,381		2,684		5,786		19,431		(2,026)		17,405
Subtotal	$	380	$	10,403	$	2,684	$	5,786	$	19,253	$	(2,189)	$	17,064
Brazil:
Sovereigns	$	4,848	$	—	$	—	$	—	$	4,848	$	(11)	$	4,837
Non-sovereigns		24		307		1,123		33		1,487		(863)		624
Subtotal	$	4,872	$	307	$	1,123	$	33	$	6,335	$	(874)	$	5,461
Germany:
Sovereigns	$	1,254	$	770	$	—	$	—	$	2,024	$	(1,239)	$	785
Non-sovereigns		399		2,005		308		3,467		6,179		(1,795)		4,384
Subtotal	$	1,653	$	2,775	$	308	$	3,467	$	8,203	$	(3,034)	$	5,169
Japan:
Sovereigns	$	1,967	$	154	$	—	$	—	$	2,121	$	(82)	$	2,039
Non-sovereigns		452		2,480		231		—		3,163		(153)		3,010
Subtotal	$	2,419	$	2,634	$	231	$	—	$	5,284	$	(235)	$	5,049
Italy:
Sovereigns	$	1,457	$	19	$	—	$	—	$	1,476	$	44	$	1,520
Non-sovereigns		361		575		11		914		1,861		(254)		1,607
Subtotal	$	1,818	$	594	$	11	$	914	$	3,337	$	(210)	$	3,127
Singapore:
Sovereigns	$	1,873	$	165	$	—	$	—	$	2,038	$	—	$	2,038
Non-sovereigns		19		200		42		30		291		—		291
Subtotal	$	1,892	$	365	$	42	$	30	$	2,329	$	—	$	2,329
Canada:
Sovereigns	$	26	$	69	$	—	$	—	$	95	$	—	$	95
Non-sovereigns		(51)		873		148		1,570		2,540		(341)		2,199
Subtotal	$	(25)	$	942	$	148	$	1,570	$	2,635	$	(341)	$	2,294
China:
Sovereigns	$	135	$	230	$	—	$	—	$	365	$	(542)	$	(177)
Non-sovereigns		880		276		990		275		2,421		(74)		2,347
Subtotal	$	1,015	$	506	$	990	$	275	$	2,786	$	(616)	$	2,170
Netherlands:
Sovereigns	$	(87)	$	—	$	—	$	—	$	(87)	$	(9)	$	(96)
Non-sovereigns		391		747		385		1,065		2,588		(399)		2,189
Subtotal	$	304	$	747	$	385	$	1,065	$	2,501	$	(408)	$	2,093
United Arab Emirates:
Sovereigns	$	(21)	$	1,491	$	—	$	—	$	1,470	$	(35)	$	1,435
Non-sovereigns		(22)		328		47		83		436		(15)		421
Subtotal	$	(43)	$	1,819	$	47	$	83	$	1,906	$	(50)	$	1,856

(1) Net inventory represents exposure to both long and short single-name and index positions (i.e., bonds and equities at fair value and CDS based on a notional amount assuming zero recovery adjusted for any fair value receivable or payable). As a market maker, we may transact in these CDS positions to facilitate client trading. At June 30, 2016, gross purchased protection, gross written protection, and net exposures related to single-name and index credit derivatives for those countries were $(99.4) billion, $98.0 billion and $(1.4) billion, respectively. For a further description of the triggers for purchased credit protection and whether those triggers may limit the effectiveness of our hedges, see “Credit Exposure—Derivatives” herein.

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(2) Net counterparty exposure (i.e., repurchase transactions, securities lending and OTC derivatives) takes into consideration legally enforceable master netting agreements and collateral.

(3) At June 30, 2016, the benefit of collateral received against counterparty credit exposure was $15.6 billion in the U.K., with 97% of collateral consisting of cash, government obligations of the U.K., U.S. and Italy, and $14.0 billion in Germany with 99% of collateral consisting of cash and government obligations of France, Belgium and Germany. The benefit of collateral received against counterparty credit exposure in the other countries totaled approximately $12.9 billion, with collateral primarily consisting of cash and government obligations of Japan, the U.S. and Brazil. These amounts do not include collateral received on secured financing transactions.

(4) Amounts represent CDS hedges (purchased and sold) on net counterparty exposure and lending executed by trading desks responsible for hedging counterparty and lending credit risk exposures for us. Amounts are based on the CDS notional amount assuming zero recovery adjusted for any fair value receivable or payable.

(5) In addition, at June 30, 2016, we had exposure to these countries for overnight deposits with banks of approximately $11.9 billion.

Country Risk Exposure Related to the United Kingdom. At June 30, 2016, our country risk exposures in the U.K. included net exposures of $17,064 million (shown in the previous table) and overnight deposits of $4,774 million. The $17,405 million (shown in the previous table) of exposures to non-sovereigns were diversified across both names and sectors. Of this exposure, $14,884 million is to investment grade counterparties, with the largest single component ($4,483 million) to exchanges and clearing houses.

Country Risk Exposure Related to Brazil.     At June 30, 2016, our country risk exposures in Brazil included net exposures of $5,461 million (shown in the previous table). Our sovereign net exposures in Brazil were principally in the form of local currency government bonds held onshore to support client activity. The $624 million (shown in the previous table) of exposures to non-sovereigns were diversified across both names and sectors.

Country Risk Exposure Related to China. At June 30, 2016, our country risk exposures in China included net exposures of $2,170 million (shown in the previous table) and overnight deposits with international banks of $391 million. The $2,347 million (shown in the previous table) of exposures to non-sovereigns were diversified across both names and sectors and were primarily concentrated in high-quality positions with negligible direct exposure to onshore equities.

Operational Risk

Operational risk refers to the risk of loss, or of damage to our reputation, resulting from inadequate or failed processes, people and systems or from external events (e.g., fraud, theft, legal and compliance risks, cyber attacks or damage to physical assets). We may incur operational risk across the full scope of our business activities, including revenue-generating activities (e.g., sales and trading) and support and control groups (e.g., information technology and trade processing). On March 4, 2016, the Basel Committee on Banking Supervision updated its proposal for calculating operational risk regulatory capital. Under the proposal, which would eliminate the use of an internal model-based approach, required levels of operational risk

regulatory capital would generally be determined under a standardized approach based primarily on a financial statement-based measure of operational risk exposure and adjustments based on the particular institution’s historic operational loss record. We are evaluating the potential impact of the proposal, which is subject to public comment and further rulemaking procedures. For a further discussion about our operational risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Operational Risk” in Part II, Item 7A, of the 2015 Form 10-K.

Liquidity and Funding Risk

Liquidity and funding risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating its assets. Liquidity and funding risk also encompasses our ability to meet our financial obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern. For a further discussion about our operational risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Liquidity and Funding Risk” in Part II, Item 7A, of the 2015 Form 10-K.

Legal and Compliance Risk

Legal and compliance risk includes the risk of legal or regulatory sanctions, material financial loss, including fines, penalties, judgments, damages and/or settlements, or loss to reputation that we may suffer as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities. This risk also includes contractual and commercial risk, such as the risk that a counterparty’s performance obligations will be unenforceable. It also includes compliance with anti-money laundering and terrorist financing rules and regulations. For a further discussion about our operational risk, see “Quantitative and Qualitative Disclosures about Market Risk—Risk Management—Legal and Compliance Risk” in Part II, Item 7A, of the 2015 Form 10-K.

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Item 4. Controls and Procedures

Under the supervision and with the participation of the Firm’s management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Firm’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

No change in the Firm’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) occurred during the period covered by this report that materially affected, or is reasonably likely to materially affect, the Firm’s internal control over financial reporting.

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FINANCIAL DATA SUPPLEMENT (Unaudited)

Average Balances and Interest Rates and Net Interest Income

	Three Months Ended June 30, 2016
	Average       Daily     Balance		Interest		Annualized     Average Rate
	(dollars in millions)
Assets
Interest earning assets:
Trading assets(1):
U.S.	$	100,731	$	459		1.8	%
Non-U.S.		101,631		67		0.3
Investment securities:
U.S.		78,233		237		1.2
Loans:
U.S.		88,908		674		3.0
Non-U.S.		436		6		5.3
Interest bearing deposits with banks:
U.S.		27,821		38		0.6
Non-U.S.		1,429		14		3.8
Securities purchased under agreements to resell and Securities borrowed(2):
U.S.		157,223		(64)		(0.2)
Non-U.S.		82,863		(56)		(0.3)
Customer receivables and Other(3):
U.S.		46,144		233		2.0
Non-U.S.		21,655		59		1.1
Total	$	707,074	$	1,667		0.9	%
Non-interest earning assets		107,742
Total assets	$	814,816
Liabilities and Equity
Interest bearing liabilities:
Deposits:
U.S.	$	152,792	$	10		—	%
Non-U.S.		2,043		5		1.0
Short-term borrowings(4):
U.S.		467		—		0.2
Non-U.S.		651		7		4.6
Long-term borrowings(4):
U.S.		154,745		835		2.2
Non-U.S.		8,198		9		0.4
Trading liabilities(1):
U.S.		31,410		—		—
Non-U.S.		51,385		—		—
Securities sold under agreements to repurchase and Securities loaned(5):
U.S.		31,412		141		1.8
Non-U.S.		31,729		118		1.5
Customer payables and Other(6):
U.S.		124,463		(335)		(1.1)
Non-U.S.		61,729		(36)		(0.2)
Total	$	651,024	$	754		0.5
Non-interest bearing liabilities and equity		163,792
Total liabilities and equity	$	814,816
Net interest income and net interest rate spread			$	913		0.4	%

122

FINANCIAL DATA SUPPLEMENT (Unaudited)—(Continued)

Average Balances and Interest Rates and Net Interest Income

	Three Months Ended June 30, 2015
	Average         Daily Balance		Interest		Annualized     Average Rate
	(dollars in millions)
Assets
Interest earning assets:
Trading assets(1):
U.S.	$	86,632	$	466		2.2	%
Non-U.S.		134,452		89		0.3
Investment securities:
U.S.		71,668		238		1.3
Loans:
U.S.		72,960		526		2.9
Non-U.S.		239		3		5.1
Interest bearing deposits with banks:
U.S.		17,637		14		0.3
Non-U.S.		946		8		3.4
Securities purchased under agreements to resell and Securities borrowed(2):
U.S.		174,981		(182)		(0.4)
Non-U.S.		76,904		(18)		(0.1)
Customer receivables and Other(3):
U.S.		54,343		99		0.7
Non-U.S.		31,137		143		1.9
Total	$	721,899	$	1,386		0.8	%
Non-interest earning assets		125,866
Total assets	$	847,765
Liabilities and Equity
Interest bearing liabilities:
Deposits:
U.S.	$	134,566	$	16		—	%
Non-U.S.		1,884		1		0.2
Short-term borrowings(4):
U.S.		1,157		—		—
Non-U.S.		1,361		5		1.5
Long-term borrowings(4):
U.S.		149,950		907		2.5
Non-U.S.		7,441		8		0.4
Trading liabilities(1):
U.S.		19,703		—		—
Non-U.S.		66,074		—		—
Securities sold under agreements to repurchase and Securities loaned(5):
U.S.		59,501		94		0.6
Non-U.S.		40,621		141		1.4
Customer payables and Other(6):
U.S.		53,206		(483)		(3.7)
Non-U.S.		124,827		(1)		—
Total	$	660,291	$	688		0.4
Non-interest bearing liabilities and equity		187,474
Total liabilities and equity	$	847,765
Net interest income and net interest rate spread			$	698		0.4	%

123

FINANCIAL DATA SUPPLEMENT (Unaudited)—(Continued)

Average Balances and Interest Rates and Net Interest Income

	Six Months Ended June 30, 2016
	Average         Daily Balance		Interest		Annualized     Average Rate
	(dollars in millions)
Assets
Interest earning assets:
Trading assets(1):
U.S.	$	100,057	$	957		1.9	%
Non-U.S.		96,801		152		0.3
Investment securities:
U.S.		76,999		473		1.2
Loans:
U.S.		87,529		1,315		3.0
Non-U.S.		450		12		5.4
Interest bearing deposits with banks:
U.S.		29,289		80		0.5
Non-U.S.		1,225		25		4.1
Securities purchased under agreements to resell and Securities borrowed(2):
U.S.		154,488		(126)		(0.2)
Non-U.S.		84,499		(72)		(0.2)
Customer receivables and Other(3):
U.S.		47,400		468		2.0
Non-U.S.		22,092		130		1.2
Total	$	700,829	$	3,414		1.0	%
Non-interest earning assets		108,150
Total assets	$	808,979
Liabilities and Equity
Interest bearing liabilities:
Deposits:
U.S.	$	154,540	$	27		—	%
Non-U.S.		2,353		10		0.9
Short-term borrowings(4):
U.S.		633		1		0.3
Non-U.S.		621		13		4.3
Long-term borrowings(4):
U.S.		153,073		1,786		2.4
Non-U.S.		7,732		18		0.5
Trading liabilities(1):
U.S.		31,735		—		—
Non-U.S.		49,756		—		—
Securities sold under agreements to repurchase and Securities loaned(5):
U.S.		31,635		271		1.7
Non-U.S.		28,144		242		1.7
Customer payables and Other(6):
U.S.		123,511		(704)		(1.1)
Non-U.S.		61,218		(62)		(0.2)
Total	$	644,951	$	1,602		0.5
Non-interest bearing liabilities and equity		164,028
Total liabilities and equity	$	808,979
Net interest income and net interest rate spread			$	1,812		0.5	%

124

FINANCIAL DATA SUPPLEMENT (Unaudited)—(Continued)

Average Balances and Interest Rates and Net Interest Income

	Six Months Ended June 30, 2015
	Average         Daily Balance		Interest		Annualized     Average Rate
	(dollars in millions)
Assets
Interest earning assets:
Trading assets(1):
U.S.	$	88,677	$	947		2.2	%
Non-U.S.		125,895		202		0.3
Investment securities:
U.S.		71,495		438		1.2
Loans:
U.S.		69,845		995		2.9
Non-U.S.		258		9		7.1
Interest bearing deposits with banks:
U.S.		19,659		31		0.3
Non-U.S.		1,032		14		2.8
Securities purchased under agreements to resell and Securities borrowed(2):
U.S.		166,354		(336)		(0.4)
Non-U.S.		84,918		31		0.1
Customer receivables and Other(3):
U.S.		59,859		270		0.9
Non-U.S.		26,379		269		2.1
Total	$	714,371	$	2,870		0.8	%
Non-interest earning assets		128,876
Total assets	$	843,247
Liabilities and Equity
Interest bearing liabilities:
Deposits:
U.S.	$	133,728	$	33		0.1	%
Non-U.S.		1,646		2		0.2
Short-term borrowings(4):
U.S.		1,158		—		—
Non-U.S.		1,137		9		1.6
Long-term borrowings(4):
U.S.		148,980		1,824		2.5
Non-U.S.		7,892		17		0.4
Trading liabilities(1):
U.S.		19,820		—		—
Non-U.S.		62,582		—		—
Securities sold under agreements to repurchase and Securities loaned(5):
U.S.		64,010		225		0.7
Non-U.S.		36,598		318		1.8
Customer payables and Other(6):
U.S.		57,825		(864)		(3.0)
Non-U.S.		120,318		12		—
Total	$	655,694	$	1,576		0.5
Non-interest bearing liabilities and equity		187,553
Total liabilities and equity	$	843,247
Net interest income and net interest rate spread			$	1,294		0.3	%

(1) Interest expense on Trading liabilities is reported as a reduction of Interest income on Trading assets.

(2) Includes fees paid on Securities borrowed.

(3) Includes interest from customer receivables and other interest earning assets.

(4) The Firm also issues structured notes that have coupon or repayment terms linked to the performance of debt or equity securities, indices, currencies or commodities, which are recorded within Trading revenues (see Note 3 to the consolidated financial statements in Item 1).

(5) Includes fees received on Securities loaned.

(6) Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

125

FINANCIAL DATA SUPPLEMENT (Unaudited)—(Continued)

Rate/Volume Analysis

Effect of Net Interest Income of Volume and Rate Changes

	Three Months Ended June 30, 2016 versus Three Months Ended June 30, 2015
	Increase (decrease) due to change in:
	Volume		Rate		Net Change
	(dollars in millions)
Interest earning assets
Trading Assets:
U.S.	$	76	$	(83)	$	(7)
Non-U.S.		(22)		—		(22)
Investment securities:
U.S.		22		(23)		(1)
Loans:
U.S.		115		33		148
Non-U.S.		2		1		3
Interest bearing deposits with banks:
U.S.		8		16		24
Non-U.S.		4		2		6
Securities purchased under agreements to resell and Securities borrowed:
U.S.		18		100		118
Non-U.S.		(1)		(37)		(38)
Customer receivables and Other:
U.S.		(15)		149		134
Non-U.S.		(44)		(40)		(84)
Change in interest income	$	163	$	118	$	281
Interest bearing liabilities
Deposits:
U.S.	$	2	$	(8)	$	(6)
Non-U.S.		—		4		4
Short-term borrowings:
U.S.		—		—		—
Non-U.S.		(3)		5		2
Long-term borrowings:
U.S.		29		(101)		(72)
Non-U.S.		1		—		1
Securities sold under agreements to repurchase and Securities loaned:
U.S.		(44)		91		47
Non-U.S.		(31)		8		(23)
Customer payables and Other:
U.S.		(647)		795		148
Non-U.S.		1		(36)		(35)
Change in interest expense	$	(692)	$	758	$	66
Change in net interest income	$	855	$	(640)	$	215

126

FINANCIAL DATA SUPPLEMENT (Unaudited)—(Continued)

Rate/Volume Analysis

	Six Months Ended June 30, 2016 versus Six Months Ended June 30, 2015
	Increase (decrease) due to change in:
	Volume		Rate		Net Change
	(dollars in millions)
Interest earning assets
Trading assets:
U.S.	$	122	$	(112)	$	10
Non-U.S.		(47)		(3)		(50)
Investment securities:
U.S.		34		1		35
Loans:
U.S.		252		68		320
Non-U.S.		7		(4)		3
Interest bearing deposits with banks:
U.S.		15		34		49
Non-U.S.		3		8		11
Securities purchased under agreements to resell and Securities borrowed:
U.S.		24		186		210
Non-U.S.		—		(103)		(103)
Customer receivables and Other:
U.S.		(56)		254		198
Non-U.S.		(44)		(95)		(139)
Change in interest income	$	310	$	234	$	544
Interest bearing liabilities
Deposits:
U.S.	$	5	$	(11)	$	(6)
Non-U.S.		1		7		8
Short-term borrowings:
U.S.		—		1		1
Non-U.S.		(4)		8		4
Long-term borrowings:
U.S.		50		(88)		(38)
Non-U.S.		—		1		1
Securities sold under agreements to repurchase and Securities loaned:
U.S.		(114)		160		46
Non-U.S.		(73)		(3)		(76)
Customer payables and Other:
U.S.		(981)		1,141		160
Non-U.S.		(6)		(68)		(74)
Change in interest expense	$	(1,122)	$	1,148	$	26
Change in net interest income	$	1,432	$	(914)	$	518

127

Part II—Other Information

Item 1. Legal Proceedings

The following new matters and developments have occurred since previously reporting certain matters in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Form 10-K”) and the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016 (the “First Quarter Form 10-Q”). See also the disclosures set forth under “Legal Proceedings” in Part I, Item 3 of the Form 10-K and Part II, Item 1 of the First Quarter Form 10-Q.

Residential Mortgage and Credit Crisis Related Matters

Civil Litigation

On April 29, 2016, in Royal Park Investments SA/NV v. Merrill Lynch et al., the Firm filed a motion to dismiss the amended complaint.

On May 23, 2016, the parties in HSH Nordbank AG, et al. v. Morgan Stanley et al. reached an agreement in principle to settle the litigation.

On June 14, 2016, in Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al., the court granted in part and denied in part the Firm’s motion to dismiss.

On July 20, 2016, the Firm filed a demurrer in California v. Morgan Stanley, et al.

On July 27, 2016, in The Charles Schwab Corp. v. BNP Paribas Securities Corp., et al., the Firm reached an agreement with the plaintiff to settle the litigation.

Other Litigation

On July 11, 2016, the Firm received an invitation to respond to a proposed claim (“Proposed Claim”) by the public prosecutor for Court of Accounts for the Republic of Italy. The Proposed Claim relates to certain derivative transactions between the Republic of Italy and the Firm. The transactions were originally entered into between 1999 and 2005, and were terminated in December 2011 and January 2012. The Proposed Claim alleges, inter alia, that the Firm was acting as an agent of the Republic of Italy, that some or all of the derivative transactions were improper and that the termination of the transactions was also improper. The Proposed Claim indicates that, if a proceeding is initiated against the Firm, the public prosecutor would be asserting administrative claims against the Firm for Euro 2.879 billion. The Firm does not agree with the Proposed Claim and intends to present its defenses to the public prosecutor.

128

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth the information with respect to purchases made by or on behalf of the Firm of its common stock during the quarterly period ended June 30, 2016.

Issuer Purchases of Equity Securities

(dollars in millions, except per share amounts)

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans of Programs(1)		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
Month #1 (April 1, 2016-April 30, 2016)
Share Repurchase Program(2)		3,670,865	$	27.15		3,670,865	$	525
Employee transactions(3)		1,068,030	$	26.05		—		—
Month #2 (May 1, 2016-May 31, 2016)
Share Repurchase Program(2)		11,623,406	$	26.71		11,623,406	$	215
Employee transactions(3)		13,059	$	27.24		—		—
Month #3 (June 1, 2016-June 30, 2016)
Share Repurchase Program(2)		8,188,782	$	26.25		8,188,782	$	3,500
Employee transactions(3)		16,489	$	27.12		—		—
Quarter ended at June 30, 2016
Share Repurchase Program(2)		23,483,053	$	26.61		23,483,053	$	3,500
Employee transactions(3)		1,097,578	$	26.08		—		—

(1) Share purchases under publicly announced programs are made pursuant to open-market purchases, Rule 10b5-1 plans or privately negotiated transactions (including with employee benefit plans) as market conditions warrant and at prices the Firm deems appropriate and may be suspended at any time.

(2) The Firm’s Board of Directors has authorized the repurchase of the Firm’s outstanding stock under a share repurchase program (the “Share Repurchase Program”). The Share Repurchase Program is a program for capital management purposes that considers, among other things, business segment capital needs, as well as equity-based compensation and benefit plan requirements. The Share Repurchase Program has no set expiration or termination date. Share repurchases by the Firm are subject to regulatory approval. In June 2016, the Firm received a conditional non-objection from the Federal Reserve to its 2016 capital plan, which included a share repurchase of up to $3.5 billion of the Firm’s outstanding common stock during the period beginning July 1, 2016 through June 30, 2017. During the current quarter, the Firm repurchased approximately $625 million of the Firm’s outstanding common stock as part of its Share Repurchase Program. For further information, see “Liquidity and Capital Resources—Capital Management” in Part I, Item 2.

(3) Includes shares acquired by the Firm in satisfaction of the tax withholding obligations on stock-based awards and the exercise of stock options granted under the Firm’s stock-based compensation plans.

Item 6. Exhibits

An exhibit index has been filed as part of this Report on Page E-1.

129

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MORGAN STANLEY (Registrant)
By:                     /s/ JONATHAN PRUZAN
	Jonathan Pruzan Executive Vice President and Chief Financial Officer
By:                         /s/ PAUL C. WIRTH
	Paul C. Wirth Deputy Chief Financial Officer

Date: August 3, 2016

130

EXHIBIT INDEX

MORGAN STANLEY

Quarter Ended June 30, 2016

Exhibit No.	Description
10.1	Directors’ Equity Capital Accumulation Plan as amended and restated as of August 1, 2016.
10.2	Morgan Stanley Schedule of Non-Employee Directors Annual Compensation, effective as of August 1, 2016.
12	Statement Re: Computation of Ratio of Earnings to Fixed Charges and Computation of Earnings to Fixed Charges and Preferred Stock Dividends.
15	Letter of awareness from Deloitte & Touche LLP, dated August 3, 2016, concerning unaudited interim financial information.
31.1	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Income—Three Months and Six Months Ended June 30, 2016 and 2015, (ii) the Consolidated Statements of Comprehensive Income—Three Months and Six Months Ended June 30, 2016 and 2015, (iii) the Consolidated Balance Sheets—June 30, 2016 and December 31, 2015, (iv) the Consolidated Statements of Changes in Total Equity—Six Months Ended June 30, 2016 and 2015, (v) the Consolidated Statements of Cash Flows—Six Months Ended June 30, 2016 and 2015, and (vi) Notes to Consolidated Financial Statements (unaudited).

E-1

EX-10.1

Exhibit 10.1

MORGAN STANLEY

DIRECTORS’ EQUITY CAPITAL ACCUMULATION PLAN

(as amended through August 1, 2016)

Section 1. Purpose

Morgan Stanley, a Delaware corporation (the “Company”), hereby adopts the Morgan Stanley Directors’ Equity Capital Accumulation Plan (the “Plan”). The purpose of the Plan is to promote the long-term growth and financial success of the Company by attracting, motivating and retaining non-employee directors of outstanding ability and assisting the Company in promoting a greater identity of interest between the Company’s non-employee directors and its stockholders.

Capitalized terms used herein without definition have the meanings ascribed thereto in Section 24.

Section 2. Eligibility and Limitation on Director Compensation

Only directors of the Company who are not employees of the Company or any affiliate of the Company (the “Eligible Directors”) shall participate in the Plan.

Notwithstanding anything in this Plan to the contrary, the aggregate dollar value of Awards granted and Retainers paid to any individual Eligible Director for any Annual Service Period shall not exceed seven hundred and fifty thousand dollars ($750,000). The value of any Awards shall be determined based on the Fair Market Value of a share of Stock on the grant date.

Section 3. Plan Operation

(a) Administration. Other than as provided in Section 5(c)(v), the Plan requires no discretionary action by any administrative body with regard to any transaction under the Plan. To the extent, if any, that questions of administration arise, these shall be resolved by the Board. The Board may, in its discretion, delegate to the Chief Financial Officer, the Chief Legal Officer, the Secretary of the Company or to one or more officers of the Company any or all authority and responsibility to act pursuant to the Plan. All references to the “Plan Administrators” in the Plan shall refer to the Board, or the Chief Financial Officer, the Chief Legal Officer, the Secretary or to one or more officers of the Company if the Board has delegated its authority pursuant to this Section 3(a). The determination of the Plan Administrators on all matters within their authority relating to the Plan shall be conclusive.

(b) No Liability. The Plan Administrators shall not be liable for any action or determination made in good faith with respect to the Plan or any award hereunder, and the Company shall indemnify and hold harmless the Plan Administrators from all losses and expenses (including reasonable attorneys’ fees) arising from the assertion or judicial determination of any such liability.

Section 4. Shares of Stock Subject to the Plan

(a) Stock. Awards under the Plan shall relate to shares of Stock.

(b) Shares Available for Awards. Subject to Section 4(c) (relating to adjustments upon changes in capitalization), as of any date, the total number of shares of Stock with respect to which awards may be granted under the Plan shall be equal to the excess (if any) of (i) 2,450,000 shares over (ii) the sum of (A) the number of shares subject to outstanding awards granted under the Plan and (B) the number of shares previously issued pursuant to the Plan. In accordance with (and without limitation upon) the preceding sentence, shares of Stock covered by awards granted under the Plan that are canceled or expire unexercised shall again become available for awards under the Plan. Shares of Stock that shall be issuable pursuant to the awards granted under the Plan shall be authorized and unissued shares, treasury shares or shares of Stock purchased by, or on behalf of, the Company in open-market transactions.

(c) Adjustments. In the event of any merger, reorganization, recapitalization, consolidation, sale or other distribution of substantially all of the assets of the Company, any stock dividend, split, spin-off, split-up, split-off, distribution of cash, securities or other property by the Company, or other change in the Company’s corporate structure affecting the Stock, then the following shall be automatically adjusted in order to prevent dilution or enlargement of the benefits or potential benefits intended to be awarded under the Plan:

(i) the aggregate number of shares of Stock reserved for issuance under the Plan;

(ii) the number of shares of Stock subject to outstanding awards;

(iii) the number of Stock Units credited pursuant to Section 6 and Section 9 of the Plan;

(iv) the per share purchase price of Stock subject to any stock options granted pursuant to the Plan; and

(v) the number of shares to be granted pursuant to any other automatic awards that may be provided for under the Plan in the future.

(d) Types of Award. The Company’s stockholders originally approved the Plan on April 19, 1996, and approved amendments to the Plan on March 19, 2002. The types of award authorized by the stockholders under the Plan are Director Stock, Stock Units, shares of Stock awarded at an Eligible Director’s election pursuant to Section 11 and stock options.

Section 5. Stock Options

(a) Effective as of February 8, 2005 (the “Stock Option Transition Date”), no additional stock options will be awarded under the Plan.

(b) Section 5(a) shall not impair the rights of any person in any stock option that was awarded under the Plan prior to the Stock Option Transition Date. All such stock options shall remain subject to the terms and conditions applicable thereto.

(c) The following terms and conditions apply to stock options issued under the Plan, including without limitation all stock options issued prior to the Stock Option Transition Date:

2

(i) Nontransferability. No stock option granted pursuant to the Plan shall be sold, assigned or otherwise transferred by an Eligible Director other than by will or the laws of descent or distribution and any such stock option may be exercised during the Eligible Director’s lifetime only by such Eligible Director.

(ii) Limitation on Exercise. No stock option granted pursuant to this Plan may be exercised for a period of six (6) months from the date such stock option was granted.

(iii) Effect of Termination.

(A) If an Eligible Director’s service as a director of the Company terminates for a reason other than for Cause, then any stock option granted to such Eligible Director shall remain exercisable following the date of such Eligible Director’s termination of service in accordance with the following provisions:

(a) Disability, Normal Retirement or Death. If service terminates by reason of Disability, Normal Retirement or death, until the expiration date of the stock option.

(b) Other. If service terminates for any other reason (except for Cause), until the earlier of 90 days after the termination date and the expiration date of the stock option.

(B)    If an Eligible Director is terminated for Cause, all stock options granted under the Plan to such Eligible Director shall be canceled and shall no longer be exercisable, effective on the date of such Eligible Director’s termination for Cause.

(iv)    Expiration Date of Stock Options. All stock options granted under the Plan shall expire on the tenth anniversary of the date on which they are granted.

(v)    Extension of Exercisability. Notwithstanding any other provision hereof, the Board shall have the authority, in its discretion, to amend any outstanding stock option granted pursuant to the Plan to extend the exercisability thereof; provided, however, that no such amendment shall cause such stock option to remain exercisable beyond its original expiration date.

(d) Notwithstanding Section 5(a), stock options remain one of the types of award that the stockholders of the Company have authorized for the Plan, and Section 5(a) shall not impair the authority of the Board under Section 15 to amend the Plan in the future to provide for awards of stock options without obtaining additional stockholder approval.

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Section 6. Initial and Annual Awards

(a) Initial Awards. On the first day of the calendar month following the month in which any person becomes an Eligible Director, otherwise than by reason of being elected to the Board at an Annual Meeting, such Eligible Director shall be entitled to receive a number of Initial Stock Units obtained by dividing (x) $250,000 prorated for service during the period beginning on the first day of the calendar month during which such person becomes an Eligible Director until the last day of the calendar month immediately preceding the calendar month during which the first anniversary of the immediately preceding Annual Meeting will occur by (y) the Fair Market Value of a share of Stock on the first day of the calendar month following the month in which such person becomes an Eligible Director; provided, however, that if such a person is elected, appointed or otherwise becomes an Eligible Director less than 60 days prior to the Annual Meeting in any year, then such Eligible Director shall not receive Initial Stock Units pursuant to this Section 6(a). 50% of the Initial Stock Units awarded to an Eligible Director pursuant to this Section 6(a) shall be credited to the Eligible Director’s Career Stock Unit Account and the remaining 50% of the Initial Stock Units shall be credited to the Eligible Director’s Current Stock Unit Account.

(b) Subsequent Awards. As of the date of each Annual Meeting, each Eligible Director, including, without limitation, any Eligible Director who becomes a member of the Board by reason of being elected to the Board at such Annual Meeting, shall be entitled to receive a number of Annual Stock Units obtained by dividing $250,000 by the Fair Market Value of a share of Stock on the date of such Annual Meeting; provided, that such Eligible Director shall continue to serve as a director of the Company after such Annual Meeting. 50% of the Annual Stock Units awarded to an Eligible Director pursuant to this Section 6(b) shall be credited to the Eligible Director’s Career Stock Unit Account and the remaining 50% of the Annual Stock Units shall be credited to the Eligible Director’s Current Stock Unit Account. Annual Stock Units and Initial Stock Units credited to the Eligible Director’s Career Stock Unit Account pursuant to this Section 6(b) or pursuant to Section 6(a) above are referred to as “Career Stock Units”.

(c) Limitation on Transfer. Any Director Stock awarded under the Plan may not be sold, transferred, pledged, assigned or otherwise conveyed by an Eligible Director for a period of six (6) months from the date such Director Stock is awarded. Neither Annual Stock Units nor Initial Stock Units may be sold, transferred, pledged, assigned or otherwise conveyed by an Eligible Director. The shares delivered upon conversion of Annual Stock Units and Initial Stock Units will not be subject to any transfer restrictions, other than those that may arise under the securities laws or the Company’s policies.

(d) No Effect on Prior Initial Awards or Prior Subsequent Awards. The provisions of this Section 6 apply to all Initial Awards and Subsequent Awards made on or after the Stock Unit Transition Date. Nothing herein shall alter the grants of Initial Awards and Subsequent Awards made prior to the Stock Unit Transition Date.

Section 7. Vesting Schedule

(a)    Initial Stock Units. The Initial Stock Units shall be fully vested upon grant.

(b)    Annual Stock Units. The Annual Stock Units shall vest in 12 substantially

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equal installments on the last day of each month beginning with the calendar month during which Annual Meeting is held, assuming that the Eligible Director continues to serve as a director of the Company through the last day of the relevant month.

Section 8. Death, Disability and Governmental Service

(a) Death or Disability. All of an Eligible Director’s unvested Stock Units will vest in full as of the date of the Eligible Director’s termination of service on the Board due to death or Disability. Notwithstanding any election made by an Eligible Director on any Deferral Election Form or any other provision of the Plan, in the event of such Eligible Director’s death, all amounts credited to such Eligible Director’s Cash Account, Current Stock Unit Account and Career Stock Unit Account, and any Deferred Amount that has not yet been credited to such Eligible Director’s Cash Account or Current Stock Unit Account, will be paid in a lump sum to the Eligible Director’s beneficiary (or if no beneficiary has been designated, to such Eligible Director’s estate) upon the Eligible Director’s death, provided that such beneficiary or the legal representative of such Eligible Director’s estate, as applicable, notifies the Company of the Eligible Director’s death within 60 days following death. Following an Eligible Director’s termination of service on the Board due to Disability, distributions under the Plan will be made as provided in Section 9(e) or Section 9(f), as applicable.

(b) Governmental Service Resignation. Notwithstanding any election made by an Eligible Director on any Deferral Form, if an Eligible Director resigns as a director of the Company as a result of accepting employment at a governmental department or agency, self-regulatory agency or other public service employer (a “Governmental Employer”) (such resignation is referred to herein as a “Governmental Service Resignation”), then (i) if the Eligible Director provides the Company with satisfactory evidence demonstrating that as a result of such employment, the divestiture of his or her continued interest in Company equity awards or continued ownership of Stock is reasonably necessary to avoid the violation of U.S. federal, state or local or foreign ethics law or conflicts of interest law applicable to the Eligible Director at such Governmental Employer, all of an Eligible Director’s unvested Stock Units will vest in full as of the date of the Eligible Director’s Governmental Service Resignation, all amounts credited to the Eligible Director’s Current Stock Unit Account and Career Stock Unit Account will be distributed in a lump sum in accordance with Section 9(h), and all transfer restrictions will lift on shares of Director Stock held by the Eligible Director, on the date of such Governmental Service Resignation, and (ii) if the Eligible Director provides the Company with satisfactory evidence demonstrating that as a result of such employment, the divestiture of the Eligible Director’s continued interest in his or her Cash Account is reasonably necessary to avoid the violation of U.S. federal, state or local or foreign ethics law or conflicts of interest law applicable to the Eligible Director at such Governmental Employer, all amounts credited to the Eligible Director’s Cash Account will be distributed in a lump sum on the date of such Governmental Service Resignation.

(c) Governmental Service following Resignation. Notwithstanding any election made by an Eligible Director on any Deferral Form, if, following Eligible Director’s Service Termination Date, the Eligible Director accepts employment with a Governmental Employer, then (i) upon providing the Company with satisfactory evidence demonstrating that as a result of such employment the divestiture of the Eligible Director’s continued interest in Company equity

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awards or continued ownership of Stock is reasonably necessary to avoid the violation of U.S. federal, state or local or foreign ethics law or conflicts of interest law applicable to the Eligible Director at such Governmental Employer, all amounts credited to the Eligible Director’s Current Stock Unit Account and Career Stock Unit Account will be distributed in a lump sum in accordance with Section 9(h), and all transfer restrictions will lift on shares of Director Stock held by the Director, on the date on which the Eligible Director provides the Company with such satisfactory evidence, and (ii) if the Eligible Director provides the Company with satisfactory evidence demonstrating that as a result of such employment, the divestiture of the Eligible Director’s continued interest in his or her Cash Account is reasonably necessary to avoid the violation of U.S. federal, state or local or foreign ethics law or conflicts of interest law applicable to the Eligible Director at such Governmental Employer, all amounts credited to the Eligible Director’s Cash Account will be distributed in a lump sum on the date on which the Eligible Director provides the Company with such satisfactory evidence.

Section 9. Deferral Elections and Distributions

(a) Deferral of Retainers. An Eligible Director may make a Deferral Election to defer receipt of all or part of such Eligible Director’s Retainers for a given service period. An Eligible Director may make such a Deferral Election by submitting a Deferral Election Form to the Secretary, indicating:

(i) the Deferred Amount or a percentage of such Retainer to be deferred;

(ii) the Distribution Commencement Date, in accordance with Section 9(e); and

(iii) whether distributions are to be made in a lump sum or installments, in accordance with Section 9(g).

Deferral Election Forms must be submitted prior to the start of the calendar year during which the services giving rise to such Retainer to be deferred begin; provided, however, that in the case of an Eligible Director who is newly elected or appointed to the Board, such Eligible Director’s Deferral Election Form relating to the Retainer earned during the service period commencing on the date of such election or appointment may be submitted within 30 days after the date of such election or appointment. In all cases, a Deferral Election Form shall be effective only with respect to Retainers that are earned after the Deferral Election is made. An Eligible Director may make only one Deferral Election covering Retainers to be earned during a given service period (so that an Eligible Director may not, for example, make one Deferral Election relating to the Annual Retainer and a different Deferral Election relating to a Committee Retainer). Deferral Elections (including indications on the Deferral Election Form as to Distribution Commencement Date and form of distributions), once made, shall be irrevocable. Notwithstanding the foregoing, a Deferral Election may be superseded with respect to future deferrals of an Eligible Director’s Retainers by submitting a new Deferral Election Form to the Secretary, in which case such new Deferral Election shall be effective starting with the Retainer earned in the service period that begins in the calendar year following the calendar year in which such new Deferral Election Form is submitted.

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(b) Crediting of Deferrals of Retainers. Deferrals of an Eligible Director’s Retainers shall be allocated to a Current Stock Unit Account. As of each Retainer Payment Date, the Company shall credit the Eligible Director’s Current Stock Unit Account with a number of Elective Stock Units determined by dividing (X) the Deferred Amount of Retainers that otherwise would be paid in cash on such Retainer Payment Date by (Y) the Fair Market Value of a share of Stock on such Retainer Payment Date.

(c) Deferrals of Current Stock Units. An Eligible Director may make a Deferral Election to defer receipt of the Current Stock Units to be earned for a given service period by submitting a Deferral Election Form to the Secretary indicating:

(i) the Distribution Commencement Date, in accordance with Section 9(e); and

(ii) whether distributions are to be made in a lump sum or installments, in accordance with Section 9(g).

A Deferral Election pursuant to this Section 9(c) must relate to all Current Stock Units to be earned by an Eligible Director during a given service period. Deferral Election Forms must be submitted prior to the start of the calendar year during which the services giving rise to such Current Stock Units to be deferred begin; provided, however, that in the case of an Eligible Director who is newly elected or appointed to the Board, such Eligible Director’s Deferral Election Form relating to the Current Stock Units earned during the service period commencing on the date of such election or appointment (that is, 50% of the Eligible Director’s Initial Stock Units) may be submitted within 30 days after the date of such election or appointment. In all cases, a Deferral Election Form shall be effective only with respect to Current Stock Units that are earned after the Deferral Election is made. Deferral Elections (including indications on the Deferral Election Form as to Distribution Commencement Date and form of distributions), once made, shall be irrevocable. Notwithstanding the foregoing, a Deferral Election may be superseded with respect to future deferrals of an Eligible Director’s Current Stock Units by submitting a new Deferral Election Form to the Secretary, in which case such new Deferral Election shall be effective starting with the Current Stock Units earned in the service period that begins in the calendar year following the calendar year in which such new Deferral Election Form is submitted.

(d) Deferrals of Career Stock Units. An Eligible Director may elect to defer receipt of the Career Stock Units to be earned for a given service period by submitting a Deferral Election Form to the Secretary indicating:

(i) the Distribution Commencement Date for such Career Stock Unit Account, in accordance with Section 9(f); and

(ii) whether distributions are to be made in a lump sum or installments, in accordance with Section 9(g).

A Deferral Election pursuant to this Section 9(d) must relate to all Career Stock Units to be earned by an Eligible Director during a given service period. Deferral Election Forms must be submitted prior to the start of the calendar year during which the services giving rise to such

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Career Stock Units to be deferred begin; provided, however, that in the case of an Eligible Director who is newly elected or appointed to the Board, such Eligible Director’s Deferral Election Form relating to the Career Stock Units earned during the service period commencing on the date of such election or appointment (that is, 50% of the Eligible Director’s Initial Stock Units) may be submitted within 30 days after the date of such election or appointment. In all cases, a Deferral Election Form shall be effective only with respect to the Career Stock Units that are earned after the Deferral Election is made. Deferral Elections (including indications on the Deferral Election Form as to Distribution Commencement Date and form of distributions), once made, shall be irrevocable. Notwithstanding the foregoing, a Deferral Election relating to Career Stock Units may be superseded with respect to future deferrals by submitting a new Deferral Election Form to the Secretary, in which case such new Deferral Election shall be effective starting with the Career Stock Units earned in the service period that begins in the calendar year following the calendar year in which such new Deferral Election Form is submitted.

(e) Distribution Commencement Date for Current Stock Unit Account. Each Eligible Director shall designate on the Deferral Election Form one of the following dates as a Distribution Commencement Date with respect to amounts credited to the Current Stock Unit Account thereafter:

(i) such Eligible Director’s Service Termination Date;

(ii) the earlier of (x) a calendar year specified by such Eligible Director (which, if the Deferral Election relates to Elective Stock Units, shall not be earlier than the calendar year following the year in which occurs the final Retainer Payment Date of the relevant Deferred Amount and, if the Deferral Election relates to Current Stock Units, shall not be earlier than the calendar year following the year in which occurs the first anniversary of the date of grant of the relevant Current Stock Units) and (y) the fifth calendar year following the year in which the Eligible Director’s Service Termination Date occurs; or

(iii) the earlier to occur of (i) or (ii)(x).

For the avoidance of doubt, it is noted that an Eligible Director who submits separate Deferral Elections for Retainers and Current Stock Units to be earned during a given service period may designate a separate Distribution Commencement Date for each deferral. Distributions from an Eligible Director’s Current Stock Unit Account in respect of Current Stock Units as to which an Eligible Director has not made a Deferral Election will be made, subject to the other provisions of this Plan, on the first anniversary of the date of grant.

(f) Distribution Commencement Date for Career Stock Unit Account. Notwithstanding any provision to the contrary in this Plan or any Deferral Election Form, no amounts credited to an Eligible Director’s Career Stock Unit Account shall be distributed prior to such Eligible Director’s Service Termination Date. Each Eligible Director may designate on the Deferral Election Form for such Eligible Director’s Career Stock Unit Account one of the following dates as a Distribution Commencement Date with respect to amounts credited to the Career Stock Unit Account:

(i) such Eligible Director’s Service Termination Date; or

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(ii) any of the second through fifth calendar years following the year in which the Eligible Director’s Service Termination Date occurs.

Distributions from an Eligible Director’s Career Stock Unit Account in respect of Career Stock Units as to which an Eligible Director has not made a Deferral Election will be made, subject to the other provisions of this Plan, on the Eligible Director’s Service Termination Date.

(g) Distribution Method. An Eligible Director shall state on each Deferral Election Form whether distributions that are subject to such Deferral Election Form shall be made in:

(i) a lump sum; or

(ii) no more than 10 annual installments.

Where an Eligible Director’s Distribution Commencement Date is such Eligible Director’s Service Termination Date, the lump sum or first annual installment, as applicable, will be paid upon the Eligible Director’s Service Termination Date. The amount to be distributed in any installment pursuant to a specific Deferral Election Form shall be determined by dividing the number of Stock Units in the Career Stock Unit Account or Current Stock Unit Account, as the case may be, that are subject to such Deferral Election Form by the number of remaining installments. If an Eligible Director receives a distribution on an installment basis, undistributed Deferred Amounts shall remain subject to the provisions of this Section 9.

(h) Form of Distributions. All distributions from the Cash Account shall be paid in cash. Distributions made from the Current Stock Unit Account and the Career Stock Unit Account shall be for a number of whole shares of Stock equal to the number of whole Stock Units to be distributed and cash in lieu of any fractional share (determined by using the Fair Market Value of a share of Stock on the date on which such distributions are distributed).

(i) Dividend Equivalents. If there are Stock Units in an Eligible Director’s Current Stock Unit Account or Career Stock Unit Account on a dividend record date with respect to the Company’s Stock, the Current Stock Unit Account or Career Stock Unit Account, as applicable, shall be credited, on the dividend payment date for such dividend record date, with an additional number of Stock Units (“Dividend Equivalents”) equal to:

(i) the cash dividend paid on one share of Stock; multiplied by

(ii) the number of Stock Units in such Account on such dividend record date; with the product of (i) and (ii) divided by

(iii) the Fair Market Value of a share of Stock on the dividend payment date.

Dividend Equivalents credited in respect of Stock Units subject to vesting shall be fully vested upon grant.

(j) No Effect on Prior Deferral Elections. The provisions of this Section 9 apply to all Deferral Elections made on or after the Stock Unit Transition Date. Nothing herein shall alter the terms of effective Deferral Elections made prior to the Stock Unit Transition Date.

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(k) Date of Payment. Unless the Plan Administrator determines otherwise, whenever a Deferral Election specifies a calendar year for payment of all or a portion of a Deferred Amount, such payment shall be made on January 2 of the specified calendar year.

(l) Rule of Construction for Timing of Payment. Whenever a Deferral Election or the Plan provides for payment upon a specified event or date, such payment will be considered to have been timely made, and neither the Eligible Director nor any of his or her beneficiaries or estate shall have any claim against the Company for damages based on a delay in payment, and the Firm shall have no liability to the Eligible Director (or to any of his or her beneficiaries or estate) in respect of any such delay, as long as payment is made by December 31 of the year in which occurs the applicable specified event or date or, if later, by the 15th day of the third calendar month following such specified event or date.

(m) Deferral of Meeting Fees. As of the Stock Option Transition Date, the Company does not pay Meeting Fees. In the event that the Company determines in the future to pay Meeting Fees to Eligible Directors, and in the case of Meeting Fees deferred prior to the Stock Option Transition Date, the provisions of this Section 9 relating to elective deferrals of Retainers, and the provisions of Section 11 relating to Stock Elections, shall apply to such Meeting Fees mutatis mutandis; provided, however, that any Deferred Amount resulting from deferral of all or part of an Eligible Director’s Meeting Fees (other than Meeting Fees for meetings of the Board or any committee thereof held on the date of an Annual Meeting) will initially be credited to the Cash Account as of the date on which the Eligible Director becomes entitled to payment of the Meeting Fees, shall thereafter be credited with Interest Equivalents as calculated under this Section 9(m) (such Deferred Amount as increased by such Interest Equivalents being the “Adjusted Deferred Amount”) and will thereafter be debited from the Cash Account and credited to the Eligible Director’s Current Stock Unit Account as of the date of the next Annual Meeting following the date of such meeting (or, if the Eligible Director’s service on the Board terminates prior to the next Annual Meeting following the date of such meeting, as of the first business day following his or her Service Termination Date), with the number of Stock Units credited to the Current Stock Unit Account being the amount obtained by dividing (i) the relevant Adjusted Deferred Amount by (ii) the Fair Market Value of a share of Stock on the date of such Annual Meeting or the Service Termination Date, as applicable. As of the last day of each fiscal quarter and the Eligible Director’s Service Termination Date, the Eligible Director’s Cash Account will be credited with an Interest Equivalent equal to (i) the Rate of Interest, multiplied by (ii) the Average Daily Cash Balance, multiplied by (iii) the number of days during the fiscal quarter or other period during which such Cash Account had a positive balance, divided by (iv) 365.

Section 10. Designation of Beneficiaries

An Eligible Director may designate one or more beneficiaries to receive any distributions under the Plan upon the Eligible Director’s death, and may change such designation at any time by submitting a new beneficiary designation form to the Secretary.

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Section 11. Election to Receive Stock

(a) Election. An Eligible Director may make a Stock Election to receive all or part of any or all of such Eligible Director’s Retainers in shares of Stock by submitting a Stock Election Form to the Secretary indicating the Stock Amount. A Stock Election Form shall be effective only with respect to Retainers payable after the date on which the Secretary receives the Stock Election Form. Each Stock Election, once made, shall be irrevocable. Notwithstanding the foregoing, a Stock Election may be superseded with respect to future payments of an Eligible Director’s Retainers by submitting a new Stock Election Form to the Secretary.

(b) Payment in Stock. As of each Retainer Payment Date, an Eligible Director who has made a Stock Election will receive, in lieu of the Retainer elected to be received in Stock, a whole number of shares of Stock (but not fractional shares) determined by dividing:

(i) the amount of the Retainer that is payable to the Eligible Director on the applicable Retainer Payment Date and is subject to a Stock Election; by

(ii) the Fair Market Value of a share of Stock on such Retainer Payment Date.

In no circumstances shall an Eligible Director be entitled to receive, or shall the Company have any obligation to issue to the Eligible Director, any fractional share of Stock. In lieu of any fractional share of Stock, the Eligible Director shall be entitled to receive, and the Company shall be obligated to pay to such Eligible Director, cash equal to the value of any fractional share of Stock (determined by using the Fair Market Value of a share of Stock on such Retainer Payment Date).

Section 12. Fair Market Value

“Fair Market Value” shall mean, with respect to each share of Stock for any day:

(a) if the Stock is listed for trading on the New York Stock Exchange, (i) the volume weighted average price of the Stock, reflecting composite trading between 9:30 a.m. and 4:00 p.m. (Eastern time) on such date, as reported by the Bloomberg Professional Service on the MS Equity Volume at Price page under the “VWAP” field, at 4:00 p.m. on such date, rounded up to the nearest whole cent, or, if not so reported, as reported by another third party source to which the Company has access on such date, or if no such reported sale of the Stock shall have occurred on such date, on the most recent date on which such a reported sale occurred; or (ii) if the volume weighted average price is not available from a third party source to which the Company has access on such date or on the most recent date on which a reported sale occurred, “Fair Market Value” will be the average of the high and low prices of the Stock as reported on the Consolidated Transaction Reporting System on such date, or if no such reported sale of the Stock shall have occurred on such date, on the most recent date on which such a reported sale occurred; or

(b) if the Stock is not so listed, but is listed on another national securities exchange, the closing price, regular way, of the Stock on such exchange, rounded up to the nearest whole cent, on which the largest number of shares of Stock have been traded in the aggregate on the preceding twenty trading days, or, if no such reported sale of the Stock shall have occurred on such date on such exchange, on the most recent date on which such a reported sale occurred on such exchange, or

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(c) if the Stock is not listed for trading on a national securities exchange, the average of the closing bid and asked prices as reported by the National Association of Securities Dealers, rounded up to the nearest whole cent, or, if no such prices shall have been so reported for such date, on the most recent date for which such prices were so reported.

Section 13. Issuance of Stock

(a) Restrictions on Transferability. All shares of Stock delivered under the Plan shall be subject to such stop-transfer orders and other restrictions as the Company may deem advisable or legally necessary under any laws, statutes, rules, regulations and other legal requirements, including, without limitation, those of any stock exchange upon which the Stock is then listed and any applicable federal, state or foreign securities law.

(b) Compliance with Laws. Anything to the contrary herein notwithstanding, the Company shall not be required to issue any shares of Stock under the Plan if, in the opinion of legal counsel to the Company, the issuance and delivery of such shares would constitute a violation by the Eligible Director or the Company of any applicable law or regulation of any governmental authority, including, without limitation, federal and state securities laws, or the regulations of any stock exchanges on which the Company’s securities may then be listed.

Section 14. Withholding Taxes

The Company may require as a condition of delivery of any shares of Stock that the Eligible Director remit (i) in cash, (ii) by tendering (or attesting to the ownership of) shares of Stock that the Company determines will not result in unfavorable accounting treatment or (iii) by the Company withholding shares of Stock, an amount sufficient to satisfy all foreign, federal, state, local and other governmental withholding tax requirements relating thereto (if any) and, exclusively in the case of an award that does not constitute a deferral of compensation subject to Section 409A, any or all indebtedness or other obligation of the Eligible Director to the Company or any of its subsidiaries. In the case of any award that constitutes a deferral of compensation subject to Section 409A, the Company may not withhold shares of Stock to satisfy obligations that an Eligible Director owes to the Company or any of its subsidiaries other than with respect to taxes or other governmental charges imposed on amounts received by the Eligible Director pursuant to such award, except to the extent such withholding is not prohibited by Section 409A and would not cause the Eligible Director to recognize income for United States federal income tax purposes prior to the time of payment of the award or to incur interest or additional tax under Section 409A. Any shares tendered or withheld pursuant to this Section 14 will be valued at Fair Market Value on the relevant payment or exercise date, as applicable.

Section 15. Plan Amendments and Termination

The Board may suspend or terminate the Plan at any time, in whole or in part. Termination of the Plan shall not adversely affect the rights of Eligible Directors in Career Stock Unit Accounts, Cash Accounts and Current Stock Unit Accounts outstanding at the time of termination. Notwithstanding any termination of the Plan, distributions to Eligible Directors in respect of their Career Stock Unit Accounts, Cash Accounts and Current Stock Unit Accounts shall be made at the times and in the manner provided herein.

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The Board may also alter, amend or modify the Plan at any time. These amendments may include (but are not limited to) changes that the Board considers necessary or advisable as a result of changes in, or the adoption or interpretation of, any law, regulation, ruling, judicial decision or accounting standards (collectively, “Legal Requirements”). The Board may not amend or modify the Plan in a manner that would materially impair an Eligible Director’s rights in any Career Stock Unit Account, Cash Account or Current Stock Unit Account without the Eligible Director’s consent; provided, however, that the Board may, without an Eligible Director’s consent, amend or modify the Plan in any manner that it considers necessary or advisable to comply with any Legal Requirement or to ensure that amounts credited to an Eligible Director’s Career Stock Unit Account, Cash Account or Current Stock Unit Account are not subject to federal, state or local income tax prior to payment.

Notwithstanding the foregoing, if any provision of this Plan would, in the reasonable, good faith judgment of the Company, result in or likely result in the imposition on any Eligible Director or any other person of any tax, interest or penalty under Section 409A, the Company may reform this Plan or any provision hereof, without the consent of any Eligible Director, in the manner that the Company reasonably and in good faith determines to be necessary or advisable to avoid the imposition of such tax, interest or penalty; provided, however, that any such reformation shall, to the maximum extent the Company reasonably and in good faith determines to be possible, retain the economic and tax benefits to the Eligible Directors hereunder while not materially increasing the cost to the Company of providing such benefits to the Eligible Directors.

The Board may delegate to the Plan Administrator its authority under this Section 15 to amend any provision of the Plan for which approval by the Board (or a committee thereof) is not required under applicable law or the rules of any national securities exchange on which the Stock is traded.

Section 16. Listing, Registration and Legal Compliance

If the Plan Administrators shall at any time determine that any Consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the granting of any award under the Plan, the issuance or purchase of shares or other rights hereunder or the taking of any other action hereunder (each such action being hereinafter referred to as a “Plan Action”), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained. The term “Consent” as used herein with respect to any Plan Action means (i) the listing, registrations or qualifications in respect thereof upon any securities exchange or under any foreign, federal, state or local law, rule or regulation, (ii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies, or (iii) any and all written agreements and representations by an Eligible Director with respect to the disposition of Stock or with respect to any other matter, which the Plan Administrators shall deem necessary or desirable in order to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made.

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Section 17. Right Reserved

Nothing in the Plan shall confer upon any Eligible Director the right to continue as a director of the Company or affect any right that the Company or any Eligible Director may have to terminate the service of such Eligible Director.

Section 18. Rights as a Stockholder

Except as otherwise provided by the terms of any applicable Benefit Plan Trust, an Eligible Director shall not, by reason of any stock option, Director Stock, Stock Unit or Stock Amount, have any rights as a stockholder of the Company until Stock has been issued to such Eligible Director.

Section 19. Unfunded Plan

The Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company and any Eligible Director or other person. To the extent any person holds any rights by virtue of a pending grant or deferral under the Plan, such rights shall be no greater than the rights of an unsecured general creditor of the Company. Notwithstanding the foregoing, the Company may (but shall not be obligated to) contribute shares of Stock corresponding to Stock Units to a Benefit Plan Trust, provided that the principal and income of any such Benefit Plan Trust shall be subject to the claims of general creditors of the Company. The Company may amend the terms of any Benefit Plan Trust as applicable to any one or more Eligible Directors in order to procure favorable tax treatment for such Eligible Director(s) or to comply with the laws applicable in any non-U.S. jurisdiction.

Section 20. Governing Law

The Plan is deemed adopted, made and delivered in New York and shall be governed by the laws of the State of New York applicable to agreements made and to be performed entirely within such state.

Section 21. Severability

If any part of the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan not declared to be unlawful or invalid. Any Section or part of a Section so declared to be unlawful or invalid shall, if possible, be construed in a manner that will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

Section 22. Notices

All notices and other communications hereunder shall be given in writing and shall be deemed given when personally delivered against receipt or five days after having been mailed by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: (a) if to the Company: Morgan Stanley, 1585 Broadway, New York, New York 10036, Attention: Corporate Secretary; and (b) if to an Eligible Director, at the Eligible Director’s principal residential address last furnished to the Company. Either party may, by notice, change the address to which notice to such party is to be given.

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Section 23. Section Headings

The Section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said Sections.

Section 24. Definitions

As used in the Plan, the following terms shall have the meanings indicated below:

“Account” means Cash Account, Career Stock Unit Account or Current Stock Unit Account, as applicable.

“Adjusted Deferred Amount” has the meaning set forth in Section 9(m).

“Annual Meeting” means an annual meeting of the Company’s stockholders.

“Annual Retainer” means a cash retainer for services as a member of the Board.

“Annual Service Period” means the period from the immediately preceding Annual Meeting until the next succeeding Annual Meeting.

“Annual Stock Units” means the Stock Units awarded to an Eligible Director pursuant to Section 6(b).

“Average Daily Cash Balance” means the sum of the daily balances for a Cash Account for any quarter or shorter period for which the calculation is made, divided by the number of days on which a positive balance existed in such Cash Account.

“Awards” means Initial Awards and Subsequent Awards.

“Benefit Plan Trust” means any trust established by the Company under which Eligible Directors, or Eligible Directors and participants in designated employee benefit plans of the Company, constitute the principal beneficiaries.

“Board” means the board of directors of the Company.

“Career Stock Unit Account” means a bookkeeping account to which Initial Stock Units and Annual Stock Units are credited pursuant to Section 6(a) and Section 6(b).

“Career Stock Units” has the meaning set forth in Section 6(b).

“Cash Account” means a bookkeeping account to which Meeting Fees are credited pursuant to Section 9(m) or which had a positive balance as of the Stock Unit Transition Date.

“Cause” means, with respect to any Eligible Director, termination of service on the Board on account of any act of (A) fraud or intentional misrepresentation, or (B) embezzlement, misappropriation or conversion of assets or opportunities of the Company or any affiliate.

15

“Committee Retainer” means a cash retainer for services as a member or chair of any committee of the Board.

“Company” has the meaning set forth in Section 1.

“Consent” has the meaning set forth in Section 16.

“Current Stock Unit Account” means a bookkeeping account to which Deferred Amounts are credited pursuant to Section 6(a), Section 6(b) or Section 9(b).

“Current Stock Units” means Annual Stock Units and Initial Stock Units credited to the Eligible Director’s Current Stock Unit Account pursuant to Section 6(a) or Section 6(b).

“Deferral Election” means a deferral election by an Eligible Director made with respect to any Retainers, Director Stock, Initial Stock Units and/or Annual Stock Units.

“Deferral Election Form” means an election form submitted by an Eligible Director to the Secretary with respect to any Retainers, Director Stock, or Stock Units.

“Deferred Amount” means any amount, in dollars, of Retainers, Initial Stock Units and/or Annual Stock Units that an Eligible Director elects to defer, as indicated on the relevant Deferral Election Form.

“Director Stock” means shares of Stock awarded to an Eligible Director for service on the Board. As of the Stock Unit Transition Date, no additional Director Stock will be awarded under the Plan, but Director Stock remains one of the types of award that the stockholders of the Company have authorized for the Plan, and nothing herein shall impair the authority of the Board under Section 15 to amend the Plan in the future to provide for awards of Director Stock without obtaining additional stockholder approval.

“Disability” means a “permanent and total disability” as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

“Distribution Commencement Date” means the date that an Eligible Director elects as the date on which distribution of Deferred Amounts should begin, as indicated on the relevant Deferral Election Form.

“Dividend Equivalents” has the meaning set forth in Section 9(i).

“Elective Stock Units” means Stock Units that an Eligible Director elects to receive in lieu of Retainers pursuant to Section 9(a).

“Eligible Directors” has the meaning set forth in Section 2.

“Fair Market Value” has the meaning set forth in Section 12.

“Governmental Employer” has the meaning set forth in Section 8(b).

16

“Governmental Service Resignation” has the meaning set forth in Section 8(b).

“Initial Awards” means any awards made to an Eligible Director pursuant to Section 6(a), including any predecessor version thereof.

“Initial Stock Units” means the Stock Units awarded to an Eligible Director pursuant to Section 6(a).

“Interest Equivalent” means an additional amount to be credited to a Cash Account calculated in accordance with Section 9(m).

“Lead Director Retainer” means a cash retainer for services as the lead director of the Board.

“Meeting Fees” means fees (if any) payable to an Eligible Director for participation in meetings of the Board or any committee thereof.

“Normal Retirement” means the termination of service on the Board for retirement at or after attaining age 65, other than for Cause, Disability or death.

“Plan” has the meaning set forth in Section 1.

“Rate of Interest” means the time weighted average interest rate paid by the Company for a quarter, or such shorter period from the end of the preceding quarter to an Eligible Director’s Service Termination Date, to institutions from which it borrows funds.

“Retainer” means the Annual Retainer, the Committee Retainer and/or the Lead Director Retainer, as applicable.

“Retainer Payment Date” means, with respect to any Retainer, the date as of which an Eligible Director becomes entitled to payment of Retainer.

“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the rules, regulations and guidance thereunder (or any successor provisions thereto).

“Service Termination Date” means the date of an Eligible Director’s termination of service on the Board or such later date as constitutes the Eligible Director’s separation from service with the Company for purposes of Section 409A.

“Stock” means the Company’s common stock, par value $0.01 per share, and any other shares into which such stock shall thereafter be changed by reason of any merger, reorganization, recapitalization, consolidation, split-up, combination of shares or similar event as set forth in and in accordance with Section 4.

“Stock Amount” means the percentage of the Retainers that an Eligible Director elects to have paid in Stock, as indicated on the relevant Stock Election Form.

17

“Stock Election” means an election by an Eligible Director to receive all or a portion of the Eligible Director’s Retainers in shares of Stock.

“Stock Election Form” means the election form submitted by an Eligible Director to the Secretary as provided in Section 11(a).

“Stock Option Transition Date” has the meaning set forth in Section 5(a).

“Stock Unit Transition Date” means November 16, 2009.

“Stock Units” means Initial Stock Units, Annual Stock Units and/or Elective Stock Units, as applicable.

“Subsequent Awards” means any awards made to an Eligible Director pursuant to Section 6(b), including any predecessor version thereof.

18

EX-10.2

Exhibit 10.2

MORGAN STANLEY SCHEDULE OF NON-EMPLOYEE DIRECTORS ANNUAL COMPENSATION

Effective as of August 1, 2016

RETAINER(1)	AMOUNT
Service as a Director	$	75,000
Service as Chair of Audit Committee or Risk Committee	$	30,000
Service as Chair of Compensation, Management Development and Succession Committee; Nominating and Governance Committee; or Operations and Technology Committee	$	20,000
Service as Member of Audit Committee, Compensation, Management Development and Succession Committee; Nominating and Governance Committee; Operations and Technology Committee; or Risk Committee	$	10,000
Service as Lead Director	$	50,000

⁽¹⁾  The retainer shall be paid semi-annually in arrears for the period from the immediately preceding Annual Meeting of Shareholders until the next succeeding Annual Meeting of Shareholders. 50% of a non-employee director’s retainer shall be made on (or promptly after) the business day coincident with or first following the six month anniversary of the immediately preceding Annual Meeting of Shareholders. The remaining portion of a non-employee director’s retainer shall be made on (or promptly after) the next succeeding Annual Meeting of Shareholders.

In the event a non-employee director joins the Board at a time other than an Annual Meeting of Shareholders, or commences service on an additional Board committee, such director shall be entitled to receive a prorated retainer for service on the Board or such Board committee, as applicable, until the next succeeding Annual Meeting of Shareholders semi-annually in arrears. Such retainer shall be prorated for service during the period beginning on the first day of the calendar month during which the non-employee director joins the Board, or commences service on such Board committee, until the last day of the calendar month immediately preceding the calendar month during which the retainer is payable in accordance with the payment schedule set forth in the immediately preceding paragraph.

In the event a non-employee director terminates from service on the Board, or terminates from service on a Board committee, at a time other than an Annual Meeting of Shareholders, such director shall be entitled to receive a prorated retainer for service on the Board and/or any such Board committee. Such retainer shall be prorated for service during the period beginning on the first day of the calendar month during which the last retainer payment date occurs until the last day of the calendar month immediately preceding the calendar month during which the director’s Board and/or Board committee service termination date occurs and shall be made on (or promptly after) the director’s Board and/or Board committee service termination date.

Notwithstanding the foregoing, a non-employee director may elect to receive all or a portion of the retainer on a deferred basis under the Directors’ Equity Capital Accumulation Plan.

EX-12

EXHIBIT 12

Morgan Stanley

Ratio of Earnings to Fixed Charges

and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(dollars in millions)

(unaudited)

	Six Months Ended June 30, 2016		2015		2014		2013		2012		2011
Ratio of Earnings to Fixed Charges
Earnings:
Income (loss) before income taxes	$	4,135	$	8,229	$	3,235	$	3,502	$	(29)	$	6,647
Add: Fixed charges, net		1,725		2,987		3,935		4,695		6,152		7,128
Income before income taxes and fixed charges, net	$	5,860	$	11,216	$	7,170	$	8,197	$	6,123	$	13,775
Fixed Charges:
Total interest expense	$	1,602	$	2,742	$	3,679	$	4,414	$	5,858	$	6,842
Interest factor in rents		123		245		256		281		294		286
Total fixed charges	$	1,725	$	2,987	$	3,935	$	4,695	$	6,152	$	7,128
Ratio of earnings to fixed charges		3.4		3.8		1.8		1.7		1.0		1.9
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings:
Income (loss) before income taxes	$	4,135	$	8,229	$	3,235	$	3,502	$	(29)	$	6,647
Add: Fixed charges, net		1,725		2,987		3,935		4,695		6,152		7,128
Income before income taxes and fixed charges, net	$	5,860	$	11,216	$	7,170	$	8,197	$	6,123	$	13,775
Fixed Charges:
Total interest expense	$	1,602	$	2,742	$	3,679	$	4,414	$	5,858	$	6,842
Interest factor in rents		123		245		256		281		294		286
Preferred stock dividends		352		610		311		150		96		385
Total fixed charges and preferred stock dividends	$	2,077	$	3,597	$	4,246	$	4,845	$	6,248	$	7,513
Ratio of earnings to fixed charges and preferred stock dividends		2.8		3.1		1.7		1.7		1.0		1.8

Income (loss) before income taxes does not include dividends on preferred securities, income (loss) from discontinued operations, noncontrolling interests and income or loss from equity investees.

Fixed charges consist of interest cost, including interest on deposits, interest from discontinued operations, dividends on preferred securities, and that portion of rent expense to be representative of the interest factor.

Fixed charges do not include interest expense on uncertain tax liabilities as the Firm records these amounts within the Provision for income taxes.

The preferred stock dividends amount represents pre-tax earnings required to cover dividends on preferred stock.

EX-15

EXHIBIT 15

To the Board of Directors and Shareholders of Morgan Stanley:

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited condensed consolidated financial information of Morgan Stanley and subsidiaries (the “Company”) for the three-month and six-month periods ended June 30, 2016 and 2015, and have issued our report dated August 3, 2016. As indicated in such report, because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, is being incorporated by reference in the following Registration Statements of the Company:

Filed on Form S-3: Registration Statement No. 33-57202 Registration Statement No. 33-60734 Registration Statement No. 33-89748 Registration Statement No. 33-92172 Registration Statement No. 333-07947 Registration Statement No. 333-27881 Registration Statement No. 333-27893 Registration Statement No. 333-27919 Registration Statement No. 333-46403 Registration Statement No. 333-46935 Registration Statement No. 333-76111 Registration Statement No. 333-75289 Registration Statement No. 333-34392 Registration Statement No. 333-47576 Registration Statement No. 333-83616 Registration Statement No. 333-106789 Registration Statement No. 333-117752 Registration Statement No. 333-129243 Registration Statement No. 333-131266 Registration Statement No. 333-155622 Registration Statement No. 333-156423 Registration Statement No. 333-178081 Registration Statement No. 333-200365   Filed on Form S-4: Registration Statement No. 333-25003 Filed on Form S-8: Registration Statement No. 33-63024 Registration Statement No. 33-63026 Registration Statement No. 33-78038 Registration Statement No. 33-79516 Registration Statement No. 33-82240 Registration Statement No. 33-82242 Registration Statement No. 33-82244 Registration Statement No. 333-04212 Registration Statement No. 333-28141 Registration Statement No. 333-28263 Registration Statement No. 333-62869 Registration Statement No. 333-78081 Registration Statement No. 333-95303 Registration Statement No. 333-85148 Registration Statement No. 333-85150 Registration Statement No. 333-108223 Registration Statement No. 333-142874 Registration Statement No. 333-146954 Registration Statement No. 333-159503 Registration Statement No. 333-159504 Registration Statement No. 333-159505 Registration Statement No. 333-168278 Registration Statement No. 333-172634 Registration Statement No. 333-177454 Registration Statement No. 333-183595 Registration Statement No. 333-188649 Registration Statement No. 333-192448 Registration Statement No. 333-204504 Registration Statement No. 333-211723

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche LLP

New York, New York

August 3, 2016

EX-31.1

EXHIBIT 31.1

Certification

I, James P. Gorman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Morgan Stanley;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2016

/s/ JAMES P. GORMAN

James P. Gorman

Chairman of the Board and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification

I, Jonathan Pruzan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Morgan Stanley;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2016

/s/ JONATHAN PRUZAN

Jonathan Pruzan

Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1            

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley (the “Company”) on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Gorman, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JAMES P. GORMAN        

James P. Gorman

Chairman of the Board and Chief

Executive Officer

Dated: August 3, 2016

EX-32.2

EXHIBIT 32.2            

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley (the “Company”) on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Pruzan, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JONATHAN PRUZAN                

Jonathan Pruzan

Executive Vice President and

Chief Financial Officer

Dated: August 3, 2016

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	MS
Entity Registrant Name	MORGAN STANLEY
Entity Central Index Key	0000895421
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,911,808,935

XML

Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Investment banking	$ 1,224	$ 1,614	$ 2,331	$ 2,971
Trading	2,746	2,973	4,811	6,623
Investments	126	261	92	527
Commissions and fees	1,020	1,158	2,075	2,344
Asset management, distribution and administration fees	2,637	2,742	5,257	5,423
Other	243	297	323	468
Total non-interest revenues	7,996	9,045	14,889	18,356
Interest income	1,667	1,386	3,414	2,870
Interest expense	754	688	1,602	1,576
Net interest	913	698	1,812	1,294
Net revenues	8,909	9,743	16,701	19,650
Non-interest expenses:
Compensation and benefits	4,015	4,405	7,698	8,929
Occupancy and equipment	329	351	658	693
Brokerage, clearing and exchange fees	484	487	949	950
Information processing and communications	429	438	871	853
Marketing and business development	154	179	288	329
Professional services	547	598	1,061	1,084
Other	468	558	955	1,230
Total non-interest expenses	6,426	7,016	12,480	14,068
Income from continuing operations before income taxes	2,483	2,727	4,221	5,582
Provision for income taxes	833	894	1,411	1,281
Income from continuing operations	1,650	1,833	2,810	4,301
Income (loss) from discontinued operations, net of income taxes	(4)	(2)	(7)	(7)
Net income	1,646	1,831	2,803	4,294
Net income applicable to noncontrolling interests	64	24	87	93
Net income applicable to Morgan Stanley	1,582	1,807	2,716	4,201
Preferred stock dividends and other	157	142	235	222
Earnings applicable to Morgan Stanley common shareholders	$ 1,425	$ 1,665	$ 2,481	$ 3,979
Earnings per basic common share:
Income from continuing operations	$ 0.77	$ 0.87	$ 1.33	$ 2.07
Income (loss) from discontinued operations	(0.01)	0	(0.01)	0
Earnings per basic common share	0.76	0.87	1.32	2.07
Earnings per diluted common share:
Income from continuing operations	0.75	0.85	1.3	2.03
Income (loss) from discontinued operations	0	0	0	0
Earnings per diluted common share	0.75	0.85	1.3	2.03
Dividends declared per common share	$ 0.15	$ 0.15	$ 0.3	$ 0.25
Average common shares outstanding:
Basic	1,866	1,919	1,875	1,922
Diluted	1,899	1,960	1,907	1,962

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016		Jun. 30, 2015
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 1,646	$ 1,831	$ 2,803		$ 4,294
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	131	34	317	[1]	(188)	[1]
Change in net unrealized gains (losses) on available for sale securities	143	(228)	538	[2]	(28)	[2]
Pension, postretirement and other	(5)	(3)	(4)		(1)
Change in net debt valuation adjustments	145	0	348	[3]	0	[3]
Total other comprehensive income (loss)	414	(197)	1,199		(217)
Comprehensive income	2,060	1,634	4,002		4,077
Net income applicable to noncontrolling interests	64	24	87		93
Other comprehensive income (loss) applicable to noncontrolling interests	81	(16)	136		(18)
Comprehensive income applicable to Morgan Stanley	1,915	1,626	3,779		4,002
Parenthetical Disclosures
Foreign currency translation adjustments, provision for (benefit from) income taxes	(59)	(54)	(174)		120
Change in net unrealized gains (losses) on securities available for sale, provision for (benefit from) income taxes	84	$ (137)	314		$ (16)
Debt valuation adjustments, provision for (benefit from) income taxes	$ 80		$ 200

[1] Amounts include Provision for (benefit from) income taxes of $ (59 ) million and $ (54) million in the quarter ended June 30, 2016 (“current quarter”) and the quarter ended June 30, 2015 (“prior year quarter”), respectively, and $ (174 ) million and $ 120 million in the six months ended June 30, 2016 (“current year period”) and the six months ended June 30, 2015 (“prior year period”), respectively.

[2] Amounts include Provision for (benefit from) income taxes of $ 84 mill ion and $ (137) million in the current quarter and prior year quarter, respectively, and $ 314 million and $ (16) million in the current year period and prior year period, respectively .

[3] Debt valuation adjustments (“DVA”) represent the change in the fair v alue resulting from fluctuations in the Firm’s credit spreads and other credit factors related to liabilities carried at fair value, primarily certain Long-term and Short-term borrowings. Amounts include Provision for (benefit from) income taxes of $ 80 mil lion and $ 200 million in the current quarter and current year period, respectively . See Notes 2 and 14 for further information.

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 27,597	$ 19,827
Interest bearing deposits with banks	28,536	34,256
Trading assets, at fair value ($141,543 and $127,627 were pledged to various parties)	256,794	239,505
Investment securities (includes $67,726 and $66,759 at fair value)	80,144	71,983
Securities purchased under agreements to resell (includes $555 and $806 at fair value)	97,589	87,657
Securities borrowed	131,281	142,416
Customer and other receivables	52,827	45,407
Loans
Held for investment (net of allowances of $323 and $225)	77,283	72,559
Held for sale	15,882	13,200
Goodwill	6,581	6,584
Intangible assets (net of accumulated amortization of $2,279 and $2,130) (includes $3 and $5 at fair value)	2,833	2,984
Other assets	51,526	51,087
Total assets	828,873	787,465
Liabilities
Deposits (includes $95 and $125 at fair value)	152,693	156,034
Short-term borrowings (includes $511 and $1,648 at fair value)	880	2,173
Trading liabilities, at fair value	140,662	128,455
Securities sold under agreements to repurchase (includes $699 and $683 at fair value)	50,328	36,692
Securities loaned	17,241	19,358
Other secured financings (includes $2,921 and $2,854 at fair value)	9,901	9,464
Customer and other payables	201,189	186,626
Other liabilities and accrued expenses	14,112	18,711
Long-term borrowings (includes $37,804 and $33,045 at fair value)	163,492	153,768
Total liabilities	750,498	711,281
Commitments and contingent liabilities
Morgan Stanley shareholders' equity:
Preferred stock	7,520	7,520
Common stock, $0.01 par value:Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,917,509,492 and 1,920,024,027	20	20
Additional Paid-in capital	22,697	24,153
Retained earnings	51,410	49,204
Employee stock trusts	2,873	2,409
Accumulated other comprehensive loss	(905)	(1,656)
Common stock held in treasury, at cost, $0.01 par value (121,384,487 and 118,869,952 shares)	(3,626)	(4,059)
Common stock issued to employee trusts	(2,873)	(2,409)
Total Morgan Stanley shareholders' equity	77,116	75,182
Noncontrolling interests	1,259	1,002
Total equity	78,375	76,184
Total liabilities and equity	$ 828,873	$ 787,465

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Condensed Consolidated Statements of Financial Condition
Trading assets pledged to various parties	$ 141,543	$ 127,627
Total AFS securities, fair value	67,726	66,759
Securities purchased under agreement to resell, fair value	555	806
Allowance for loan losses	323	225
Intangible assets, accumulated amortization	2,279	2,130
Intangible assets, fair value	3	5
Deposits, fair value	95	125
Short-term borrowings, fair value	511	1,648
Securities sold under agreement to repurchase, fair value	699	683
Other secured financings, fair value	2,921	2,854
Long-term borrowings, fair value	$ 37,804	$ 33,045
Common stock par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	3,500,000,000	3,500,000,000
Common stock, shares issued	2,038,893,979	2,038,893,979
Common stock, shares outstanding	1,917,509,492	1,920,024,027
Common stock held in treasury, shares	121,384,487	118,869,952

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Consolidated Statements of Changes in Total Equity - USD ($) $ in Millions		Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Employee Stock Trusts	Accumulated Other Comprehensive Income (Loss)	Common Stock Held in Treasury at Cost	Common Stock Issued to Employee Stock Trusts	Non-controlling Interests
BALANCE AT at Dec. 31, 2014		$ 72,104	$ 6,020	$ 20	$ 24,249	$ 44,625	$ 2,127	$ (1,248)	$ (2,766)	$ (2,127)	$ 1,204
Net income applicable to Morgan Stanley		4,201				4,201
Net income applicable to noncontrolling interests		93									93
Dividends		(720)				(720)
Shares issued under employee plans and related tax effects		846			(577)		314		1,423	(314)
Repurchases of common stock and employee tax withholdings		(1,473)							1,473
Net change in Accumulated other comprehensive income (loss)		(217)						(199)			(18)
Issuance of preferred stock		1,493	1,500		(7)
Deconsolidation of certain legal entities associated with a real estate fund		(191)									(191)
Other net decreases		(69)			(10)						(59)
BALANCE AT at Jun. 30, 2015		76,067	7,520	20	23,655	48,106	2,441	(1,447)	(2,816)	(2,441)	1,029
BALANCE AT at Dec. 31, 2015		76,184	7,520	20	24,153	49,204	2,409	(1,656)	(4,059)	(2,409)	1,002
Cumulative adjustment for accounting change related to DVA | Accounting standard early adoption	[1]	0				312		(312)
Net adjustment for accounting change related to consolidation	[2]	106									106
Net income applicable to Morgan Stanley		2,716				2,716
Net income applicable to noncontrolling interests		87									87
Dividends		(822)				(822)
Shares issued under employee plans and related tax effects		606			(1,456)		464		2,062	(464)
Repurchases of common stock and employee tax withholdings		(1,629)							(1,629)
Net change in Accumulated other comprehensive income (loss)		1,199						1,063			136
Other net decreases		(72)									(72)
BALANCE AT at Jun. 30, 2016		$ 78,375	$ 7,520	$ 20	$ 22,697	$ 51,410	$ 2,873	$ (905)	$ (3,626)	$ (2,873)	$ 1,259

[1] In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities , a cumulative catch up adjustment was recorded as of January 1, 2016 to move the cumulative DVA amount, net of noncontrolling interest and tax, related to outstanding liabilities under the fair value option election from Retained earnings into Accumulated other comprehensive income (loss) (“AOCI”). See Notes 2 and 14 for further information.

[2] In accordance with the accounting update Amendments to the Consolidation Analysis , a net adjustment was recorded as of January 1, 2016 to consolidate or dec onsolidate certain entities under the new guidance . See Note 2 for further information.

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 2,803	$ 4,294
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Income from equity method investments	(1)	(83)
Compensation payable in common stock and options	492	611
Depreciation and amortization	879	654
Net gain on sale of available for sale securities	(82)	(55)
Impairment charges	67	83
Provision for credit losses on lending activities	131	38
Other operating adjustments	218	37
Changes in assets and liabilities:
Trading assets, net of Trading liabilities	(333)	25,115
Securities borrowed	11,135	(7,261)
Securities loaned	(2,117)	(2,068)
Customer and other receivables and other assets	(10,537)	(601)
Customer and other payables and other liabilities	9,907	(1,482)
Securities purchased under agreements to resell	(9,932)	(23,472)
Securities sold under agreements to repurchase	13,636	(4,263)
Net cash provided by (used for) operating activities	16,266	(8,453)
Proceeds from (payments for):
Other assets - Premises, equipment and software net	(645)	(620)
Loans:
Changes in loans, net	(4,724)	(9,082)
Investment securities:
Purchases	(30,700)	(26,832)
Proceeds from sales	20,274	26,501
Proceeds from paydowns and maturities	3,507	2,796
Other investing activities	(126)	(97)
Net cash used for investing activities	(12,414)	(7,334)
Net proceeds from (payments for):
Short-term borrowings	(1,293)	861
Noncontrolling interests	(43)	(60)
Other secured financings	(69)	(280)
Deposits	(3,341)	5,659
Proceeds from:
Excess tax benefits associated with stock-based awards	42	176
Derivatives financing activities	0	312
Issuance of preferred stock, net of issuance costs	0	1,493
Issuance of long-term borrowings	20,628	22,909
Payments for:
Long-term borrowings	(15,900)	(12,963)
Derivatives financing activities	(120)	(257)
Repurchases of common stock and employee tax withholdings	(1,629)	(1,473)
Cash dividends	(791)	(673)
Net cash provided by (used for) financing activities	(2,516)	15,704
Effect of exchange rate changes on cash and cash equivalents	714	(542)
Net increase (decrease) in cash and cash equivalents	2,050	(625)
Cash and cash equivalents, at beginning of period	54,083	46,984
Cash and cash equivalents, at end of period	56,133	46,359
Cash and cash equivalents include:
Cash and due from banks	27,597	19,145
Interest bearing deposits with banks	28,536	27,214
Cash and cash equivalents, at end of period	56,133	46,359
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	1,082	1,027
Cash payments for income taxes, net of refunds	$ 340	$ 342

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Introduction and Basis of Presentation

6 Months Ended

Jun. 30, 2016

Introduction and Basis of Presentation

Introduction And Basis Of Presentation

1.Introduction and Basis of Presentation

The Firm

Morgan Stanley, a financial holding company, is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley (the “Parent”) together with its consolidated subsidiaries.

For a description of the clients and principal products and services of each of the Firm’s business segments, see Note 1 to the consolidated financial statements in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”).

Basis of Financial Information

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require the Firm to make estimates and assumptions regarding the valuations of certain financial instruments, the valuation of goodwill and intangible assets, compensation, deferred tax assets, the outcome of legal and tax matters, allowance for credit losses and other matters that affect its consolidated financial statements and related disclosures. The Firm believes that the estimates utilized in the preparation of its consolidated financial statements are prudent and reasonable. Actual results could differ materially from these estimates. Intercompany balances and transactions have been eliminated.

The accompanying consolidated financial statements should be read in conjunction with the Firm’s consolidated financial statements and notes thereto included in the 2015 Form 10-K. Certain footnote disclosures included in the 2015 Form 10-K have been condensed or omitted from the consolidated financial statements as they are not required for interim reporting under U.S. GAAP. The consolidated financial statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the interim period. The results of operations for interim periods are not necessarily indicative of results for the entire year.

Consolidation

The consolidated financial statements include the accounts of the Firm, its wholly owned subsidiaries and other entities in which the Firm has a controlling financial interest, including certain variable interest entities (“VIE”) (see Note 12). For consolidated subsidiaries that are less than wholly owned, the third-party holdings of equity interests are referred to as noncontrolling interests. The net income attributable to noncontrolling interests for such subsidiaries is presented as Net income (loss) applicable to noncontrolling interests in the consolidated statements of income. The portion of shareholders’ equity of such subsidiaries that is attributable to noncontrolling interests for such subsidiaries is presented as noncontrolling interests, a component of total equity, in the consolidated balance sheets.

For a discussion of the Firm’s VIEs and its significant regulated U.S. and international subsidiaries, see Notes 1 and 2 to the consolidated financial statements in the 2015 Form 10-K. See also Note 2 herein.

Consolidated Statements of Cash Flows Presentation

The adoption of the accounting update, Amendments to the Consolidation Analysis (see Note 2) on January 1, 2016, resulted in a net noncash increase in total assets of $126 million. In the prior year quarter, the Firm deconsolidated approximately $191 million in net assets previously attributable to nonredeemable noncontrolling interests that were related to a real estate fund sponsored by the Firm. The deconsolidation resulted in a non-cash reduction of assets of $169 million.

Global Oil Merchanting Business    

As a result of entering into a definitive agreement to sell the global oil merchanting unit of the commodities division to Castleton Commodities International LLC, on May 11, 2015, the Firm recognized an impairment charge of $59 million in Other revenues during the prior quarter and prior year period, to reduce the carrying amount of the unit to its estimated fair value less costs to sell. The Firm closed the transaction on November 1, 2015. The transaction did not meet the criteria for discontinued operations and did not have a material impact on the Firm’s financial results.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Summary of Significant Accounting Policies

Significant Accounting Policies

2.Significant Accounting Policies

For a detailed discussion about the Firm’s significant accounting policies, see Note 2 to the consolidated financial statements in the 2015 Form 10-K.

During the current year period, other than the following, there were no significant updates made to the Firm’s significant accounting policies.

Accounting Standards Adopted

The Firm adopted the following accounting updates as of January 1, 2016.

• Recognition and Measurement of Financial Assets and Financial Liabilities.In January 2016, the Financial Accounting Standards Board (the “FASB”) issued an accounting update that changes the requirements for the recognition and measurement of certain financial assets and financial liabilities. The Firm early adopted the provision in this guidance relating to liabilities measured at fair value pursuant to a fair value option election that requires presenting unrealized DVA in Other comprehensive income (loss) (“OCI”), a change from the previous requirement to present DVA in net income. Realized DVA amounts will be recycled from AOCI to Trading revenues. DVA amounts from periods prior to adoption remain in Trading revenues as previously reported. A cumulative catch up adjustment, net of noncontrolling interests and tax, of $312 million was recorded as of January 1, 2016 to move the cumulative DVA loss amount from Retained earnings into AOCI.

Other provisions of this rule may not be early adopted and will be effective January 1, 2018, and are not expected to have a material impact on the consolidated financial statements.

• Amendments to the Consolidation Analysis.In February 2015, the FASB issued an accounting update that provides a new consolidation model for certain entities, such as investment funds and limited partnerships. The adoption on January 1, 2016, increased total assets by $131 million, reflecting consolidations of $206 million net of deconsolidations of $75 million. The consolidations resulted primarily from certain funds in Investment Management where the Firm acts as a general partner.

• Simplifying the Presentation of Debt Issuance Costs.In April 2015, the FASB issued an accounting update that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, instead of as an asset as was previously required. This guidance became effective for the Firm beginning January 1, 2016 and did not have a material impact in the consolidated financial statements.

The Firm adopted the following accounting updates as of January 1, 2016, which did not have an impact in the consolidated financial statements.

• Simplifying the Accounting for Measurement-Period Adjustments.

• Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity.

• Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity.

• Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.

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Fair Value Disclosures

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures

Fair Value Disclosures

3.Fair Values

Fair Value Measurements

For a description of the valuation techniques applied to the Firm’s major categories of assets and liabilities measured at fair value on a recurring basis, see Note 3 to the consolidated financial statements in the 2015 Form 10-K. During the current quarter and current year period, there were no significant updates made to the Firm’s valuation techniques.

Assets and Liabilities Measured at Fair Value on a Recurring Basis
				Level 1			Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at June 30, 2016
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. government and agency securities:
		U.S. Treasury securities		$	24,565	$	—	$	—	$	—	$	24,565
		U.S. agency securities			795		22,085		20		—		22,900
			Total U.S. government and agency securities		25,360		22,085		20		—		47,465
	Other sovereign government obligations				20,942		6,607		2		—		27,551
	Corporate and other debt:
		State and municipal securities			—		1,943		10		—		1,953
		Residential mortgage-backed securities			—		586		216		—		802
		Commercial mortgage-backed securities			—		961		51		—		1,012
		Asset-backed securities			—		142		88		—		230
		Corporate bonds			—		11,751		276		—		12,027
		Collateralized debt and loan obligations			—		443		109		—		552
		Loans and lending commitments(1)			—		3,879		5,418		—		9,297
		Other debt			—		827		528		—		1,355
			Total corporate and other debt		—		20,532		6,696		—		27,228
	Corporate equities(2)				100,018		367		572		—		100,957
	Securities received as collateral				10,121		7		—		—		10,128
	Derivative and other contracts:
		Interest rate contracts			791		462,243		540		—		463,574
		Credit contracts			—		16,157		304		—		16,461
		Foreign exchange contracts			140		76,264		101		—		76,505
		Equity contracts			1,368		40,524		637		—		42,529
		Commodity contracts			2,847		8,605		4,057		—		15,509
		Other			—		16		—		—		16
		Netting(3)			(4,184)		(505,871)		(2,537)		(63,844)		(576,436)
			Total derivative and other contracts		962		97,938		3,102		(63,844)		38,158
	Investments(4):
		Principal investments			21		19		769		—		809
		Other			295		559		205		—		1,059
			Total investments		316		578		974		—		1,868
	Physical commodities				—		193		—		—		193
		Total trading assets(4)			157,719		148,307		11,366		(63,844)		253,548
AFS securities					31,062		36,664		—		—		67,726
Securities purchased under agreements to resell					—		555		—		—		555
Intangible assets					—		3		—		—		3
Total assets measured at fair value				$	188,781	$	185,529	$	11,366	$	(63,844)	$	321,832
Liabilities at Fair Value
Deposits				$	—	$	65	$	30	$	—	$	95
Short-term borrowings					—		511		—		—		511
Trading liabilities:
	U.S. government and agency securities:
		U.S. Treasury securities			12,983		—		—		—		12,983
		U.S. agency securities			358		111		—		—		469
			Total U.S. government and agency securities		13,341		111		—		—		13,452
	Other sovereign government obligations				15,885		2,668		—		—		18,553
	Corporate and other debt:
		State and municipal securities			—		3		—		—		3
		Asset-backed securities			—		449		—		—		449
		Corporate bonds			—		5,578		6		—		5,584
		Other debt			—		15		3		—		18
			Total corporate and other debt		—		6,045		9		—		6,054
	Corporate equities(2)				46,440		76		26		—		46,542
	Obligation to return securities received as collateral				18,731		7		—		—		18,738
	Derivative and other contracts:
		Interest rate contracts			969		436,022		775		—		437,766
		Credit contracts			—		16,403		1,418		—		17,821
		Foreign exchange contracts			82		78,441		102		—		78,625
		Equity contracts			1,262		43,177		2,110		—		46,549
		Commodity contracts			2,368		7,652		2,759		—		12,779
		Other			—		91		11		—		102
		Netting(3)			(4,184)		(505,871)		(2,537)		(43,727)		(556,319)
			Total derivative and other contracts		497		75,915		4,638		(43,727)		37,323
		Total trading liabilities			94,894		84,822		4,673		(43,727)		140,662
Securities sold under agreements to repurchase					—		549		150		—		699
Other secured financings					—		2,480		441		—		2,921
Long-term borrowings					44		35,831		1,929		—		37,804
Total liabilities measured at fair value				$	94,938	$	124,258	$	7,223	$	(43,727)	$	182,692

					Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at December 31, 2015
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. government and agency securities:
		U.S. Treasury securities		$	17,658	$	—	$	—	$	—	$	17,658
		U.S. agency securities			797		17,886		—		—		18,683
			Total U.S. government and agency securities		18,455		17,886		—		—		36,341
	Other sovereign government obligations				13,559		7,400		4		—		20,963
	Corporate and other debt:
		State and municipal securities			—		1,651		19		—		1,670
		Residential mortgage-backed securities			—		1,456		341		—		1,797
		Commercial mortgage-backed securities			—		1,520		72		—		1,592
		Asset-backed securities			—		494		25		—		519
		Corporate bonds			—		9,959		267		—		10,226
		Collateralized debt and loan obligations			—		284		430		—		714
		Loans and lending commitments(1)			—		4,682		5,936		—		10,618
		Other debt			—		2,263		448		—		2,711
			Total corporate and other debt		—		22,309		7,538		—		29,847
	Corporate equities(2)				106,296		379		433		—		107,108
	Securities received as collateral				11,221		3		1		—		11,225
	Derivative and other contracts:
		Interest rate contracts			406		323,586		2,052		—		326,044
		Credit contracts			—		22,258		661		—		22,919
		Foreign exchange contracts			55		64,608		292		—		64,955
		Equity contracts			653		38,552		1,084		—		40,289
		Commodity contracts			3,140		10,654		3,358		—		17,152
		Other			—		219		—		—		219
		Netting(3)			(3,840)		(380,443)		(3,120)		(55,562)		(442,965)
			Total derivative and other contracts		414		79,434		4,327		(55,562)		28,613
	Investments(4):
		Principal investments			20		44		486		—		550
		Other			163		310		221		—		694
			Total investments		183		354		707		—		1,244
	Physical commodities				—		321		—		—		321
		Total trading assets(4)			150,128		128,086		13,010		(55,562)		235,662
AFS securities					34,351		32,408		—		—		66,759
Securities purchased under agreements to resell					—		806		—		—		806
Intangible assets					—		—		5		—		5
Total assets measured at fair value				$	184,479	$	161,300	$	13,015	$	(55,562)	$	303,232
Liabilities at Fair Value
Deposits				$	—	$	106	$	19	$	—	$	125
Short-term borrowings					—		1,647		1		—		1,648
Trading liabilities:
	U.S. government and agency securities:
		U.S. Treasury securities			12,932		—		—		—		12,932
		U.S. agency securities			854		127		—		—		981
			Total U.S. government and agency securities		13,786		127		—		—		13,913
	Other sovereign government obligations				10,970		2,558		—		—		13,528
	Corporate and other debt:
		Commercial mortgage-backed securities			—		2		—		—		2
		Corporate bonds			—		5,035		—		—		5,035
		Lending commitments			—		3		—		—		3
		Other debt			—		5		4		—		9
			Total corporate and other debt		—		5,045		4		—		5,049
	Corporate equities(2)				47,123		35		17		—		47,175
	Obligation to return securities received as collateral				19,312		3		1		—		19,316
	Derivative and other contracts:
		Interest rate contracts			466		305,151		1,792		—		307,409
		Credit contracts			—		22,160		1,505		—		23,665
		Foreign exchange contracts			22		65,177		151		—		65,350
		Equity contracts			570		42,447		3,115		—		46,132
		Commodity contracts			3,012		9,431		2,308		—		14,751
		Other			—		43		—		—		43
		Netting(3)			(3,840)		(380,443)		(3,120)		(40,473)		(427,876)
			Total derivative and other contracts		230		63,966		5,751		(40,473)		29,474
		Total trading liabilities			91,421		71,734		5,773		(40,473)		128,455
Securities sold under agreements to repurchase					—		532		151		—		683
Other secured financings					—		2,393		461		—		2,854
Long-term borrowings					—		31,058		1,987		—		33,045
Total liabilities measured at fair value				$	91,421	$	107,470	$	8,392	$	(40,473)	$	166,810

_____________

AFS—Available for sale

(1)At June 30,2016, Loans and lending commitments held at fair value consisted of $7,114million of corporate loans, $1,721million of residential real estate loans and $462million of wholesale real estate loans. At December 31, 2015, Loans and lending commitments held at fair value consisted of $7,286 million of corporate loans, $1,885 million of residential real estate loans and $1,447 million of wholesale real estate loans.

(2)For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes.

(3) For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Counterparty and Cash Collateral Netting.” For contracts with the same counterparty, counterparty netting among positions classified within the same level is included within that shared level. For further information on derivative instruments and hedging activities, see Note 4.

(4)Amounts exclude certain investments that are measured at fair value using the net asset value (“NAV”) per share, which are not classified in the fair value hierarchy. At June 30,2016and December 31, 2015, the fair value of these investments was $3,246 million and $3,843 million, respectively. For additional disclosure about such investments, see “Fair Value of Investments Measured at Net Asset Value” herein.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for all periods presented. Level 3 instruments may be hedged with instruments classified in Level 1 and Level 2. As a result, the realized and unrealized gains (losses) for assets and liabilities within the Level 3 category presented in the following tables do not reflect the related realized and unrealized gains (losses) on hedging instruments that have been classified by the Firm within the Level 1 and/or Level 2 categories.

Additionally, both observable and unobservable inputs may be used to determine the fair value of positions that the Firm has classified within the Level 3 category. As a result, the unrealized gains (losses) during the period for assets and liabilities within the Level 3 category presented in the following tables herein may include changes in fair value during the period that were attributable to both observable and unobservable inputs.

Roll-forward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis
					Beginning Balance at March 31, 2016		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2016		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2016
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	8	$	—	$	—	$	(18)	$	—	$	—	$	30	$	20	$	—
	Other sovereign government obligations				8		—		—		(3)		—		—		(3)		2		—
	Corporate and other debt:
		State and municipal securities			5		1		4		—		—		—		—		10		2
		Residential mortgage-backed securities			292		3		—		(82)		—		—		3		216		(5)
		Commercial mortgage-backed securities			59		(3)		1		(4)		—		—		(2)		51		(5)
		Asset-backed securities			4		(4)		6		(1)		—		—		83		88		(4)
		Corporate bonds			224		17		116		(35)		—		—		(46)		276		17
		Collateralized debt and loan obligations			348		18		3		(178)		—		—		(82)		109		18
		Loans and lending commitments			6,185		(46)		360		(484)		—		(596)		(1)		5,418		(55)
		Other debt			527		4		13		(19)		—		—		3		528		2
			Total corporate and other debt		7,644		(10)		503		(803)		—		(596)		(42)		6,696		(30)
	Corporate equities				430		(63)		273		(82)		—		—		14		572		(63)
	Net derivative and other contracts(2):
		Interest rate contracts			169		(159)		2		—		(7)		42		(282)		(235)		(157)
		Credit contracts			(723)		65		1		—		—		93		(550)		(1,114)		53
		Foreign exchange contracts			126		(58)		—		—		—		(94)		25		(1)		(47)
		Equity contracts			(1,832)		168		50		—		(140)		263		18		(1,473)		(106)
		Commodity contracts			1,200		211		5		—		(4)		(88)		(26)		1,298		130
		Other			—		—		—		—		—		—		(11)		(11)		—
			Total net derivative and other
			contracts		(1,060)		227		58		—		(151)		216		(826)		(1,536)		(127)
	Investments:
		Principal investments			743		4		33		(11)		—		—		—		769		6
		Other			179		1		25		—		—		—		—		205		1
			Total investments		922		5		58		(11)		—		—		—		974		7
Intangible assets					4		—		—		—		—		—		(4)		—		—
Liabilities at Fair Value
Deposits				$	23	$	(1)	$	—	$	—	$	8	$	—	$	(2)	$	30	$	(1)
Trading liabilities:
	Corporate and other debt:
		Corporate bonds			6		(1)		(5)		29		—		—		(25)		6		(1)
		Lending commitments			1		1		—		—		—		—		—		—		—
		Other debt			4		—		(1)		—		—		—		—		3		—
			Total corporate and other debt		11		—		(6)		29		—		—		(25)		9		(1)
	Corporate equities				31		(28)		(33)		5		—		—		(5)		26		—
	Obligation to return securities received
		as collateral			1		—		(1)		—		—		—		—		—		—
Securities sold under agreements to repurchase					151		1		—		—		—		—		—		150		1
Other secured financings					454		(14)		—		—		23		(22)		(28)		441		(14)
Long-term borrowings					1,798		21		—		—		164		(131)		119		1,929		26

					Beginning Balance at December 31, 2015		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2016		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2016
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	—	$	1	$	—	$	(19)	$	—	$	—	$	38	$	20	$	1
	Other sovereign government obligations				4		—		—		(5)		—		—		3		2		1
	Corporate and other debt:
		State and municipal securities			19		1		4		(15)		—		—		1		10		1
		Residential mortgage-backed securities			341		(19)		19		(133)		—		—		8		216		(14)
		Commercial mortgage-backed securities			72		(10)		—		(19)		—		—		8		51		(11)
		Asset-backed securities			25		(7)		7		(18)		—		—		81		88		(8)
		Corporate bonds			267		62		113		(128)		—		—		(38)		276		61
		Collateralized debt and loan obligations			430		5		22		(224)		—		—		(124)		109		17
		Loans and lending commitments			5,936		(111)		970		(720)		—		(672)		15		5,418		(121)
		Other debt			448		(2)		133		(63)		—		—		12		528		(2)
			Total corporate and other debt		7,538		(81)		1,268		(1,320)		—		(672)		(37)		6,696		(77)
	Corporate equities				433		(45)		296		(119)		—		—		7		572		(64)
	Securities received as collateral				1		—		—		(1)		—		—		—		—		—
	Net derivative and other contracts(2):
		Interest rate contracts			260		305		3		—		(21)		(60)		(722)		(235)		205
		Credit contracts			(844)		(343)		1		—		—		153		(81)		(1,114)		(360)
		Foreign exchange contracts			141		(109)		—		—		—		(201)		168		(1)		(82)
		Equity contracts			(2,031)		(321)		71		—		(184)		1,121		(129)		(1,473)		(434)
		Commodity contracts			1,050		297		7		—		(4)		(176)		124		1,298		210
		Other			—		—		—		—		—		—		(11)		(11)		—
			Total net derivative and other
			contracts		(1,424)		(171)		82		—		(209)		837		(651)		(1,536)		(461)
	Investments:
		Principal investments			486		(39)		403		(40)		—		(41)		—		769		(37)
		Other			221		(17)		1		—		—		—		—		205		(16)
			Total investments		707		(56)		404		(40)		—		(41)		—		974		(53)
Intangible assets					5		—		—		—		—		—		(5)		—		—
Liabilities at Fair Value
Deposits				$	19	$	(2)	$	—	$	—	$	13	$	—	$	(4)	$	30	$	(2)
Short-term borrowings					1		—		—		—		—		(1)		—		—		—
Trading liabilities:
	Corporate and other debt:
		Corporate bonds			—		(5)		(7)		10		—		—		(2)		6		(5)
		Other debt			4		2		(3)		4		—		—		—		3		2
			Total corporate and other debt		4		(3)		(10)		14		—		—		(2)		9		(3)
	Corporate equities				17		(3)		(22)		18		—		—		10		26		(3)
	Obligation to return securities received
		as collateral			1		—		(1)		—		—		—		—		—		—
Securities sold under agreements to repurchase					151		1		—		—		—		—		—		150		1
Other secured financings					461		(32)		—		—		69		(43)		(78)		441		(32)
Long-term borrowings					1,987		(12)		—		—		276		(167)		(179)		1,929		(6)

					Beginning Balance at March 31, 2015		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2015		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2015
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	—	$	—	$	—	$	(3)	$	—	$	—	$	6	$	3	$	—
	Other sovereign government obligations				11		—		5		(1)		—		—		(3)		12		—
	Corporate and other debt:
		State and municipal securities			—		1		4		(9)		—		—		11		7		1
		Residential mortgage-backed securities			296		2		138		(32)		—		—		(26)		378		2
		Commercial mortgage-backed securities			180		(4)		5		(9)		—		—		(88)		84		(5)
		Asset-backed securities			67		5		11		(64)		—		—		—		19		1
		Corporate bonds			424		(4)		228		(150)		—		(2)		(17)		479		(16)
		Collateralized debt and loan obligations			822		68		300		(439)		—		(78)		(13)		660		(10)
		Loans and lending commitments			4,789		31		1,615		(351)		—		(491)		(81)		5,512		26
		Other debt			486		(1)		130		(51)		—		—		—		564		(1)
			Total corporate and other debt		7,064		98		2,431		(1,105)		—		(571)		(214)		7,703		(2)
	Corporate equities				230		38		266		(92)		—		—		44		486		26
	Securities received as collateral				33		—		—		(30)		—		—		—		3		—
	Net derivative and other contracts(2):
		Interest rate contracts			(496)		95		4		—		(13)		14		160		(236)		135
		Credit contracts			(984)		(24)		4		—		(24)		23		16		(989)		(29)
		Foreign exchange contracts			297		57		—		—		(1)		43		50		446		82
		Equity contracts			(2,472)		(23)		39		—		(54)		206		202		(2,102)		(161)
		Commodity contracts			1,345		4		2		—		(112)		(34)		—		1,205		(27)
			Total net derivative and other contracts		(2,310)		109		49		—		(204)		252		428		(1,676)		—
	Investments:
		Principal investments			829		(21)		5		(12)		—		(205)		(15)		581		(21)
		Other			391		(4)		—		—		—		—		(87)		300		—
			Total investments		1,220		(25)		5		(12)		—		(205)		(102)		881		(21)
Intangible assets					5		1		—		—		—		—		—		6		1
Liabilities at Fair Value
Trading liabilities:
	Corporate and other debt:
		Corporate bonds		$	23	$	—	$	(21)	$	15	$	—	$	—	$	(2)	$	15	$	—
		Other debt			23		—		—		10		—		(29)		—		4		—
	Total corporate and other debt				46		—		(21)		25		—		(29)		(2)		19		—
	Corporate equities				50		240		(49)		2		—		—		349		112		240
	Obligation to return securities received
		as collateral			33		—		(30)		—		—		—		—		3		—
Securities sold under agreements to repurchase					154		—		—		—		—		—		—		154		—
Other secured financings					133		2		—		—		37		—		—		168		2
Long-term borrowings					1,738		51		—		—		549		(88)		73		2,221		51

					Beginning Balance at December 31, 2014		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2015		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2015
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	—	$	—	$	3	$	—	$	—	$	—	$	—	$	3	$	—
	Other sovereign government obligations				41		1		6		(32)		—		—		(4)		12		1
	Corporate and other debt:
		State and municipal securities			—		1		4		—		—		—		2		7		1
		Residential mortgage-backed securities			175		21		163		(51)		—		—		70		378		12
		Commercial mortgage-backed securities			96		(6)		16		(22)		—		—		—		84		(9)
		Asset-backed securities			76		(4)		11		(29)		—		—		(35)		19		2
		Corporate bonds			386		10		213		(126)		—		(1)		(3)		479		9
		Collateralized debt and loan obligations			1,152		145		404		(682)		—		(331)		(28)		660		(6)
		Loans and lending commitments			5,874		35		2,082		(209)		—		(2,078)		(192)		5,512		30
		Other debt			285		(8)		12		—		—		(1)		276		564		6
			Total corporate and other debt		8,044		194		2,905		(1,119)		—		(2,411)		90		7,703		45
	Corporate equities				272		64		260		(147)		—		—		37		486		49
	Securities received as collateral				—		—		3		—		—		—		—		3		—
	Net derivative and other contracts(2):
		Interest rate contracts			(173)		188		9		—		(20)		124		(364)		(236)		197
		Credit contracts			(743)		(276)		17		—		(54)		31		36		(989)		(284)
		Foreign exchange contracts			151		121		—		—		(1)		144		31		446		120
		Equity contracts			(2,165)		(73)		69		—		(225)		156		136		(2,102)		(160)
		Commodity contracts			1,146		299		3		—		(112)		(72)		(59)		1,205		234
			Total net derivative and other contracts		(1,784)		259		98		—		(412)		383		(220)		(1,676)		107
	Investments:
		Principal investments			835		(4)		15		(46)		—		(205)		(14)		581		(26)
		Other			323		(16)		2		(6)		—		—		(3)		300		(12)
			Total investments		1,158		(20)		17		(52)		—		(205)		(17)		881		(38)
Intangible assets					6		1		—		—		—		(1)		—		6		1
Liabilities at Fair Value
Trading liabilities:
	Corporate and other debt:
		Corporate bonds		$	78	$	(2)	$	(12)	$	14	$	—	$	—	$	(67)	$	15	$	(2)
		Lending commitments			5		5		—		—		—		—		—		—		5
		Other debt			38		—		—		6		—		(39)		(1)		4		—
	Total corporate and other debt				121		3		(12)		20		—		(39)		(68)		19		3
	Corporate equities				45		19		(75)		25		—		—		136		112		20
	Obligation to return securities received
		as collateral			—		—		—		3		—		—		—		3		—
Securities sold under agreements to repurchase					153		(1)		—		—		—		—		—		154		(1)
Other secured financings					149		(6)		—		—		37		(24)		—		168		2
Long-term borrowings					1,934		65		—		—		612		(300)		40		2,221		59

___________

(1) Loan originations and consolidations of VIEs are included in purchases.

(2) Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. For further information on derivative instruments and hedging activities, see Note 4.

Significant Unobservable Inputs Used in Recurring Level 3 Fair Value Measurements

The following disclosures provide information on the valuation techniques, significant unobservable inputs, and their ranges and averages for each major category of assets and liabilities measured at fair value on a recurring basis with a significant Level 3 balance. The level of aggregation and breadth of products cause the range of inputs to be wide and not evenly distributed across the inventory. Further, the range of unobservable inputs may differ across firms in the financial services industry because of diversity in the types of products included in each firm’s inventory. The following disclosures also include qualitative information on the sensitivity of the fair value measurements to changes in the significant unobservable inputs.

Recurring Level 3 Fair Value Measurements Valuation Techniques and Sensitivity of Unobservable Inputs
					Balance at June 30, 2016	Valuation Technique(s) /Significant Unobservable Input(s) /Sensitivity of the Fair Value to Changes in the Unobservable Inputs			Range(1)	Averages(2)
					(dollars in millions)
Assets at Fair Value
Trading assets:
	Corporate and other debt:
		Residential mortgage-backed
			securities	$	216	Comparable pricing:
							Comparable bond price / (A)		0 to 79 points	20 points
		Commercial mortgage-backed
			securities		51	Comparable pricing:
							Comparable bond price / (A)		0 to 7 points	1 point
		Asset-backed securities			88	Comparable pricing:
							Comparable bond price / (A)		45 to 55 points	46 points
		Corporate bonds			276	Comparable pricing(3):
							Comparable bond price / (A)		3 to 135 points	91 points
						Comparable pricing:
							EBITDA multiple / (A)		5 to 10 times	7 times
		Collateralized debt and loan
			obligations		109	Comparable pricing(3):
							Comparable bond price / (A)		20 to 95 points	57 points
						Correlation model:
							Credit correlation / (B)		29% to 61%	42%
		Loans and lending commitments			5,418	Corporate loan model:
							Credit spread / (C)		482 to 898 bps	596 bps
						Margin loan model(3):
							Credit spread / (C)(D)		31 to 102 bps	86 bps
							Volatility skew / (C)(D)		20% to 46%	32%
							Discount rate / (C)(D)		1% to 8%	3%
						Expected recovery:
							Asset coverage / (A)		47% to 99%	90%
						Option model:
							Volatility skew / (C)		-1%	-1%
						Comparable pricing:
							Comparable loan price / (A)		43 to 100 points	87 points
						Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		5% to 6%	6%
							Capitalization rate / (C)(D)		4% to 10%	4%
		Other debt			528	Comparable pricing:
							Comparable loan price / (A)		3 to 84 points	66 points
						Comparable pricing:
							Comparable bond price / (A)		7 points	7 points
						Option model:
							At the money volatility / (C)		16% to 53%	53%
						Margin loan model(3):
							Discount rate / (C)		1% to 2%	2%
						Discounted cash flow:
							Discount rate / (C)		10% to 13%	12%
	Corporate equities				572	Comparable pricing:
							Comparable equity price / (A)		100%	100%
	Net derivative and other contracts(4):
		Interest rate contracts			(235)	Option model(3):
							Interest rate - Foreign exchange
								correlation / (A)(D)	25% to 55%	42% / 42% (5)
							Interest rate volatility skew / (A)(D)		34% to 143%	78% / 77% (5)
							Interest rate quanto correlation / (A)(D)		-8% to 35%	2% / -7% (5)
							Interest rate curve correlation / (C)(D)		19% to 95%	71% / 76% (5)
							Interest rate curve / (C)(D)		0% to 1%	1% / 1% (5)
							Inflation volatility / (A)(D)		0% to 1%	1% / 1% (5)
							Interest rate - Inflation correlation / (A)(D)		-24% to -44%	-34% / -33% (5)
							Foreign exchange volatility skew / (C)(D)		0% to 11%	4% / 6% (5)
						Comparable pricing:
							Comparable bond price / (C)		95 to 100 points	96 points
		Credit contracts			(1,114)	Comparable pricing:
							Cash synthetic basis / (C)(D)		5 to 12 points	10 points
							Comparable bond price / (C)(D)		0 to 85 points	26 points
						Correlation model(3):
							Credit correlation / (B)		29% to 92%	49%
		Foreign exchange contracts(6)			(1)	Option model:
							Interest rate - Foreign exchange correlation /
								(A)(D)	25% to 55%	42% / 42% (5)
							Interest rate volatility skew / (A)(D)		34% to 143%	78% / 77% (5)
							Interest rate curve / (A)(D)		0%	0% / 0% (5)
							Interest rate curve correlation / (C)(D)		19% to 94%	73% / 81% (5)
		Equity contracts(6)			(1,473)	Option model:
							At the money volatility / (A)(D)		6% to 81%	35%
							Volatility skew / (A)(D)		-4% to 0%	-1%
							Equity - Equity correlation / (A)(D)		40% to 98%	79%
							Equity - Foreign exchange correlation / (C)(D)		-70% to -31%	-42%
							Equity - Interest rate correlation / (C)(D)		-7% to 50%	19% / 12% (5)
		Commodity contracts			1,298	Option model:
							Forward power price / (C)(D)		$2 to $95 per	$34 per
									megawatt hour	megawatt hour
							Commodity volatility / (C)(D)		6% to 90%	18%
							Cross commodity correlation / (C)(D)		5% to 99%	93%
	Investments:
		Principal investments			769	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		13% to 16%	15%
							Exit multiple / (A)(D)		8 to 23 times	9 times
						Market approach(3):
							EBITDA multiple / (A)(D)		6 to 25 times	12 times
							Forward capacity price / (A)(D)		$4 to $9	$7
						Comparable pricing:
							Comparable equity price / (A)		43% to 100%	82%
		Other			205	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		9%	9%
							Exit multiple / (A)(D)		13 times	13 times
						Market approach:
							EBITDA multiple / (A)(D)		6 to 13 times	12 times
						Comparable pricing(3):
							Comparable equity price / (A)		100%	100%
Liabilities at Fair Value
Securities sold under agreements
	to repurchase				150	Discounted cash flow:
							Funding spread / (A)		117 to 123 bps	120 bps
Other secured financings					441	Option model:
							Volatility skew / (C)		-1%	-1%
						Discounted cash flow(3):
							Discount rate / (C)		4%	4%
						Discounted cash flow:
							Funding spread / (A)		101 to 126 bps	114 bps
Long-term borrowings					1,929	Option model(3):
							At the money volatility / (C)(D)		6% to 48%	29%
							Volatility skew / (C)(D)		-2% to 0%	-1%
							Equity - Equity correlation / (C)(D)		50% to 98%	75%
							Equity - Foreign exchange correlation / (C)(D)		-50% to 11%	-25%
						Option model:
							Interest rate - credit spread correlation / (A)(D)		-52% to 3%	-24% / -23% (5)
							Interest rate - Foreign exchange correlation /
								(A)(D)	53%	53% / 53% (5)
							Interest rate - equity correlation / (A)(D)		7% to 44%	26% / 26% (5)
							Interest rate curve correlation / (C)(D)		40% to 87%	73% / 78% (5)
						Correlation model:
							Credit correlation / (B)		33% to 61%	44%
						Comparable pricing:
							Comparable equity price / (A)		100%	100%

						Valuation Technique(s) /
						Significant Unobservable Input(s) /
					Balance at	Sensitivity of the Fair Value to Changes
					December 31, 2015	in the Unobservable Inputs			Range(1)	Averages(2)
					(dollars in millions)
Assets at Fair Value
Trading assets:
	Corporate and other debt:
		Residential mortgage-backed
			securities	$	341	Comparable pricing:
							Comparable bond price / (A)		0 to 75 points	32 points
		Commercial mortgage-backed
			securities		72	Comparable pricing:
							Comparable bond price / (A)		0 to 9 points	2 points
		Corporate bonds			267	Comparable pricing(3):
							Comparable bond price / (A)		3 to 119 points	90 points
						Comparable pricing:
							EBITDA multiple / (A)		7 to 9 times	8 times
						Structured bond model:
							Discount rate / (C)		15%	15%
		Collateralized debt and loan
			obligations		430	Comparable pricing(3):
							Comparable bond price / (A)		47 to 103 points	67 points
						Correlation model:
							Credit correlation / (B)		39% to 60%	49%
		Loans and lending commitments			5,936	Corporate loan model:
							Credit spread / (C)		250 to 866 bps	531 bps
						Margin loan model(3):
							Credit spread / (C)(D)		62 to 499 bps	145 bps
							Volatility skew / (C)(D)		14% to 70%	33%
							Discount rate / (C)(D)		1% to 4%	2%
						Option model:
							Volatility skew / (C)		-1%	-1%
						Comparable pricing:
							Comparable loan price / (A)		35 to 100 points	88 points
						Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		6% to 8%	7%
							Capitalization rate / (C)(D)		4% to 10%	4%
		Other debt			448	Comparable pricing:
							Comparable loan price / (A)		4 to 84 points	59 points
						Comparable pricing:
							Comparable bond price / (A)		8 points	8 points
						Option model:
							At the money volatility / (C)		16% to 53%	53%
						Margin loan model(3):
							Discount rate / (C)		1%	1%
	Corporate equities				433	Comparable pricing:
							Comparable price / (A)		50% to 80%	72%
						Comparable pricing(3):
							Comparable equity price / (A)		100%	100%
						Market approach:
							EBITDA multiple / (A)		9 times	9 times
	Net derivative and other contracts(4):
		Interest rate contracts			260	Option model:
							Interest rate volatility concentration
								liquidity multiple / (C)(D)	0 to 3 times	2 times
							Interest rate - Foreign exchange
								correlation / (C)(D)	25% to 62%	43% / 43%(5)
							Interest rate volatility skew / (A)(D)		29% to 82%	43% / 40%(5)
							Interest rate quanto correlation / (A)(D)		-8% to 36%	5% / -6%(5)
							Interest rate curve correlation / (C)(D)		24% to 95%	60% / 69%(5)
							Inflation volatility / (A)(D)		58%	58% / 58%(5)
							Interest rate - Inflation correlation / (A)(D)		-41% to -39%	-41% / -41%(5)
		Credit contracts			(844)	Comparable pricing:
							Cash synthetic basis / (C)(D)		5 to 12 points	9 points
							Comparable bond price / (C)(D)		0 to 75 points	24 points
						Correlation model(3):
							Credit correlation / (B)		39% to 97%	57%
		Foreign exchange contracts(6)			141	Option model:
							Interest rate - Foreign exchange correlation
								/ (C)(D)	25% to 62%	43% / 43%(5)
						Interest rate volatility skew / (A)(D)			29% to 82%	43% / 40 %(5)
							Interest rate curve / (A)(D)		0%	0% / 0%(5)
		Equity contracts(6)			(2,031)	Option model:
							At the money volatility / (A)(D)		16% to 65%	32%
							Volatility skew / (A)(D)		-3% to 0%	-1%
							Equity - Equity correlation / (C)(D)		40% to 99%	71%
							Equity - Foreign exchange correlation / (A)(D)		-60% to -11%	-39%
							Equity - Interest rate correlation / (C)(D)		-29% to 50%	16% / 8%(5)
		Commodity contracts			1,050	Option model:
							Forward power price / (C)(D)		$3 to $91 per	$32 per
									megawatt hour	megawatt hour
							Commodity volatility / (A)(D)		10% to 92%	18%
							Cross commodity correlation / (C)(D)		43% to 99%	93%
	Investments:
		Principal investments			486	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		16%	16%
							Exit multiple / (A)(D)		8 to 14 times	9 times
							Capitalization rate / (C)(D)		5% to 9%	6%
							Equity discount rate / (C)(D)		20% to 35%	26%
						Market approach(3):
							EBITDA multiple / (A)(D)		8 to 20 times	11 times
							Forward capacity price / (A)(D)		$5 to $9	$7
						Comparable pricing:
							Comparable equity price / (A)		43% to 100%	81%
		Other			221	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		10%	10%
							Exit multiple / (A)(D)		13 times	13 times
						Market approach:
							EBITDA multiple / (A)		7 to 14 times	12 times
						Comparable pricing(3):
							Comparable equity price / (A)		100%	100%
Liabilities at Fair Value
Securities sold under agreements
	to repurchase			$	151	Discounted cash flow:
							Funding spread / (A)		86 to 116 bps	105 bps
Other secured financings					461	Option model:
							Volatility skew / (C)		-1%	-1%
						Discounted cash flow(3):
							Discount rate / (C)		4% to 13%	4%
						Discounted cash flow:
							Funding spread / (A)		95 to 113 bps	104 bps
Long-term borrowings					1,987	Option model(3):
							At the money volatility / (C)(D)		20% to 50%	29%
							Volatility skew / (A)(D)		-1% to 0%	-1%
							Equity - Equity correlation / (A)(D)		40% to 97%	77%
							Equity - Foreign exchange correlation / (C)(D)		-70% to -11%	-39%
						Option model:
							Interest rate volatility skew / (A)(D)		50%	50%
							Equity volatility discount / (A)(D)		10%	10%
						Correlation model:
							Credit correlation / (B)		40% to 60%	52%
						Comparable pricing:
							Comparable equity price / (A)		100%	100%

________________

bps—Basis points

EBITDA—Earnings before interest, taxes, depreciation and amortization

(1) The range of significant unobservable inputs is represented in points, percentages, basis points, times or megawatt hours. Points are a percentage of par; for example, 79 points would be 79% of par. A basis point equals 1/100th of 1%; for example, 898 bps would equal 8.98%. 

(2) Amounts represent weighted averages except where simple averages and the median of the inputs are provided (see footnote 5 below). Weighted averages are calculated by weighting each input by the fair value of the respective financial instruments except for collateralized debt and loan obligations, principal investments, other debt, corporate bonds, long-term borrowings and derivative instruments where some or all inputs are weighted by risk.

(3) This is the predominant valuation technique for this major asset or liability class.

(4) Credit valuation adjustments (“CVA”) and funding valuation adjustments (“FVA”)are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Input(s) in the previous table. CVA is a Level 3 input when the underlying counterparty credit curve is unobservable. FVA is a Level 3 input in its entirety given the lack of observability of funding spreads in the principal market.

(5) The data structure of the significant unobservable inputs used in valuing interest rate contracts, foreign exchange contracts, certain equity contracts and certain long-term borrowings may be in a multi-dimensional form, such as a curve or surface, with risk distributed across the structure. Therefore, a simple average and median, together with the range of data inputs, may be more appropriate measurements than a single point weighted average.

(6) Includes derivative contracts with multiple risks (i.e., hybrid products).

Sensitivity of the fair value to changes in the unobservable inputs:

(A) Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement.

(B) Significant changes in credit correlation may result in a significantly higher or lower fair value measurement. Increasing (decreasing) correlation drives a redistribution of risk within the capital structure such that junior tranches become less (more) risky and senior tranches become more (less) risky.

(C) Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement.

(D) There are no predictable relationships between the significant unobservable inputs.

For a description of the Firm’s significant unobservable inputs for all major categories of assets and liabilities, see Note 3 to the consolidated financial statements in the 2015 Form 10-K. The following provides a description of an update to significant unobservable inputs included in the 2015 Form 10-K.

• Asset Coverage—the ratio of a borrower’s underlying pledged assets less applicable costs relative to their outstanding debt (while considering the loan’s principal and the seniority and security of the loan commitment).

During the current quarter and current year period, there were no other significant updates made to the Firm’s significant unobservable inputs.

Fair Value of Investments Measured at Net Asset Value

For a description of the Firm’s investments in private equity funds, real estate funds and hedge funds measured at fair value based on NAV, see Note 3 to the consolidated financial statements in the 2015 Form 10-K.

Investments in Certain Funds Measured at NAV per Share
		At June 30, 2016				At December 31, 2015
		Fair Value		Commitment		Fair Value		Commitment
	(dollars in millions)
Private equity funds	$	1,698	$	395	$	1,917	$	538
Real estate funds		1,228		111		1,337		128
Hedge funds		320		4		589		4
Total	$	3,246	$	510	$	3,843	$	670

Fair Value of Non-Redeemable Funds by Projected Distribution
			At June 30, 2016
			Private Equity		Real Estate
			Funds		Funds
			(dollars in millions)
	Less than 5 years	$	128	$	94
	5-10 years		911		669
	Over 10 years		659		465
	Total	$	1,698	$	1,228

Restrictions

Investments in hedge funds may be subject to initial period lock-up restrictions or gates. A hedge fund lock-up provision restricts an investor from making a withdrawal from the fund. The purpose of a gate is to restrict the level of redemptions that an investor in a particular hedge fund can demand on any redemption date.

Redemption Frequency as Percentage of Hedge Fund Fair Value
	At June 30, 2016
Hedge Funds(1)
Quarterly	55%
Every Six Months	20%
Greater than Six Months	19%
_________(1) The redemption notice period was primarily three months or greater.

Hedge fund investments representing approximately 6% of the fair value cannot be redeemed currently because the investments include certain initial period lock-up restrictions. The remaining restriction period for these investments was primarily over three years at June 30,2016. Hedge fund investments representing approximately 26% of the fair value cannot be redeemed as of June 30, 2016 because an exit restriction has been imposed by the hedge fund manager primarily for indefinite periods.

Fair Value Option

The Firm elected the fair value option for certain eligible instruments that are risk managed on a fair value basis to mitigate income statement volatility caused by measurement basis differences between the elected instruments and their associated risk management transactions or to eliminate complexities of applying certain accounting models.

Impact on Earnings of Transactions Under the Fair Value Option Election

In addition to the amounts in the following table, as discussed in Note 2 to the consolidated financial statements in the 2015 Form 10-K, instruments within Trading assets or Trading liabilities are measured at fair value. The amounts in this table are included within Net revenues and do not reflect gains or losses on related hedging instruments, if any.

				Interest		Gains (Losses)
		Trading		Income		Included in
		Revenues		(Expense)		Net Revenues
		(dollars in millions)
Three Months Ended June 30, 2016
Securities purchased under agreements to resell	$	(1)	$	2	$	1
Deposits(1)		(1)		(1)		(2)
Short-term borrowings(1)		(9)		─		(9)
Securities sold under agreements to repurchase(1)		(3)		(3)		(6)
Long-term borrowings(1)		(1,289)		(130)		(1,419)
Six Months Ended June 30, 2016
Securities purchased under agreements to resell	$	(1)	$	4	$	3
Deposits(1)		(3)		(1)		(4)
Short-term borrowings(1)		36		─		36
Securities sold under agreements to repurchase(1)		(12)		(5)		(17)
Long-term borrowings(1)		(2,254)		(269)		(2,523)
Three Months Ended June 30, 2015
Securities purchased under agreements to resell	$	(2)	$	5	$	3
Short-term borrowings(2)		(2)		─		(2)
Securities sold under agreements to repurchase(2)		6		(2)		4
Long-term borrowings(2)		152		(138)		14
Six Months Ended June 30, 2015
Securities purchased under agreements to resell	$	(3)	$	5	$	2
Short-term borrowings(2)		(42)		─		(42)
Securities sold under agreements to repurchase(2)		4		(3)		1
Long-term borrowings(2)		1,089		(270)		819

• Gains (losses) are mainly attributable to changes in foreign currency rates or interest rates or movements in the reference price or index for short-term and long-term borrowings before the impact of related hedges. In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains of $225 million and $548 million are recorded within OCI in the consolidated statements of comprehensive income and not included in this table for the current quarter and current year period, respectively. See Notes 2 and 14 for further information.
• Gains (losses) recorded in Trading revenues for the prior year quarter and prior year period are attributable to DVA and the respective remainder is attributable to changes in foreign currency rates or interest rates or movements in the reference price or index for structured notes before the impact of related hedges.

Gains (Losses) due to Changes in Instrument-Specific Credit Risk
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2016				2015				2016				2015
		Trading Revenues		OCI		Trading Revenues		OCI		Trading Revenues		OCI		Trading Revenues		OCI
		(dollars in millions)
Short-term and long-term borrowings(1)	$	─	$	226	$	182	$	─	$	41	$	545	$	307	$	─
Securities sold under agreements to repurchase(1)		─		(1)		─		─		─		3		─		─
Loans and other debt(2)		(14)		─		(6)		─		(114)		─		71		─
Lending commitments(3)		2		─		(1)		─		3		─		8		─

_____________

(1)In accordance with the early adoption of a provision of the accounting update, Recognition and Measurement of Financial Assets and Financial Liabilities, for the current quarter and current yearperiod DVA gains (losses) are recorded in OCI when unrealized and in Trading revenues when realized. In the prior year quarter and prior year period, the realized and unrealized DVA gains (losses) are recorded in Trading revenues. The cumulative impact of changes in the Firm’s DVA and the pre-tax amount recognized in AOCI is a gain of $87 million at June 30,2016. See Notes 2 and 14 for further information.

(2) Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses, such as those due to changes in interest rates.

(3) Gains (losses) on lending commitments were generally determined based on the differential between estimated expected client yields and contractual yields at each respective period-end.

Net Difference of Contractual Principal Amount Over Fair Value
		At		At
		June 30,		December 31,
		2016		2015
		(dollars in millions)
Loans and other debt(1)	$	15,046	$	14,095
Loans 90 or more days past due
and/or on nonaccrual status(1)		12,867		11,651
Short-term and long-term
borrowings(2)		311		508

_____________

(1) The majority of the difference between principal and fair value amounts for loans and other debt emanates from the distressed debt trading business, which purchases distressed debt at amounts well below par.

(2) Short-term and long-term borrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in the reference price or index.

Short-Term and Long-Term Borrowings Measured at Fair Value on a Recurring Basis
			At		At
			June 30,		December 31,
			2016		2015
Business Unit Responsible			(dollars in millions)
for Risk Management
Equity		$	19,696	$	17,789
Interest rates			16,728		14,255
Credit and foreign exchange			1,570		2,266
Commodities			321		383
	Total	$	38,315	$	34,693

Fair Value of Loans in Nonaccrual Status
		At		At
		June 30,		December 31,
		2016		2015
		(dollars in millions)
Aggregate fair value of loans in
nonaccrual status(1)	$	1,717	$	1,853

_____________

(1) Includes all loans 90 or more days past due in the amount of $514 million and $885 million at June 30, 2016 and December 31, 2015, respectively.

The previous tables exclude non-recourse debt from consolidated VIEs, liabilities related to failed sales of financial assets, pledged commodities and other liabilities that have specified assets attributable to them.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Certain assets and liabilities were measured at fair value on a non-recurring basis and are not included in the previous tables.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
						Fair Value by Level
												Total		Total
												Gains (Losses)		Gains (Losses)
				Carrying								for the		for
				Value at								Three Months Ended		Six Months Ended
				June 30,								June 30,		June 30,
				2016(1)		Level 1		Level 2		Level 3		2016(2)		2016(2)
				(dollars in millions)
Assets:
	Loans(3)		$	6,700	$	─	$	4,276	$	2,424	$	(34)	$	(131)
	Other assets—Other investments(4)			82		─		─		82		(38)		(40)
	Other assets—Premises, equipment
		and software costs(5)		─		─		─		─		(22)		(27)
Total assets			$	6,782	$	─	$	4,276	$	2,506	$	(94)	$	(198)
Liabilities:
	Other liabilities and accrued
		expenses(3)	$	402	$	─	$	331	$	71	$	13	$	24
Total liabilities			$	402	$	─	$	331	$	71	$	13	$	24

					Fair Value by Level
											Total		Total
											Gains (Losses)		Gains (Losses)
			Carrying								for the		for the
			Value at								Three Months Ended		Six Months Ended
			June 30,								June 30,		June 30,
			2015(1)		Level 1		Level 2		Level 3		2015(2)		2015(2)
			(dollars in millions)
Assets:
	Loans(3)	$	3,244	$	─	$	2,458	$	786	$	47	$	8
	Other assets—Other investments(4)		─		─		─		─		─		(2)
	Other assets—Premises, equipment
	and software costs(5)	software costs(5)	─		─		─		─		(2)		(22)
Total assets		$	3,244	$	─	$	2,458	$	786	$	45	$	(16)
Liabilities:
	Other liabilities and accrued
	expenses(3)	$	283	$	─	$	244	$	39	$	(45)		(48)
Total liabilities		$	283	$	─	$	244	$	39	$	(45)		(48)

___________________

(1) Carrying values relate only to those assets that had fair value adjustments during the current quarter and prior year quarter.

(2) Changes in the fair value of Loans and losses related to Other assets—Other investments are recorded within Other revenues in the consolidated statements of income. Losses related to Other assets—Premises, equipment and software costs are recorded within Other expenses if not held for sale and within Other revenues if held for sale. Changes in the fair value of lending commitments reported in Other liabilities and accrued expenses that are designated as held for sale are recorded within Other revenues, whereas, changes in the fair value related to held for investment lending commitments are recorded within Other expenses.

(3)Non-recurring changes in the fair value of loans and lending commitments held for investment were calculated using the value of the underlying collateral. Loans and lending commitments held for sale were calculated using recently executed transactions; market price quotations; valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and credit default swap spread levels adjusted for any basis difference between cash and derivative instruments; or default recovery analysis where such transactions and quotations are unobservable.

(4) Losses related to Other assets—Other investments were determined primarily using discounted cash flow models and methodologies that incorporate multiples of certain comparable companies.

(5) Losses related to Other assets—Premises, equipment and software costs were determined primarily using a default recovery analysis.

Included in the losses within the previous table for the current quarter and current year period, there was a loss of approximately $35 million (related to Other assets—Other investments) in connection with the sale of solar investments and impairments of the remainingunsold solar investments accounted for under the equity method. The fair value of these investments was determined based on the sales price.

Financial Instruments Not Measured at Fair Value

For a further discussion of financial instruments not measured at fair value, see Note 3 to the consolidated financial statements in the 2015 Form 10-K. The carrying values of the remaining assets and liabilities not measured at fair value in the following tables approximate fair value due to their short-term nature. The following tables exclude certain financial instruments such as equity method investments and all non-financial assets and liabilities such as the value of the long-term relationships with the Firm’s deposit customers.

			At June 30, 2016				Fair Value by Level
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
			(dollars in millions)
Financial Assets:
Cash and due from banks		$	27,597	$	27,597	$	27,597	$	—	$	—
Interest bearing deposits with banks			28,536		28,536		28,536		—		—
Investment securities—HTM securities			12,418		12,567		3,758		8,809		—
Securities purchased under agreements to resell			97,034		97,042		—		95,140		1,902
Securities borrowed			131,281		131,282		—		131,156		126
Customer and other receivables(1)			48,910		48,815		—		44,033		4,782
Loans(2)			93,165		94,151		—		25,289		68,862
Other assets—Cash deposited with clearing organizations or
	segregated under federal and other regulations or requirements		32,771		32,771		32,771		—		—
Financial Liabilities:
Deposits		$	152,598	$	152,788	$	—	$	152,788	$	—
Short-term borrowings			369		369		—		369		—
Securities sold under agreements to repurchase			49,629		49,692		—		48,033		1,659
Securities loaned			17,241		17,262		—		17,262		—
Other secured financings			6,980		6,991		—		5,596		1,395
Customer and other payables(1)			197,978		197,978		—		197,978		—
Long-term borrowings			125,688		127,189		—		127,189		—

			At December 31, 2015				Fair Value by Level
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
			(dollars in millions)
Financial Assets:
Cash and due from banks		$	19,827	$	19,827	$	19,827	$	—	$	—
Interest bearing deposits with banks			34,256		34,256		34,256		—		—
Investment securities—HTM securities			5,224		5,188		998		4,190		—
Securities purchased under agreements to resell			86,851		86,837		—		86,186		651
Securities borrowed			142,416		142,414		—		142,266		148
Customer and other receivables(1)			41,676		41,576		—		36,752		4,824
Loans(2)			85,759		86,423		—		19,241		67,182
Other assets—Cash deposited with clearing organizations or
	segregated under federal and other regulations or requirements		31,469		31,469		31,469		—		—
Financial Liabilities:
Deposits		$	155,909	$	156,163	$	—	$	156,163	$	—
Short-term borrowings			525		525		—		525		—
Securities sold under agreements to repurchase			36,009		36,060		—		34,150		1,910
Securities loaned			19,358		19,382		—		19,192		190
Other secured financings			6,610		6,610		—		5,333		1,277
Customer and other payables(1)			183,895		183,895		—		183,895		—
Long-term borrowings			120,723		123,219		—		123,219		—

___________________

HTM—Held to maturity

(1) Accrued interest, fees, and dividend receivables and payables where carrying value approximates fair value have been excluded.

(2) Amounts include all loans measured at fair value on a non-recurring basis.

AtJune 30,2016 and December 31,2015, notional amounts of approximately $93.8 billion and $99.5 billion, respectively, of the Firm’s lending commitments were held for investment and held for sale, which are not included in the previous table. The estimated fair value of such lending commitments was a liability of $1,841 million and $2,172 million, respectively, atJune 30,2016 and December 31,2015. Had these commitments been accounted for at fair value, $1,610 million would have been categorized in Level 2 and $231million in Level 3 atJune 30,2016, and $1,791 million would have been categorized in Level 2 and $381 million in Level 3 atDecember 31,2015.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

4.    Derivative Instruments and Hedging Activities

For a discussion of the Firm’s derivative instruments and hedging activities, see Note 4 to the consolidated financial statements in the 2015 Form 10-K.

Fair Value, Notional and Offsetting of Derivative Assets and Liabilities
				Derivative Assets at June 30, 2016
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	3,325	$	3,798	$	—	$	7,123	$	34,003	$	58,245	$	—	$	92,248
	Foreign exchange contracts			88		—		—		88		2,795		59		—		2,854
		Total derivatives designated as
		accounting hedges		3,413		3,798		—		7,211		36,798		58,304		—		95,102
Derivatives not designated as accounting
hedges(1):
	Interest rate contracts			287,757		168,366		328		456,451		3,940,102		6,615,199		1,636,768		12,192,069
	Credit contracts			13,734		2,727		—		16,461		434,478		133,037		—		567,515
	Foreign exchange contracts			75,891		386		140		76,417		1,851,368		16,653		21,279		1,889,300
	Equity contracts			22,043		—		20,486		42,529		341,039		—		259,453		600,492
	Commodity contracts			11,785		—		3,724		15,509		72,700		—		83,156		155,856
	Other			16		—		—		16		1,135		—		—		1,135
		Total derivatives not designated
		as accounting hedges		411,226		171,479		24,678		607,383		6,640,822		6,764,889		2,000,656		15,406,367
Total gross derivatives(2)			$	414,639	$	175,277	$	24,678	$	614,594	$	6,677,620	$	6,823,193	$	2,000,656	$	15,501,469
Amounts offset:
	Counterparty netting			(321,553)		(173,222)		(21,214)		(515,989)
	Cash collateral netting			(60,352)		(95)		—		(60,447)
		Total derivative assets at fair value
		included in Trading assets	$	32,734	$	1,960	$	3,464	$	38,158
Amounts not offset(3):
	Financial instruments collateral			(12,011)		—		—		(12,011)
	Other cash collateral			(23)		—		—		(23)
		Net exposure	$	20,700	$	1,960	$	3,464	$	26,124

				Derivative Liabilities at June 30, 2016
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	—	$	—	$	—	$	—	$	—	$	32	$	—	$	32
	Foreign exchange contracts		$	492	$	23	$	—	$	515	$	8,348	$	689	$	—	$	9,037
		Total derivatives designated as										.
		accounting hedges		492		23		—		515		8,348		721		—		9,069
Derivatives not designated as accounting
hedges(1):
	Interest rate contracts			265,270		172,084		412		437,766		3,654,941		6,558,339		760,822		10,974,102
	Credit contracts			14,888		2,933		—		17,821		489,656		115,979		—		605,635
	Foreign exchange contracts			77,614		414		82		78,110		1,837,572		15,817		10,511		1,863,900
	Equity contracts			25,633		—		20,916		46,549		342,625		—		261,986		604,611
	Commodity contracts			9,390		—		3,389		12,779		68,095		—		64,896		132,991
	Other			102		—		—		102		4,817		—		—		4,817
		Total derivatives not designated
		as accounting hedges		392,897		175,431		24,799		593,127		6,397,706		6,690,135		1,098,215		14,186,056
Total gross derivatives(2)			$	393,389	$	175,454	$	24,799	$	593,642	$	6,406,054	$	6,690,856	$	1,098,215	$	14,195,125
Amounts offset:
	Counterparty netting			(321,553)		(173,222)		(21,214)		(515,989)
	Cash collateral netting			(38,378)		(1,952)		—		(40,330)
		Total derivative liabilities at fair value
		included in Trading liabilities	$	33,458	$	280	$	3,585	$	37,323
Amounts not offset(3):
	Financial instruments collateral			(11,509)		—		(514)		(12,023)
	Other cash collateral			(10)		(41)		—		(51)
		Net exposure	$	21,939	$	239	$	3,071	$	25,249

				Derivative Assets at December 31, 2015
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	2,825	$	1,442	$	—	$	4,267	$	36,999	$	35,362	$	—	$	72,361
	Foreign exchange contracts			166		1		—		167		5,996		167		—		6,163
		Total derivatives designated as
		accounting hedges		2,991		1,443		—		4,434		42,995		35,529		—		78,524
Derivatives not designated as accounting
hedges(4):
	Interest rate contracts			220,289		101,276		212		321,777		4,348,002		5,748,525		1,218,645		11,315,172
	Credit contracts			19,310		3,609		—		22,919		585,731		139,301		—		725,032
	Foreign exchange contracts			64,438		295		55		64,788		1,907,290		13,402		7,715		1,928,407
	Equity contracts			20,212		—		20,077		40,289		316,770		—		229,859		546,629
	Commodity contracts			13,114		—		4,038		17,152		67,449		—		82,313		149,762
	Other			219		—		—		219		5,684		—		—		5,684
		Total derivatives not designated
		as accounting hedges		337,582		105,180		24,382		467,144		7,230,926		5,901,228		1,538,532		14,670,686
Total gross derivatives(2)			$	340,573	$	106,623	$	24,382	$	471,578	$	7,273,921	$	5,936,757	$	1,538,532	$	14,749,210
Amounts offset:
	Counterparty netting			(265,707)		(104,294)		(21,592)		(391,593)
	Cash collateral netting			(50,335)		(1,037)		—		(51,372)
		Total derivative assets at fair value
		included in Trading assets	$	24,531	$	1,292	$	2,790	$	28,613
Amounts not offset(3):
	Financial instruments collateral			(9,190)		—		—		(9,190)
	Other cash collateral			(9)		—		—		(9)
		Net exposure	$	15,332	$	1,292	$	2,790	$	19,414

				Derivative Liabilities at December 31, 2015
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	20	$	250	$	—	$	270	$	3,560	$	9,869	$	—	$	13,429
	Foreign exchange contracts			56		6		—		62		4,604		455		—		5,059
		Total derivatives designated as
		accounting hedges		76		256		—		332		8,164		10,324		—		18,488
Derivatives not designated as accounting
hedges(4):
	Interest rate contracts			203,004		103,852		283		307,139		4,030,039		5,682,322		1,077,710		10,790,071
	Credit contracts			19,942		3,723		—		23,665		562,027		131,388		—		693,415
	Foreign exchange contracts			65,034		232		22		65,288		1,868,015		13,322		2,655		1,883,992
	Equity contracts			25,708		—		20,424		46,132		332,734		—		229,266		562,000
	Commodity contracts			10,864		—		3,887		14,751		59,169		—		62,974		122,143
	Other			43		—		—		43		4,114		—		—		4,114
		Total derivatives not designated
		as accounting hedges		324,595		107,807		24,616		457,018		6,856,098		5,827,032		1,372,605		14,055,735
Total gross derivatives(2)			$	324,671	$	108,063	$	24,616	$	457,350	$	6,864,262	$	5,837,356	$	1,372,605	$	14,074,223
Amounts offset:
	Counterparty netting			(265,707)		(104,294)		(21,592)		(391,593)
	Cash collateral netting			(33,332)		(2,951)		—		(36,283)
		Total derivative liabilities at fair value
		included in Trading liabilities	$	25,632	$	818	$	3,024	$	29,474
Amounts not offset(3):
	Financial instruments collateral			(5,384)		—		(405)		(5,789)
	Other cash collateral			(5)		—		—		(5)
		Net exposure	$	20,243	$	818	$	2,619	$	23,680

_____________

OTC—Over-the-counter

(1) Notional amounts include gross notionals related to open long and short futures contracts of $1,300.0 billion and $372.8 billion, respectively. The unsettled fair value on these futures contracts (excluded from this table) of $1,631 million and $153 million is included in Customer and other receivables and Customer and other payables, respectively, in the consolidated balance sheets.

(2) Amounts include transactions which are either not subject to master netting agreements or collateral agreements or are subject to such agreements but the Firm has not determined the agreements to be legally enforceable as follows: $4.8 billion of derivative assets and $6.3 billion of derivative liabilities at June 30,2016, and $4.2 billion of derivative assets and $5.2 billion of derivative liabilities at December 31,2015.

(3)Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

(4) Notional amounts include gross notionals related to open long and short futures contracts of $1,009.5 billion and $653.0 billion, respectively. The unsettled fair value on these futures contracts (excluded from this table) of $1,145 million and $437 million is included in Customer and other receivables and Customer and other payables, respectively, in the consolidated balance sheets.

For information related to offsetting of certain collateralized transactions, see Note 6.

Gains (Losses) on Fair Value Hedges
		Gains (Losses) Recognized in Interest Expense
		Three Months Ended June 30,				Six Months Ended June 30,
Product Type		2016		2015		2016		2015
		(dollars in millions)
Derivatives	$	969	$	(1,899)	$	3,119	$	(1,141)
Borrowings		(993)		1,861		(3,282)		1,018
Total	$	(24)	$	(38)	$	(163)	$	(123)

Gains (Losses) on Derivatives Designated as Net Investment Hedges
		Gains (Losses) Recognized in OCI (effective portion)
		Three Months EndedJune 30,				Six Months Ended June 30,
Product Type		2016		2015		2016		2015
		(dollars in millions)
Foreign exchange
contracts(1)	$	(112)	$	(81)	$	(336)	$	181

____________

(1) Losses of $19 million and $39 million related to the forward points on the hedging instruments were excluded from hedge effectiveness testing and recognized in Interest income during the current quarter and current year period, respectively. Losses of $36 million and $80 million related to the forward points on the hedging instruments were excluded from hedge effectiveness testing and recognized in Interest income during the prior year quarter and prior year period, respectively.

Gains (Losses) on Trading Instruments

The following table summarizes gains and losses included in Trading revenues in the consolidated statements of income from trading activities. These activities include revenues related to derivative and non-derivative financial instruments. The Firm generally utilizes financial instruments across a variety of product types in connection with their market-making and related risk management strategies. Accordingly, the trading revenues presented in the following table are not representative of the manner in which the Firm manages its business activities and are prepared in a manner similar to the presentation of trading revenues for regulatory reporting purposes.

			Gains (Losses) Recognized in Trading Revenues
			Three Months Ended				Six Months Ended
			June 30,				June 30,
Product Type			2016		2015		2016		2015
			(dollars in millions)
Interest rate contracts		$	320	$	355	$	626	$	925
Foreign exchange contracts			362		170		599		515
Equity security and index contracts(1)			1,615		1,746		2,945		3,341
Commodity and other contracts(2)			20		140		(124)		816
Credit contracts			429		380		765		719
	Subtotal	$	2,746	$	2,791	$	4,811	$	6,316
Debt valuation adjustments(3)			—		182		—		307
	Total trading revenue	$	2,746	$	2,973	$	4,811	$	6,623

____________

(1) Dividend income is included within equity security and index contracts.

(2) Other contracts represent contracts not reported as interest rate, foreign exchange, equity security and index or credit contracts.

(3)In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains (losses) in the current quarter and current yearperiod are recorded within OCI in the consolidated statements of comprehensive income. In the prior year quarter and prior year period, the DVA gains (losses) were recorded within Trading revenues in the consolidated statements of income. See Notes 2 and 14 for further information.

OTC Derivative Products—Trading Assets
Counterparty Credit Rating and Remaining Maturity of OTC Derivative Assets
			Fair Value at June 30, 2016(1)
			Contractual Years to Maturity								Cross-Maturityand Cash Collateral Netting(3)		Net Exposure Post-cash Collateral		Net Exposure Post-collateral(4)
Credit Rating(2)			Less than 1		1 - 3		3 - 5		Over 5
			(dollars in millions)
AAA		$	137	$	396	$	1,312	$	4,360	$	(4,953)	$	1,252	$	1,175
AA			3,156		1,502		1,814		12,226		(12,717)		5,981		3,771
A			11,078		7,607		5,336		28,058		(38,694)		13,385		7,784
BBB			5,794		4,489		2,622		15,861		(19,993)		8,773		6,808
Non-investment grade			3,923		2,505		996		5,370		(7,514)		5,280		3,122
	Total	$	24,088	$	16,499	$	12,080	$	65,875	$	(83,871)	$	34,671	$	22,660

			Fair Value at December 31, 2015(1)
			Contractual Years to Maturity								Cross-Maturity and Cash Collateral Netting(3)		Net Exposure Post-cash Collateral		Net Exposure Post-collateral(4)
Credit Rating(2)			Less than 1		1-3		3-5		Over 5
			(dollars in millions)
AAA		$	203	$	453	$	827	$	3,665	$	(4,319)	$	829	$	715
AA			2,689		2,000		1,876		9,223		(10,981)		4,807		2,361
A			9,748		8,191		4,774		20,918		(34,916)		8,715		5,448
BBB			3,614		4,863		1,948		11,801		(15,086)		7,140		4,934
Non-investment grade			3,982		2,333		1,157		3,567		(6,716)		4,323		3,166
	Total	$	20,236	$	17,840	$	10,582	$	49,174	$	(72,018)	$	25,814	$	16,624

_____________

(1) Fair values shown represent the Firm’s net exposure to counterparties related to its OTC derivative products.

(2) Obligor credit ratings are determined by the Credit Risk Management Department.

(3) Amounts represent the netting of receivable balances with payable balances for the same counterparty across maturity categories. Receivable and payable balances with the same counterparty in the same maturity category are netted within such maturity category, where appropriate. Cash collateral received is netted on a counterparty basis, provided legal right of offset exists.

(4)Fair value is shown, net of collateral received (primarily cash and U.S. government and agency securities).

Credit Risk-Related Contingencies

In connection with certain OTC trading agreements, the Firm may be required to provide additional collateral or immediately settle any outstanding liability balances with certain counterparties in the event of a credit rating downgrade of the Firm.

Net Derivative Liabilities and Collateral Posted

The following table presents the aggregate fair value of certain derivative contracts that contain credit risk-related contingent features that are in a net liability position for which the Firm has posted collateral in the normal course of business.

		At June 30, 2016
		(dollars in millions)
Net derivative liabilities	$	28,999
Collateral posted		24,217

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services (“S&P”).The following table shows the future potential collateral amounts and termination payments that could be called or required by counterparties or exchange and clearing organizations in the event of one-notch or two-notch downgrade scenarios based on the relevant contractual downgrade triggers.

Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade
		At June 30, 2016(1)
		(dollars in millions)
One-notch downgrade	$	1,075
Two-notch downgrade		1,233

________

(1) Amounts include $1,481 million related to bilateral arrangements between the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firmto manage the risk of counterparty downgrades.

Credit Derivatives and Other Credit Contracts

The Firm enters into credit derivatives, principally through credit default swaps, under which it receives or provides protection against the risk of default on a set of debt obligations issued by a specified reference entity or entities. A majority of the Firm’s counterparties are banks, broker-dealers and insurance and other financial institutions.

Notional and Fair Value of Protection Sold and Protection Purchased through Credit Default Swaps
		At June 30, 2016
		Protection Sold				Protection Purchased
		Notional		Fair Value (Asset)/Liability		Notional		Fair Value (Asset)/Liability
		(dollars in millions)
Single name credit default swaps	$	347,624	$	463	$	338,727	$	(453)
Index and basket credit default swaps		176,009		726		143,734		(771)
Tranched index and basket credit default swaps		43,657		(793)		123,399		2,188
Total	$	567,290	$	396	$	605,860	$	964

		At December 31, 2015
		Protection Sold				Protection Purchased
		Notional		Fair Value (Asset)/Liability		Notional		Fair Value (Asset)/Liability
		(dollars in millions)
Single name credit default swaps	$	420,806	$	1,980	$	405,361	$	(2,079)
Index and basket credit default swaps		199,688		(102)		173,936		(82)
Tranched index and basket credit default swaps		69,025		(1,093)		149,631		2,122
Total	$	689,519	$	785	$	728,928	$	(39)

Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold

				At June 30, 2016
				Maximum Potential Payout/Notional										Fair Value(Asset)/Liability(1)
				Years to Maturity
				Less than 1		1-3		3-5		Over 5		Total
				(dollars in millions)
Single name credit default swaps(2):
	Investment grade		$	92,734	$	94,348	$	48,928	$	11,097	$	247,107	$	(1,079)
	Non-investment grade			42,370		38,348		18,381		1,418		100,517		1,542
		Total	$	135,104	$	132,696	$	67,309	$	12,515	$	347,624	$	463
Index and basket credit default swaps(2):
	Investment grade		$	24,110	$	39,948	$	42,887	$	4,060	$	111,005	$	(1,222)
	Non-investment grade			51,914		28,315		13,761		14,671		108,661		1,155
		Total	$	76,024	$	68,263	$	56,648	$	18,731	$	219,666	$	(67)
Total credit default swaps sold			$	211,128	$	200,959	$	123,957	$	31,246	$	567,290	$	396
Other credit contracts				43		25		—		276		344		(17)
Total credit derivatives and other credit
	contracts		$	211,171	$	200,984	$	123,957	$	31,522	$	567,634	$	379

				At December 31, 2015
				Maximum Potential Payout/Notional										Fair Value(Asset)/Liability(1)
				Years to Maturity
				Less than 1		1-3		3-5		Over 5		Total
				(dollars in millions)
Single name credit default swaps(2):
	Investment grade		$	84,543	$	138,467	$	63,754	$	12,906	$	299,670	$	(1,831)
	Non-investment grade			38,054		56,261		24,432		2,389		121,136		3,811
		Total	$	122,597	$	194,728	$	88,186	$	15,295	$	420,806	$	1,980
Index and basket credit default swaps(2):
	Investment grade		$	33,507	$	59,403	$	45,505	$	5,327	$	143,742	$	(1,977)
	Non-investment grade			52,590		43,899		15,480		13,002		124,971		782
		Total	$	86,097	$	103,302	$	60,985	$	18,329	$	268,713	$	(1,195)
Total credit default swaps sold			$	208,694	$	298,030	$	149,171	$	33,624	$	689,519	$	785
Other credit contracts				19		107		2		332		460		(24)
Total credit derivatives and other credit
	contracts		$	208,713	$	298,137	$	149,173	$	33,956	$	689,979	$	761

_____________

(1) Fair value amounts are shown on a gross basis prior to cash collateral or counterparty netting.

(2) In order to provide an indication of the current payment status or performance risk of the CDS, a breakdown of CDS based on the Firm’s internal credit ratings by investment grade and non-investment grade is provided.Internal credit ratings serve as the Credit Risk Management Department’s assessment of credit risk, and the basis for a comprehensive credit limits framework used to control credit risk. The Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor. Internal ratings procedures, methodologies, and models are all independently and formally governed, and models and methodologies are reviewed by a separate model risk management oversight function.

Purchased Credit Protection with Identical Underlying Reference Obligations

For single name and non-tranched index and basket credit default swaps, the Firm has purchased protection with a notional amount of approximately $480.1billion and $577.7 billion at June 30,2016and December 31, 2015, respectively, compared with a notional amount of approximately $521.9 billion and $619.5 billion (included in the previous tables) at June 30,2016and December 31, 2015, respectively, of credit protection sold with identical underlying reference obligations.

For further information on credit derivatives and other credit contracts, see Note 4 to the consolidated financial statements in the 2015 Form 10-K.

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Investment Securities

6 Months Ended

Jun. 30, 2016

Investment securities

Investment Securities

5. Investment Securities

The following tables present information about the Firm’s AFS securities, which are carried at fair value, and HTM securities, which are carried at amortized cost. The net unrealized gains or losses on AFS securities are reported on an after-tax basis as a component of AOCI.

AFS and HTM Securities
						At June 30, 2016
						Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
					(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities			$	29,923	$	213	$	8	$	30,128
		U.S. agency securities(1)				23,221		208		22		23,407
				Total U.S. government and agency securities		53,144		421		30		53,535
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency			2,139		5		31		2,113
			Non-agency			2,159		36		10		2,185
		Auto loan asset-backed securities				2,071		7		—		2,078
		Corporate bonds				4,009		66		2		4,073
		Collateralized loan obligations				502		—		7		495
		FFELP student loan asset-backed securities(2)				3,345		—		105		3,240
				Total corporate and other debt		14,225		114		155		14,184
Total AFS debt securities						67,369		535		185		67,719
AFS equity securities						15		—		8		7
Total AFS securities						67,384		535		193		67,726
HTM securities:
	U.S. government securities:
		U.S. Treasury securities				3,705		53		—		3,758
		U.S. agency securities(1)				8,713		96		—		8,809
Total HTM securities						12,418		149		—		12,567
Total Investment securities					$	79,802	$	684	$	193	$	80,293

						At December 31, 2015
						Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
					(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities			$	31,555	$	5	$	143	$	31,417
		U.S. agency securities(1)				21,103		29		156		20,976
				Total U.S. government and agency securities		52,658		34		299		52,393
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency			1,906		1		60		1,847
			Non-agency			2,220		3		25		2,198
		Auto loan asset-backed securities				2,556		—		9		2,547
		Corporate bonds				3,780		5		30		3,755
		Collateralized loan obligations				502		—		7		495
		FFELP student loan asset-backed securities(2)				3,632		—		115		3,517
				Total corporate and other debt		14,596		9		246		14,359
Total AFS debt securities						67,254		43		545		66,752
AFS equity securities						15		—		8		7
Total AFS securities						67,269		43		553		66,759
HTM securities:
	U.S. government securities:
		U.S. Treasury securities				1,001		—		3		998
		U.S. agency securities(1)				4,223		1		34		4,190
Total HTM securities						5,224		1		37		5,188
Total Investment securities					$	72,493	$	44	$	590	$	71,947

______________

• U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and collateralized mortgage obligations.
• FFELP—Federal Family Education Loan Program. Amounts are backed by a guarantee from the U.S. Department of Education of at least 95% of the principal balance and interest on such loans.

Investment Securities in an Unrealized Loss Position

					At June 30, 2016
					Less than 12 Months				12 Months or Longer				Total
					Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
				(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities		$	3,028	$	8	$	—	$	—	$	3,028	$	8
		U.S. agency securities			5,731		10		1,225		12		6,956		22
			Total U.S. government and agency securities		8,759		18		1,225		12		9,984		30
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency		31		—		1,181		31		1,212		31
			Non-agency		216		—		625		10		841		10
		Auto loan asset-backed securities			83		—		204		—		287		—
		Corporate bonds			172		1		175		1		347		2
		Collateralized loan obligations			—		—		494		7		494		7
		FFELP student loan asset-backed securities			583		12		2,637		93		3,220		105
			Total corporate and other debt		1,085		13		5,316		142		6,401		155
Total AFS debt securities					9,844		31		6,541		154		16,385		185
AFS equity securities					7		8		—		—		7		8
Total AFS securities					9,851		39		6,541		154		16,392		193
HTM securities:
	U.S. government and agency securities:
		U.S. agency securities			72		—		—		—		72		—
Total HTM securities					72		—		—		—		72		—
Total Investment securities				$	9,923	$	39	$	6,541	$	154	$	16,464	$	193

					At December 31, 2015
					Less than 12 Months				12 Months or Longer				Total
					Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
				(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities		$	25,994	$	126	$	2,177	$	17	$	28,171	$	143
		U.S. agency securities			14,242		135		639		21		14,881		156
			Total U.S. government and agency securities		40,236		261		2,816		38		43,052		299
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency		1,185		44		422		16		1,607		60
			Non-agency		1,479		21		305		4		1,784		25
		Auto loan asset-backed securities			1,644		7		881		2		2,525		9
		Corporate bonds			2,149		19		525		11		2,674		30
		Collateralized loan obligations			352		5		143		2		495		7
		FFELP student loan asset-backed securities			2,558		79		929		36		3,487		115
			Total corporate and other debt		9,367		175		3,205		71		12,572		246
Total AFS debt securities					49,603		436		6,021		109		55,624		545
AFS equity securities					7		8		—		—		7		8
Total AFS securities					49,610		444		6,021		109		55,631		553
HTM securities:
	U.S. government and agency securities:
		U.S. Treasury securities			898		3		—		—		898		3
		U.S. agency securities			3,677		34		—		—		3,677		34
Total HTM securities					4,575		37		—		—		4,575		37
Total Investment securities				$	54,185	$	481	$	6,021	$	109	$	60,206	$	590

As discussed in Note 2 to the consolidated financial statements in the 2015 Form 10-K, AFS and HTM securities with a current fair value less than their amortized cost are analyzed as part of the Firm’s ongoing assessment of temporary versus other-than-temporarily impaired at the individual security level.

The Firm believes there are no securities in an unrealized loss position that are other-than-temporarily-impaired at June 30, 2016 and December 31, 2015 for the reasons discussed herein.

For AFS debt securities, the Firm does not intend to sell the securities and is not likely to be required to sell the securities prior to recovery of amortized cost basis. For AFS and HTM debt securities, the securities have not experienced credit losses as the net unrealized losses reported in the previous table are primarily due to higher interest rates since those securities were purchased. Additionally, the Firm does not expect to experience a credit loss based on consideration of the relevant information (as discussed in Note 2 to the consolidated financial statements in the 2015 Form 10-K), including for U.S. government and agency securities, the existence of an explicit and implicit guarantee provided by the U.S. government. The risk of credit loss on securities in an unrealized loss position is considered minimal because all of the Firm’s agency securities as well as asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”) and collateralized loan obligations (“CLOs”) are highly rated and because corporate bonds are all investment grade.

For AFS equity securities, the Firm has the intent and ability to hold these securities for a period of time sufficient to allow for any anticipated recovery in market value.

See Note 12 for additional information on securities issued by VIEs, including U.S. agency mortgage-backed securities, non-agency CMBS, auto loan ABS, CLO and FFELP student loan ABS.

Amortized Cost, Fair Value and Annualized Average Yield of Investment Securities by Contractual Maturity Dates
						At June 30, 2016
						Amortized Cost		Fair Value	Annualized Average Yield
					(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities:
				Due within 1 year	$	2,698	$	2,702	0.7%
				After 1 year through 5 years		22,137		22,317	1.0%
				After 5 years through 10 years		5,088		5,109	1.4%
				Total		29,923		30,128
		U.S. agency securities:
				Due within 1 year		200		200	0.7%
				After 1 year through 5 years		2,629		2,632	0.5%
				After 5 years through 10 years		1,327		1,357	1.9%
				After 10 years		19,065		19,218	1.6%
				Total		23,221		23,407
				Total U.S. government and agency securities		53,144		53,535	1.2%
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency:
				Due within 1 year		73		74	0.8%
				After 1 year through 5 years		404		406	1.0%
				After 5 years through 10 years		639		641	1.3%
				After 10 years		1,023		992	1.6%
				Total		2,139		2,113
			Non-agency:
				After 10 years		2,159		2,185	1.9%
				Total		2,159		2,185
		Auto loan asset-backed securities:
				Due within 1 year		4		4	0.9%
				After 1 year through 5 years		1,902		1,909	1.3%
				After 5 years through 10 years		165		165	1.6%
				Total		2,071		2,078
		Corporate bonds:
				Due within 1 year		638		640	1.3%
				After 1 year through 5 years		2,655		2,695	1.8%
				After 5 years through 10 years		716		738	2.6%
				Total		4,009		4,073
		Collateralized loan obligations:
				After 5 years through 10 years		502		495	1.5%
				Total		502		495
		FFELP student loan asset-backed securities:
				After 1 year through 5 years		59		59	0.6%
				After 5 years through 10 years		922		897	0.9%
				After 10 years		2,364		2,284	0.9%
				Total		3,345		3,240
				Total corporate and other debt		14,225		14,184	1.5%
				Total AFS debt securities		67,369		67,719	1.3%
AFS equity securities						15		7	― %
Total AFS securities						67,384		67,726	1.3%
HTM securities:
	U.S. government securities:
		U.S. Treasury securities:
				Due within 1 year		200		201	0.7%
				After 1 year through 5 years		1,408		1,422	1.1%
				After 5 years through 10 years		1,693		1,719	1.7%
				After 10 years		404		416	2.5%
				Total		3,705		3,758
		U.S. agency securities:
				After 10 years		8,713		8,809	2.0%
				Total		8,713		8,809
Total HTM securities						12,418		12,567	1.8%
Total Investment securities					$	79,802	$	80,293	1.4%

Gross Realized Gains and Gross Realized (Losses) on Sales of AFS Securities
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Gross realized gains		$	71	$	40	$	85	$	69
Gross realized (losses)			(1)		(10)		(3)		(14)
	Total	$	70	$	30	$	82	$	55

Gross realized gains and losses are recognized in Other revenues in the consolidated statements of income.

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Collateralized Transactions

6 Months Ended

Jun. 30, 2016

Collateralized Transactions

Collateralized Transactions

6. Collateralized Transactions

The Firm enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. For further discussion of the Firm’s collateralized transactions, see Note 6 to the consolidated financial statements in the 2015 Form 10-K.

Offsetting of Certain Collateralized Transactions
		At June 30, 2016
		Gross Amounts(1)		Amounts Offset		Net Amounts Presented		Amounts Not Offset(2)		Net Exposure
		(dollars in millions)
Assets
Securities purchased under agreements to resell	$	162,813	$	(65,224)	$	97,589	$	(91,746)	$	5,843
Securities borrowed		138,436		(7,155)		131,281		(124,773)		6,508
Liabilities
Securities sold under agreements to repurchase	$	115,552	$	(65,224)	$	50,328	$	(42,541)	$	7,787
Securities loaned		24,396		(7,155)		17,241		(16,724)		517

		At December 31, 2015
		Gross Amounts(1)		Amounts Offset		Net Amounts Presented		Amounts Not Offset(2)		Net Exposure
		(dollars in millions)
Assets
Securities purchased under agreements to resell	$	135,714	$	(48,057)	$	87,657	$	(84,752)	$	2,905
Securities borrowed		147,445		(5,029)		142,416		(134,250)		8,166
Liabilities
Securities sold under agreements to repurchase	$	84,749	$	(48,057)	$	36,692	$	(31,604)	$	5,088
Securities loaned		24,387		(5,029)		19,358		(18,881)		477

_____________

(1) Amounts include transactions which are either not subject to master netting agreements or are subject to such agreements but the Firm has not determined the agreements to be legally enforceable as follows: $5.5 billion of Securities purchased under agreements to resell, $3.7 billion of Securities borrowed, $7.2 billion of Securities sold under agreements to repurchase and $0.4 billion of Securities loaned at June 30,2016, and $2.6 billion of Securities purchased under agreements to resell, $3.0 billion of Securities borrowed and $4.9 billion of Securities sold under agreements to repurchase at December 31, 2015.

(2)Amounts relate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

For information related to offsetting of derivatives, see Note 4.

Secured Financing Transactions—Maturities and Collateral Pledged
Gross Secured Financing Balances by Remaining Contractual Maturity
				At June 30, 2016
				Overnightand Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
				(dollars in millions)
Securities sold under agreements to repurchase(1)			$	38,732	$	30,586	$	20,309	$	25,925	$	115,552
Securities loaned(1)				13,085		50		1,336		9,925		24,396
	Gross amount of secured financing included in the
		offsetting disclosure	$	51,817	$	30,636	$	21,645	$	35,850	$	139,948
Obligation to return securities received as collateral				18,738		—		—		—		18,738
Total			$	70,555	$	30,636	$	21,645	$	35,850	$	158,686

				At December 31, 2015
				Overnightand Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
				(dollars in millions)
Securities sold under agreements to repurchase(1)			$	20,410	$	25,245	$	13,221	$	25,873	$	84,749
Securities loaned(1)				12,247		478		2,156		9,506		24,387
	Gross amount of secured financing included in the
		offsetting disclosure	$	32,657	$	25,723	$	15,377	$	35,379	$	109,136
Obligation to return securities received as collateral				19,316		—		—		—		19,316
Total			$	51,973	$	25,723	$	15,377	$	35,379	$	128,452

_____________

(1) Amounts are presented on a gross basis, prior to netting in the consolidated balance sheets.

Gross Secured Financing Balances by Class of Collateral Pledged
			At June 30, 2016		At December 31, 2015
			(dollars in millions)
Securities sold under agreements to repurchase(1)
U.S. government and agency securities		$	39,920	$	36,609
State and municipal securities			2,104		173
Other sovereign government obligations			42,329		24,820
Asset-backed securities			745		441
Corporate and other debt			8,638		4,020
Corporate equities			21,515		18,473
Other			301		213
	Total securities sold under agreements to repurchase	$	115,552	$	84,749
Securities loaned(1)
U.S. government and agency securities		$	182	$	—
Other sovereign government obligations			7,454		7,336
Corporate and other debt			123		71
Corporate equities			16,602		16,972
Other			35		8
	Total securities loaned	$	24,396	$	24,387
Gross amount of secured financing included in the offsetting disclosure		$	139,948	$	109,136
Obligation to return securities received as collateral
Corporate and other debt			—		3
Corporate equities			18,737		19,313
Other			1		—
	Total obligation to return securities received as collateral	$	18,738	$	19,316
Total		$	158,686	$	128,452

_____________

(1) Amounts are presented on a gross basis, prior to netting in the consolidated balance sheets.

Trading Assets Pledged

The Firm pledges its trading assets to collateralize repurchase agreements and other secured financings. Pledged financial instruments that can be sold or repledged by the secured party are identified as Trading assets (pledged to various parties) in the consolidated balance sheets. At June 30,2016 and December 31, 2015, the carrying value of Trading assets that have been loaned or pledged to counterparties, where those counterparties do not have the right to sell or repledge the collateral, were $41.1 billion and $35.0 billion, respectively.

Collateral Received

The Firm receives collateral in the form of securities in connection with reverse repurchase agreements, securities borrowed and derivative transactions, customer margin loans and securities-based lending. In many cases, the Firm is permitted to sell or repledge these securities held as collateral and use the securities to secure repurchase agreements, to enter into securities lending and derivative transactions or for delivery to counterparties to cover short positions. The Firm additionally receives securities as collateral in connection with certain securities-for-securities transactions in which it is the lender. In instances where the Firm is permitted to sell or repledge these securities, it reports the fair value of the collateral received and the related obligation to return the collateral included in Trading assets and Trading liabilities, respectively, in its consolidated balance sheets. At June 30,2016 and December 31, 2015, the total fair value of financial instruments received as collateral where the Firm is permitted to sell or repledge the securities was $528.0 billion and $522.6 billion, respectively, and the fair value of the portion that had been sold or repledged was $407.0 billion and $398.1 billion, respectively.

Other

The Firm also engages in margin lending to clients that allows the client to borrow against the value of qualifying securities and is included within Customer and other receivables in the consolidated balance sheets. Under these agreements and transactions, the Firm receives collateral, including U.S. government and agency securities, other sovereign government obligations, corporate and other debt, and corporate equities. Customer receivables generated from margin lending activities are collateralized by customer-owned securities held by the Firm. The Firm monitors required margin levels and established credit terms daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or reduce positions, when necessary. At June 30,2016 and December 31, 2015, the amounts related to margin lending were approximately $23.2 billion and $25.3 billion, respectively.

For a further discussion of the Firm’s margin lending activities, see Note 6 to the consolidated financial statements in the 2015 Form 10-K.

The Firm has additional secured liabilities. For further discussion of other secured financings, seeNote 10.

Cash and Securities Deposited with Clearing Organizations or Segregated
				At June 30, 2016		At December 31, 2015
				(dollars in millions)
Securities(1)			$	23,710	$	14,390
Other assets―Cash deposited with clearing organizations or segregated under
	federal and other regulations or requirements			32,771		31,469
		Total	$	56,481	$	45,859

_____________

• Securities deposited with clearing organizations or segregated under federal and other regulations or requirements are sourced from Securities purchased under agreements to resell and Trading assets in the consolidated balance sheets.

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Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2016

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Financing Receivables and Allowance for Credit Losses

7. Loans and Allowance for Credit Losses

Loans

The Firm’s loans held for investment are recorded at amortized cost, and its loans held for sale are recorded at the lower of cost or fair value in the consolidated balance sheets. For a further description of these loans, refer to Note 7 to the consolidated financial statements in the 2015 Form 10-K. See Note 3 for further information regarding Loans and lending commitments held at fair value.

Loans Held for Investment and Held for Sale
		At June 30, 2016						At December 31, 2015
Loans by Product Type		Loans Held for Investment		Loans Held for Sale		Total Loans(1)(2)		Loans Held for Investment		Loans Held for Sale		Total Loans(1)(2)
		(dollars in millions)
Corporate loans	$	24,186	$	14,448	$	38,634	$	23,554	$	11,924	$	35,478
Consumer loans		23,337		—		23,337		21,528		—		21,528
Residential real estate loans		22,668		84		22,752		20,863		104		20,967
Wholesale real estate loans		7,415		1,350		8,765		6,839		1,172		8,011
Total loans, gross of allowance for loan losses		77,606		15,882		93,488		72,784		13,200		85,984
Allowance for loan losses		(323)		—		(323)		(225)		—		(225)
Total loans, net of allowance for loan losses	$	77,283	$	15,882	$	93,165	$	72,559	$	13,200	$	85,759

______________

• Amounts include loans that are made to non-U.S. borrowers of$8,104 million and $9,789 million at June 30,2016 and December 31, 2015, respectively.
• Loans at fixed interest rates and floating or adjustable interest rates were $10,102million and $83,063million, respectively, at June 30,2016 and $8,471million and $77,288million, respectively, at December 31, 2015.

Credit Quality

For a further discussion about the Firm’s evaluation of credit transactions and monitoring and credit quality indicators, see Note 7 to the consolidated financial statements in the 2015 Form 10-K.

Credit Quality Indicators for Loans Held for Investment, Gross of Allowance for Loan Losses, by Product Type
		At June 30, 2016
		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
		(dollars in millions)
Pass	$	22,183	$	23,337	$	22,627	$	7,191	$	75,338
Special mention		539		—		—		224		763
Substandard		1,308		—		41		—		1,349
Doubtful		156		—		—		—		156
Loss		—		—		—		—		—
Total loans	$	24,186	$	23,337	$	22,668	$	7,415	$	77,606

		At December 31, 2015
		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
		(dollars in millions)
Pass	$	22,040	$	21,528	$	20,828	$	6,839	$	71,235
Special mention		300		—		—		—		300
Substandard		1,202		—		35		—		1,237
Doubtful		12		—		—		—		12
Loss		—		—		—		—		—
Total loans	$	23,554	$	21,528	$	20,863	$	6,839	$	72,784

Allowance for Credit Losses and Impaired Loans

For factors considered by the Firm in determining the allowance for loan losses and impairments, see Notes 2 and 7 to the consolidated financial statements in the 2015 Form 10-K.

Loans by Product Type
		At June 30, 2016						At December 31, 2015
		Corporate		Residential Real Estate		Total		Corporate		Residential Real Estate		Total
	(dollars in millions)
Impaired loans with allowance	$	244	$	—	$	244	$	39	$	—	$	39
Impaired loans without allowance(1)		338		30		368		89		17		106
Impaired loans unpaid principal balance(2)		593		32		625		130		19		149
Past due 90 days loans and on nonaccrual		1		20		21		1		21		22

• At June 30,2016 and December 31, 2015, no allowance was outstanding for these loans as the present value of the expected future cash flows (or, alternatively, the observable market price of the loan or the fair value of the collateral held) equaled or exceeded the carrying value.
• The impaired loans unpaid principal balance differs from the aggregate amount of impaired loan balances with and without allowance due to various factors, including charge-offs and net deferred loan fees or costs.

Loans by Region
		At June 30, 2016								At December 31, 2015
		Americas		EMEA		Asia-Pacific		Total		Americas		EMEA		Asia-Pacific		Total
	(dollars in millions)
Impaired loans	$	589	$	23	$	—	$	612	$	108	$	12	$	25	$	145
Past due 90 days loans and on nonaccrual		21		—		—		21		22		—		—		22
Allowance for loan losses		277		43		3		323		183		34		8		225

EMEA—Europe, Middle East and Africa

Allowance for Credit Losses on Lending Activities
			Corporate		Consumer		Residential Real Estate		Wholesale Real Estate
											Total
			(dollars in millions)
Allowance for Loan Losses
	Balance at December 31, 2015	$	166	$	5	$	17	$	37	$	225
	Gross charge-offs		—		—		—		—		—
	Gross recoveries		—		—		—		—		—
	Net recoveries/(charge-offs)		—		—		—		—		—
	Provision for (release of) loan losses(1)		116		(1)		1		12		128
	Other(2)		(30)		—		—		—		(30)
	Balance at June 30, 2016	$	252	$	4	$	18	$	49	$	323
Allowance for Loan Losses by Impairment Methodology
	Inherent	$	147	$	4	$	18	$	49	$	218
	Specific		105		—		—		—		105
	Total allowance for loan losses at June 30, 2016	$	252	$	4	$	18	$	49	$	323
Loans Evaluated by Impairment Methodology(3)
	Inherent	$	23,604	$	23,337	$	22,638	$	7,415	$	76,994
	Specific		582		—		30		—		612
	Total loans evaluated at June 30, 2016	$	24,186	$	23,337	$	22,668	$	7,415	$	77,606
Allowance for Lending Commitments
	Balance at December 31, 2015	$	180	$	1	$	—	$	4	$	185
	Provision for lending commitments(4)		1		—		—		2		3
	Other		—		(1)		—		—		(1)
	Balance at June 30, 2016	$	181	$	—	$	—	$	6	$	187
Allowance for Lending Commitments by Impairment Methodology
	Inherent	$	173	$	—	$	—	$	6	$	179
	Specific		8		—		—		—		8
	Total allowance for lending commitments
	at June 30, 2016	$	181	$	—	$	—	$	6	$	187
Lending Commitments Evaluated by Impairment Methodology(3)
	Inherent	$	63,120	$	5,264	$	327	$	496	$	69,207
	Specific		64		—		—		—		64
	Total lending commitments evaluated
	at June 30, 2016	$	63,184	$	5,264	$	327	$	496	$	69,271

			Corporate		Consumer		Residential Real Estate		Wholesale Real Estate
											Total
			(dollars in millions)
Allowance for Loan Losses
	Balance at December 31, 2014	$	118	$	2	$	8	$	21	$	149
	Gross charge-offs		—		—		(1)		—		(1)
	Gross recoveries		1		—		—		—		1
	Net recoveries/(charge-offs)		1		—		(1)		—		—
	Provision for loan losses(1)		26		—		2		2		30
	Other(2)		(10)		—		—		—		(10)
	Balance at June 30, 2015	$	135	$	2	$	9	$	23	$	169
Allowance for Loan Losses by Impairment Methodology
	Inherent	$	130	$	2	$	9	$	23	$	164
	Specific		5		—		—		—		5
	Total allowance for loan losses at June 30, 2015	$	135	$	2	$	9	$	23	$	169
Loans Evaluated by Impairment Methodology(3)
	Inherent	$	22,479	$	19,464	$	18,214	$	6,388	$	66,545
	Specific		21		—		27		—		48
	Total loans evaluated at June 30, 2015	$	22,500	$	19,464	$	18,241	$	6,388	$	66,593
Allowance for Lending Commitments
	Balance at December 31, 2014	$	147	$	—	$	—	$	2	$	149
	Provision for lending commitments(4)		6		—		—		2		8
	Balance at June 30, 2015	$	153	$	—	$	—	$	4	$	157
Allowance for Lending Commitments by Impairment Methodology
	Inherent	$	153	$	—	$	—	$	4	$	157
	Specific		—		—		—		—		—
	Total allowance for lending commitments at
	June 30, 2015	$	153	$	—	$	—	$	4	$	157
Lending Commitments Evaluated by Impairment Methodology(3)
	Inherent	$	65,183	$	4,235	$	289	$	623	$	70,330
	Specific		—		—		—		—		—
	Total lending commitments evaluated at
	June 30, 2015	$	65,183	$	4,235	$	289	$	623	$	70,330

_______________

• The Firm recorded provisions of $16 million and $4 million for loan losses for the current quarter and prior year quarter, respectively.
• Amount includes the impact related to the transfer to loans held for sale and foreign currency translation adjustments.
• Loan balances are gross of the allowance for loan losses, and lending commitments are gross of the allowance for lending commitments.
• The Firm recorded a release of $13 million and $29 million for commitments for the current quarter and prior year quarter, respectively.

Troubled Debt Restructurings

At June 30,2016 and December 31, 2015, the impaired loans and lending commitments within held for investment include TDRs of $137.2 million and $44.0 million related to loans and $18.7 million and $34.8 million related to lending commitments, respectively, within corporate loans. At June 30,2016 and December 31, 2015, the Firm recorded an allowance of $12.1 million and $5.1 million, respectively, against these TDRs. These restructurings typically include modifications of interest rates, collateral requirements, other loan covenants, and payment extensions.

Employee Loans

Employee loans are granted primarily in conjunction with a program established in the Wealth Management business segment to retain and recruit certain employees. These loans are recorded in Customer and other receivables in the consolidated balance sheets. These loans are full recourse, generally require periodic payments and have repayment terms ranging from 1 to 12 years. The Firm establishes an allowance for loan amounts it does not consider recoverable, which is recorded in Compensation and benefits expense. At June 30,2016, the Firm had $4,877 million of employee loans, net of an allowance of approximately $100 million. At December 31, 2015, the Firm had $4,923 million of employee loans, net of an allowance of approximately $108 million.

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Equity Method Investments

6 Months Ended

Jun. 30, 2016

Equity Method Investments and Joint Ventures

Equity Method Investments

8.Equity Method Investments

Overview

The Firm has investments accounted for under the equity method of accounting (see Note 1 to the consolidated financial statements in the 2015 Form 10-K) of $3,235 million and $3,144 million at June 30,2016and December 31, 2015, respectively, included in Other assets—Other investments in the consolidated balance sheets. Income (loss) from equity method investments was $(14) million and $45 million for the current quarter and prior year quarter, respectively and $1 million and $83 million for the current year period and prior year period, respectively, and is included in Other revenues in the consolidated statements of income. In addition, a loss of $35 million was recognized in the current quarter in connection with the sale of solar investments and impairments of the remaining unsold solar investments accounted for under the equity method.

Japanese Securities Joint Venture

Included in the equity method investments is the Firm’s 40% voting interest (“40% interest”) in Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”). Mitsubishi UFJ Financial Group, Inc.(“MUFG”) holds a 60% voting interest. The Firm accounts for its equity method investment in MUMSS within the Institutional Securities business segment. During the current quarter and prior year quarter, the Firm recorded income from its 40% interest in MUMSS of $23 million and $71million, respectively, and income of $57 million and $140 million in the current year period and prior year period, respectively, within Other revenues in the consolidated statements of income.

In June 2015, MUMSS paid a dividend of approximately $291 million, of which the Firm received approximately $116 million for its proportionate share of MUMSS.

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Deposits

6 Months Ended

Jun. 30, 2016

Deposits [Abstract]

Deposits

9. Deposits

Deposits
			At June 30,		At December 31,
			2016(1)		2015(1)
		(dollars in millions)
Savings and demand deposits		$	151,014	$	153,346
Time deposits(2)			1,679		2,688
	Total(3)	$	152,693	$	156,034
(1)	Total deposits subject to the FDIC insurance at June 30, 2016 and December 31, 2015 were $110 billion and $113 billion, respectively. Of the total time deposits subject to the FDIC insurance at June 30, 2016 and December 31, 2015, $20 million and $14 million, respectively, met or exceeded the FDIC insurance limit.
(2)	Certain time deposit accounts are carried at fair value under the fair value option (see Note 3).
(3)	Deposits were primarily held in the U.S.

Interest bearing deposits at June 30,2016included $151,008 million of savings deposits payable upon demand and $1,043 million of time deposits maturing in 2016, $578 million of time deposits maturing in 2017 and $11 million of time deposits maturing in 2018.

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Long-Term Borrowings and Other Secured Financings

6 Months Ended

Jun. 30, 2016

Components of Other Secured Financings

Long-Term Borrowings and Other Secured Financings

10.Long-Term Borrowings and Other Secured Financings

Long-Term Borrowings

Components of Long-term Borrowings
		At June 30, 2016		At December 31, 2015
		(dollars in millions)
Senior debt	$	149,519	$	140,494
Subordinated debt		11,120		10,404
Junior subordinated
debentures		2,853		2,870
Total	$	163,492	$	153,768

During the current year period and prior year period, the Firm issued notes with a principal amount of approximately $20.6 billion and $22.9 billion, respectively, and approximately $15.9 billion and $13.0billion, respectively, in aggregate long-term borrowings matured or were retired.

The weighted average maturity of long-term borrowings, based upon stated maturity dates, was approximately 6.3 years and 6.1 years at June 30,2016and December 31, 2015, respectively.

Other Secured Financings

Other secured financings include the liabilities related to transfers of financial assets that are accounted for as financings rather than sales, consolidated VIEs where the Firm is deemed to be the primary beneficiary, pledged commodities, certain equity-linked notes and other secured borrowings. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets.See Note 12 for further information on Other secured financings related to VIEs and securitization activities.

Components of Other Secured Financings
			At		At
			June 30,		December 31,
			2016		2015
			(dollars in millions)
Secured financings with original
	maturities greater than one year	$	8,159	$	7,629
Secured financings with original
	maturities one year or less		1,444		1,435
Failed sales(1)			298		400
	Total	$	9,901	$	9,464

___________

(1) For more information on failed sales, see Note 12.

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Commitments, Guarantees and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments, Guarantees and Contingencies [Abstract]

Commitments, Guarantees and Contingencies

11.    Commitments, Guarantees and Contingencies

Commitments

The Firm’s commitments are summarized in the following table by years to maturity. Since commitments associated with these instruments may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.

Commitments
			Years to Maturity at June 30, 2016
			Less
			than 1		1-3		3-5		Over 5		Total
			(dollars in millions)
Letters of credit and other financial guarantees
	obtained to satisfy collateral requirements	$	125	$	—	$	1	$	42	$	168
Investment activities			598		93		16		290		997
Corporate lending commitments(1)			15,625		24,405		47,248		1,501		88,779
Consumer lending commitments			5,255		5		—		4		5,264
Residential real estate lending commitments			52		43		87		236		418
Wholesale real estate lending commitments			127		266		137		69		599
Forward-starting reverse repurchase agreements and
	securities borrowing agreements(2)		69,990		—		—		—		69,990
Underwriting commitments			25		—		—		—		25
	Total	$	91,797	$	24,812	$	47,489	$	2,142	$	166,240

(1)Due to the nature of the Firm’s obligations under the commitments, these amounts include certain commitments participated to third parties of $3.9 billion.

(2) The Firm enters into forward-starting reverse repurchase and securities borrowing agreements that primarily settle within three business days of the trade date, and of the total amount at June 30,2016, $59.7 billion settled within three business days.

For a further description of these commitments, refer to Note 12 to the consolidated financial statements in the 2015 Form 10-K.

The Firm sponsors several non-consolidated investment funds for third-party investors where it typically acts as general partner of, and investment advisor to, these funds and typically commits to invest a minority of the capital of such funds, with subscribing third-party investors contributing the majority. The Firm’s employees, including its senior officers as well as the Firm’s Board of Directors, may participate on the same terms and conditions as other investors in certain of these funds that the Firm forms primarily for client investment, except that the Firm may waive or lower applicable fees and charges for its employees. The Firm has contractual capital commitments, guarantees, lending facilities and counterparty arrangements with respect to these investment funds.

Guarantees

Obligations Under Guarantee Arrangements at June 30, 2016
			Maximum Potential Payout/Notional										Carrying Amount (Asset)/ Liability		Collateral/ Recourse
			Years to Maturity
			Less than 1		1-3		3-5		Over 5		Total
			(dollars in millions)
Credit derivative contracts(1)		$	211,128	$	200,959	$	123,957	$	31,246	$	567,290	$	396	$	—
Other credit contracts			43		25		—		276		344		(17)		—
Non-credit derivative contracts(1)			1,087,106		638,791		290,370		540,112		2,556,379		81,420		—
Standby letters of credit and other
	financial guarantees issued(2)		803		1,091		1,250		5,888		9,032		(123)		6,831
Market value guarantees			63		250		96		15		424		2		6
Liquidity facilities			3,001		—		—		—		3,001		(5)		5,406
Whole loan sales guarantees			—		—		2		23,396		23,398		9		—
Securitization representations and
	warranties		—		—		—		62,180		62,180		103		—
General partner guarantees			35		39		53		308		435		85		—

_____________

(1)Carrying amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting. For further information on derivative contracts, see Note 4.

(2) These amounts include certainissued standby letters of credit participated to third parties totaling $0.7 billion due to the nature of the Firm’s obligations under these arrangements.

The Firm has obligations under certain guarantee arrangements, including contracts and indemnification agreements, that contingently require the Firm to make payments to the guaranteed party based on changes in an underlying measure (such as an interest or foreign exchange rate, security or commodity price, an index, or the occurrence or non-occurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Also included as guarantees are contracts that contingently require the Firm to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others.

For more information on the nature of the obligation and related business activity for market value guarantees, liquidity facilities, whole loan sale guarantees and general partner guarantees related to certain investment management funds, as well as the other products in the previous table, please see Note 12 to the consolidated financial statements in the 2015 Form 10-K.

Other Guarantees and Indemnities

In the normal course of business, the Firm provides guarantees and indemnifications in a variety of transactions. These provisions generally are standard contractual terms. Certain of these guarantees and indemnifications related to trust preferred securities, indemnities and exchange/clearinghouse member guarantees are described in Note 12 to the consolidated financial statements in the 2015 Form 10-K.

In addition, in the ordinary course of business, the Firm guarantees the debt and/or certain trading obligations (including obligations associated with derivatives, foreign exchange contracts and the settlement of physical commodities) of certain subsidiaries. These guarantees generally are entity or product specific and are required by investors or trading counterparties. The activities of the Firm’s subsidiaries covered by these guarantees (including any related debt or trading obligations) are included in the consolidated financial statements.

Trust Preferred Securities

The Firm has established Morgan Stanley Capital Trusts for the limited purpose of issuing trust preferred securities to third parties and lending such proceeds to the Firm in exchange for junior subordinated debentures. The Morgan Stanley Capital Trusts are SPEs, and only the Parent provides a guarantee for the trust preferred securities. The Firm has directly guaranteed the repayment of the trust preferred securities to the holders in accordance with the terms thereof. See Note 11 to the consolidated financial statements in the 2015 Form 10-K for details on the Firm’s junior subordinated debentures. Additionally, see Note 20 for further information about subsequent events.

Finance Subsidiary

The Parent Company fully and unconditionally guarantees the securities issued by Morgan Stanley Finance LLC, a 100%-owned finance subsidiary.

Contingencies

Legal.    In the normal course of business, the Firm has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In some cases, the entities that would otherwise be the primary defendants in such cases are bankrupt or are in financial distress. These actions have included, but are not limited to, residential mortgage and credit crisis related matters. Over the last several years, the level of litigation and investigatory activity (both formal and informal) by governmental and self-regulatory agencies has increased materially in the financial services industry. As a result, the Firm expects that it may become the subject of increased claims for damages and other relief and, while the Firm has identified below any individual proceedings where the Firm believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that have not yet been asserted or are not yet determined to be probable or possible and reasonably estimable losses.

The Firm contests liability and/or the amount of damages as appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the consolidated financial statements and the Firm can reasonably estimate the amount of that loss, the Firm accrues the estimated loss by a charge to income. The Firm’s future legal expenses may fluctuate from period to period, given the current environment regarding government investigations and private litigation affecting global financial services firms, including the Firm.

In many proceedings and investigations, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal proceedings and investigations, the Firm cannot reasonably estimate such losses, particularly for proceedings and investigations where the factual record is being developed or contested or where plaintiffs or governmental entities seek substantial or indeterminate damages, restitution, disgorgement or penalties. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, determination of issues related to class certification and the calculation of damages or other relief, and by addressing novel or unsettled legal questions relevant to the proceedings or investigations in question, before a loss or additional loss or range of loss or additional range of loss can be reasonably estimated for a proceeding or investigation.

For certain other legal proceedings and investigations, the Firm can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on the Firm’s consolidated financial statements as a whole, other than the matters referred to in the following paragraphs.

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against the Firm, styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that the Firm misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that the Firm knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes it could incur a loss in this action of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On January 25, 2011, the Firm was named as a defendant in The Bank of New York Mellon Trust, National Association v. Morgan Stanley Mortgage Capital, Inc., a litigation pending in the United States District Court for the Southern District of New York (“SDNY”). The suit, brought by the trustee of a series of commercial mortgage pass-through certificates, alleges that the Firm breached certain representations and warranties with respect to an $81 million commercial mortgage loan that was originated and transferred to the trust by the Firm. The complaint seeks, among other things, to have the Firm repurchase the loan and pay additional monetary damages. On June 16, 2014, the court granted the Firm’s supplemental motion for summary judgment, which was appealed by plaintiff. On April 27, 2016, the United States Court of Appeals for the Second Circuit vacated the judgment of the SDNY and remanded the case to the SDNY for further proceedings consistent with its opinion. Based on currently available information, the Firm believes it could incur a loss in this action of up to approximately $81 million, plus pre-judgment interest, fees and costs.

On August 7, 2012, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-4SL and Mortgage Pass-Through Certificates, Series 2006-4SL against the Firm. The matter is styled Morgan Stanley Mortgage Loan Trust 2006-4SL, et al. v. Morgan Stanley Mortgage Capital Inc. and is pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $303 million, breached various representations and warranties. The complaint seeks, among other relief, rescission of the mortgage loan purchase agreement underlying the transaction, specific performance and unspecified damages and interest. On August 8, 2014, the court granted in part and denied in part the Firm’s motion to dismiss. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $149 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On August 8, 2012, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-14SL, Mortgage Pass-Through Certificates, Series 2006-14SL, Morgan Stanley Mortgage Loan Trust 2007-4SL and Mortgage Pass-Through Certificates, Series 2007-4SL against the Firm styled Morgan Stanley Mortgage Loan Trust 2006-14SL, et al. v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley MortgageCapital Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trusts, which had original principal balances of approximately $354 million and $305 million respectively, breached various representations and warranties. The complaint seeks, among other relief, rescission of the mortgage loan purchase agreements underlying the transactions, specific performance and unspecified damages and interest. On August 16, 2013, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $527 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On September 28, 2012, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-13ARX against the Firm styled Morgan Stanley Mortgage Loan Trust 2006-13ARX v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc., pending in the Supreme Court of NY. The plaintiff filed an amended complaint on January 17, 2013, which asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $609 million, breached various representations and warranties. The amended complaint seeks, among other relief, declaratory judgment relief, specific performance and unspecified damages and interest. By order dated September 30, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the amended complaint. On July 13, 2015, the plaintiff perfected its appeal from the court’s September 30, 2014 decision. Based oncurrently available information, the Firm believes that it could incur a loss in this action of up to approximately $170 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On January 10, 2013, U.S. Bank, in its capacity as trustee, filed a complaint on behalf of Morgan Stanley Mortgage Loan Trust 2006-10SL and Mortgage Pass-Through Certificates, Series 2006-10SL against the Firm styled Morgan Stanley Mortgage Loan Trust 2006-10SL, et al. v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $300 million, breached various representations and warranties. The complaint seeks, among other relief, an order requiring the Firm to comply with the loan breach remedy procedures in the transaction documents, unspecified damages, and interest. On August 8, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $197 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against the Firm, certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff currently at issue in this action was approximately $644 million. The complaint alleges causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 10, 2014, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. The Firm perfected its appeal from that decision on June 12, 2015. At June 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $258 million, and the certificates had incurred actual losses of approximately $84 million. Based on currently available information, the Firm believes it could incur a loss in this action up to the difference between the $258 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Firm, or upon sale, plus pre- and post-judgment interest, fees and costs. The Firm may be entitled to be indemnified for some of these losses.

On July 8, 2013, U.S. Bank National Association, in its capacity as trustee, filed a complaint against the Firm styled U.S. Bank National Association, solely in its capacity as Trustee of the Morgan Stanley Mortgage Loan Trust 2007-2AX (MSM 2007-2AX) v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and Greenpoint Mortgage Funding, Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $650 million, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified damages and interest. On August 22, 2013, the Firm filed a motion to dismiss the complaint, which was granted in part and denied in part on November 24, 2014. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $240 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On December 30, 2013, Wilmington Trust Company, in its capacity as trustee, filed a complaint against the Firm. The matter is styled Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al. and is pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $516 million, breached various representations and warranties. The complaint seeks, among other relief, unspecified damages, attorneys’ fees, costs and interest. On February 28, 2014, the defendants filed a motion to dismiss the complaint, which was granted in part and denied in part on June 14, 2016. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $152 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus attorney’s fees, costs and interest, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On April 28, 2014, Deutsche Bank National Trust Company, in its capacity as trustee for Morgan Stanley Structured Trust I 2007-1, filed a complaint against the Firm styled Deutsche Bank National Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC, pending in the SDNY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $735 million, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified compensatory and/or rescissory damages, interest and costs. On April 3, 2015, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $292 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands that it did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

On January 23, 2015, Deutsche Bank National Trust Company, in its capacity as trustee, filed a complaint against the Firm styled Deutsche Bank National Trust Company solely in its capacity as Trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc., pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that the loans in the trust, which had an original principal balance of approximately $1.05 billion, breached various representations and warranties. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential, rescissory, equitable and punitive damages, attorneys’ fees, costs and other related expenses, and interest. On October 20, 2015, the court granted in part and denied in part the Firm’s motion to dismiss the complaint. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $277 million, the total original unpaid balance of the mortgage loans for which the Firm received repurchase demands from a certificate holder and a monoline insurer that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, but plaintiff is seeking to expand the number of loans at issue and the possible range of loss could increase.

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Variable Interest Entities and Securitization Activities

6 Months Ended

Jun. 30, 2016

Securitization Activities and Variable Interest Entities [Abstract]

Variable Interest Entity Disclosures

12.Variable Interest Entities and Securitization Activities

Overview

The Firm is involved with various special purpose entities (“SPE”) in the normal course of business. In most cases, these entities are deemed to be VIEs. The Firm’s transactions with VIEs primarily include securitizations, municipal tender option bond trusts, credit protection purchased through credit-linked notes, other structured financings, collateralized loan and debt obligations, equity-linked notes, partnership investments and certain investment management funds. The Firm’s continuing involvement in VIEs that it does not consolidate can include ownership of retained interests in Firm-sponsored transactions, interests purchased in the secondary market (both for Firm-sponsored transactions and transactions sponsored by third parties), and derivatives with securitization SPEs (primarily interest rate derivatives in commercial mortgage and residential mortgage securitizations and credit derivatives in which the Firm has purchased protection in synthetic CDOs).

For a further discussion on the Firm’s VIEs, the determination and structure of VIEs and securitization activities, see Note 13 to the consolidated financial statements in the 2015 Form 10-K.

As a result of adopting the accounting update, Amendments to the Consolidation Analysis, on January 1, 2016, certain consolidated entities are now considered VIEs and are included in the balances at June 30, 2016. See Note 2 for further information.

Consolidated VIEs
Assets and Liabilities by Type of Activity
		At June 30, 2016				At December 31, 2015
		VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
		(dollars in millions)
Credit-linked notes	$	901	$	—	$	900	$	—
Other structured financings		924		240		787		13
Asset-backed securitizations(1)		319		191		668		423
Other(2)		931		29		245		—
Total	$	3,075	$	460	$	2,600	$	436

_________

• The value of assets is determined based on the fair value of the liabilities of and the interests owned by the Firm in such VIEs, because the fair values for the liabilities and interests owned are more observable.
• Other primarily includes certain operating entities, investment funds and structured transactions.

Assets and Liabilities by Balance Sheet Caption
		At June 30,		At December 31,
		2016		2015
Assets		(dollars in millions)
Cash and due from banks		$	62	$	14
Trading assets, at fair value			1,973		1,842
Customer and other receivables			3		3
Goodwill			18		—
Intangible assets			141		—
Other assets			878		741
	Total assets	$	3,075	$	2,600
Liabilities
Other secured financings, at fair value		$	430	$	431
Other liabilities and accrued expenses			30		5
	Total liabilities	$	460	$	436

Consolidated VIE assets and liabilities are presented in the previous tables after intercompany eliminations. The assets owned by many consolidated VIEs cannot be removed unilaterally by the Firm and are not generally available to the Firm. The related liabilities issued by many consolidated VIEs are non-recourse to the Firm. In certain other consolidated VIEs, the Firm either has the unilateral right to remove assets or provide additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

As part of the Institutional Securities business segment’s securitization and related activities, the Firm has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 11).

In general, the Firm’s exposure to loss in consolidated VIEs is limited to losses that would be absorbed on the VIE’s net assets recognized in its financial statements, net of amounts absorbed by third-party variable interest holders. At June 30,2016 and December 31, 2015, noncontrolling interests in the consolidated financial statements related to consolidated VIEs were $257 million and $37 million, respectively. The Firm also had additional maximum exposure to losses of approximately $76 million and $72 million at June 30,2016and December 31, 2015, respectively, primarily related to certain derivatives, commitments, guarantees and other forms of involvement.

Non-consolidated VIEs

The following tables include all VIEs in which the Firm has determined that its maximum exposure to loss is greater than specific thresholds or meets certain other criteria. Most of the VIEs included in the following tables are sponsored by unrelated parties; the Firm’s involvement generally is the result of its secondary market-making activities, securities held in its Investment securities portfolio (see Note 5), and certain investments in funds.

Non-Consolidated VIE Assets and Liabilities, Maximum and Carrying Value of Exposure to Loss
			At June 30, 2016
			Mortgage- and Asset-Backed Securitizations			Collateralized Debt Obligations		Municipal Tender Option Bonds		Other Structured Financings		Other
			(dollars in millions)
VIE assets that the Firm does not consolidate
	(unpaid principal balance)		$	115,088	$	6,825	$	4,999	$	4,081	$	39,281
Maximum exposure to loss:
	Debt and equity interests		$	12,670	$	955	$	31	$	1,712	$	4,706
	Derivative and other contracts			—		—		3,001		—		73
	Commitments, guarantees and other			612		350		—		363		300
		Total maximum exposure to loss	$	13,282	$	1,305	$	3,032	$	2,075	$	5,079
Carrying value of exposure to loss—Assets:
	Debt and equity interests		$	12,670	$	955	$	3	$	1,324	$	4,706
	Derivative and other contracts			—		—		5		—		27
		Total carrying value of exposure to loss—Assets	$	12,670	$	955	$	8	$	1,324	$	4,733
Carrying value of exposure to loss—Liabilities:
	Derivative and other contracts		$	—	$	—	$	—	$	—	$	31
	Commitments, guarantees and other			—		—		—		2		10
		Total carrying value of exposure to loss—Liabilities	$	—	$	—	$	—	$	2	$	41

			At December 31, 2015
			Mortgage- and Asset-Backed Securitizations			Collateralized Debt Obligations		Municipal Tender Option Bonds		Other Structured Financings		Other
			(dollars in millions)
VIE assets that the Firm does not consolidate
	(unpaid principal balance)		$	126,872	$	8,805	$	4,654	$	2,201	$	20,775
Maximum exposure to loss:
	Debt and equity interests		$	13,361	$	1,259	$	1	$	1,129	$	3,854
	Derivative and other contracts			—		—		2,834		—		67
	Commitments, guarantees and other			494		231		—		361		222
		Total maximum exposure to loss	$	13,855	$	1,490	$	2,835	$	1,490	$	4,143
Carrying value of exposure to loss—Assets:
	Debt and equity interests		$	13,361	$	1,259	$	1	$	685	$	3,854
	Derivative and other contracts			—		—		5		—		13
		Total carrying value of exposure to loss—Assets	$	13,361	$	1,259	$	6	$	685	$	3,867
Carrying value of exposure to loss—Liabilities:
	Derivative and other contracts		$	—	$	—	$	—	$	—	$	15
	Commitments, guarantees and other			—		—		—		3		—
		Total carrying value of exposure to loss—Liabilities	$	—	$	—	$	—	$	3	$	15

Non-Consolidated VIE Mortgage- and Asset-Backed Securitization Assets
			At June 30, 2016				At December 31, 2015
			Unpaid Principal Balance		Debt and Equity Interests		Unpaid Principal Balance		Debt and Equity Interests
			(dollars in millions)
Residential mortgages		$	3,708	$	410	$	13,787	$	1,012
Commercial mortgages			55,158		2,576		57,313		2,871
U.S. agency collateralized mortgage obligations			20,853		3,766		13,236		2,763
Other consumer or commercial loans			35,369		5,918		42,536		6,715
	Total mortgage- and asset-backed securitization assets	$	115,088	$	12,670	$	126,872	$	13,361

The Firm’s maximum exposure to loss often differs from the carrying value of the variable interests held by the Firm. The maximum exposure to loss is dependent on the nature of the Firm’s variable interest in the VIEs and is limited to the notional amounts of certain liquidity facilities, other credit support, total return swaps, written put options, and the fair value of certain other derivatives and investments the Firm has made in the VIEs. Liabilities issued by VIEs generally are non-recourse to the Firm. Where notional amounts are utilized in quantifying maximum exposure related to derivatives, such amounts do not reflect fair value write-downs already recorded by the Firm.

The Firm’s maximum exposure to loss does not include the offsetting benefit of any financial instruments that the Firm may utilize to hedge these risks associated with its variable interests. In addition, the Firm’s maximum exposure to loss is not reduced by the amount of collateral held as part of a transaction with the VIE or any party to the VIE directly against a specific exposure to loss.

Securitization transactions generally involve VIEs. Primarily as a result of its secondary market-making activities, the Firm owned additional VIE assets mainly issued by securitization SPEs for which the maximum exposure to loss is less than specific thresholds. These additional assets totaled $12.7 billion and $12.9 billion at June 30,2016 and December 31, 2015, respectively. These assets were either retained in connection with transfers of assets by the Firm, acquired in connection with secondary market-making activities or held as AFS securities in its Investment securities portfolio (see Note 5) or held as investments in funds. At June 30,2016 and December 31, 2015, these assets consisted of securities backed by residential mortgage loans, commercial mortgage loans or other consumer loans, such as credit card receivables, automobile loans and student loans, CDOs or CLOs, and investment funds. The Firm’s primary risk exposure is to the securities issued by the SPE owned by the Firm, with the risk highest on the most subordinate class of beneficial interests. These assets generally are included in Trading assets—Corporate and other debt, Trading assets—Investments or AFS securities within its Investment securities portfolio and are measured at fair value (see Note 3). The Firm does not provide additional support in these transactions through contractual facilities, such as liquidity facilities, guarantees or similar derivatives. The Firm’s maximum exposure to loss generally equals the fair value of the assets owned.

Transfers of Assets with Continuing Involvement

Transactions with SPEs in which the Firm, acting as principal, transferred financial assets with continuing involvement and received sales treatment are shown herein.

				At June 30, 2016
				Residential Mortgage Loans		Commercial Mortgage Loans		U.S. Agency Collateralized Mortgage Obligations		Credit-Linked Notes and Other(1)
				(dollars in millions)
SPE assets (unpaid principal balance)(2)			$	21,239	$	51,025	$	11,116	$	11,668
Retained interests (fair value):
	Investment grade		$	—	$	43	$	755	$	—
	Non-investment grade			54		64		—		974
		Total retained interests (fair value)	$	54	$	107	$	755	$	974
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	32	$	142	$	—
	Non-investment grade			53		47		—		—
		Total interests purchased in the secondary market (fair value)	$	53	$	79	$	142	$	—
Derivative assets (fair value)			$	—	$	291	$	—	$	206
Derivative liabilities (fair value)				—		—		—		449

				At December 31, 2015
				Residential Mortgage Loans		Commercial Mortgage Loans		U.S. Agency Collateralized Mortgage Obligations		Credit-Linked Notes and Other(1)
				(dollars in millions)
SPE assets (unpaid principal balance)(2)			$	22,440	$	72,760	$	17,978	$	12,235
Retained interests (fair value):
	Investment grade		$	—	$	238	$	649	$	—
	Non-investment grade			160		63		—		1,136
		Total retained interests (fair value)	$	160	$	301	$	649	$	1,136
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	88	$	99	$	—
	Non-investment grade			60		63		—		10
		Total interests purchased in the secondary market (fair value)	$	60	$	151	$	99	$	10
Derivative assets (fair value)			$	—	$	343	$	—	$	151
Derivative liabilities (fair value)				—		—		—		449

_____________

(1)Amounts include CLO transactions managed by unrelated third parties.

(2) Amounts include assets transferred by unrelated transferors.

				At June 30, 2016
				Level 1		Level 2		Level 3		Total
				(dollars in millions)
Retained interests (fair value):
	Investment grade		$	—	$	798	$	—	$	798
	Non-investment grade			—		15		1,077		1,092
		Total retained interests (fair value)	$	—	$	813	$	1,077	$	1,890
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	174	$	—	$	174
	Non-investment grade			—		85		15		100
		Total interests purchased in the secondary market (fair value)	$	—	$	259	$	15	$	274
Derivative assets (fair value)			$	—	$	482	$	15	$	497
Derivative liabilities (fair value)				—		102		347		449

				At December 31, 2015
				Level 1		Level 2		Level 3		Total
				(dollars in millions)
Retained interests (fair value):
	Investment grade		$	—	$	886	$	1	$	887
	Non-investment grade			—		17		1,342		1,359
		Total retained interests (fair value)	$	—	$	903	$	1,343	$	2,246
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	187	$	—	$	187
	Non-investment grade			—		112		21		133
		Total interests purchased in the secondary market (fair value)	$	—	$	299	$	21	$	320
Derivative assets (fair value)			$	—	$	466	$	28	$	494
Derivative liabilities (fair value)				—		110		339		449

Transferred assets are carried at fair value prior to securitization, and any changes in fair value are recognized in the consolidated statements of income. The Firm may act as underwriter of the beneficial interests issued by these securitization vehicles. Investment banking underwriting net revenues are recognized in connection with these transactions. The Firm may retain interests in the securitized financial assets as one or more tranches of the securitization. These retained interests are included in the consolidated balance sheets at fair value. Any changes in the fair value of such retained interests are recognized in the consolidated statements of income.

Proceeds from New Securitization Transactions and Retained Interests in Securitization Transactions
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2016		2015		2016		2015
		(dollars in millions)
Proceeds received from new securitization transactions	$	4,163	$	6,273	$	6,876	$	11,164
Proceeds from retained interests in securitization transactions		502		658		1,133		1,606

Net gains on sale of assets in securitization transactions at the time of the sale were not material in the current quarter, current year period, prior year quarter and prior year period.

The Firm has provided, or otherwise agreed to be responsible for representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 11).

Proceeds from Sales to CLO Entities Sponsored by Non-Affiliates
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2016		2015		2016		2015
		(dollars in millions)
Proceeds from sale of corporate loans sold to those SPEs	$	—	$	621	$	31	$	966

Net gains on sale of corporate loans to CLO transactions at the time of sale were not material in the current quarter, current year period, prior year quarter and prior year period.

The Firm also enters into transactions in which it sells equity securities and contemporaneously enters into bilateral OTC equity derivatives with the purchasers of the securities, through which it retains the exposure to the securities as shown in the following table.

		At June 30, 2016		At December 31, 2015
		(dollars in millions)
Carrying value of assets derecognized at the time of sale and gross cash proceeds	$	9,524	$	7,878
Fair value of assets sold		9,692		7,935
Fair value of derivative assets recognized in the consolidated balance sheets		218		97
Fair value of derivative liabilities recognized in the consolidated balance sheets		50		40

Failed Sales

For transfers that fail to meet the accounting criteria for a sale, the Firm continues to recognize the assets in Trading assets at fair value, and the Firm recognizes the associated liabilities in Other secured financings at fair value in the consolidated balance sheets (see Note 10).

The assets transferred to unconsolidated VIEs in transactions accounted for as failed sales cannot be removed unilaterally by the Firm and are not generally available to the Firm. The related liabilities are also non-recourse to the Firm. In certain other failed sale transactions, the Firm has the right to remove assets or provide additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

Carrying Value of Assets and Liabilities Related to Failed Sales
		At June 30, 2016				At December 31, 2015
		Assets		Liabilities		Assets		Liabilities
		(dollars in millions)
Failed sales	$	298	$	298	$	400	$	400

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Regulatory Requirements

6 Months Ended

Jun. 30, 2016

Regulatory Requirements

Regulatory Requirements

13.Regulatory Requirements

Regulatory Capital Framework

For a discussion of the Firm’s regulatory capital framework, see Note 14 to the consolidated financial statements in the 2015 Form 10-K.

Risk-Based Capital Requirement

The Firm is required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. The Firm’s binding risk-based capital ratios for regulatory purposes are the lower of the capital ratios computed under the (i) standardized approaches for calculating credit risk-weighted assets (“RWAs”) and market risk RWAs (the “Standardized Approach”); and (ii) applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”).

In addition to the minimum risk-based capital ratio requirements, on a fully phased-in basis by 2019, the Firm will be subject to:

• A greater than 2.5% Common Equity Tier 1 capital conservation buffer;
• The Common Equity Tier 1 global systemically important bank (“G-SIB”) capital surcharge, currently at 3%; and
• Up to a 2.5% Common Equity Tier 1 countercyclical capital buffer, currently set by banking regulators at zero (collectively, the “buffers”).

In 2016, the phase-in amount for each of the buffers is 25% of the fully phased-in buffer requirement. Failure to maintain the buffers will result in restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers.

The methods for calculating each of the Firm’s risk-based capital ratios will change through January 1, 2022 as aspects of the capital rules are phased in. These changes may result in differences in the Firm’s reported capital ratios from one reporting period to the next that are independent of changes to its capital base, asset composition, off-balance sheet exposures or risk profile.

For a further discussion of the Firm’s calculation of risk-based capital ratios, see Note 14 to the consolidated financial statements in the 2015 Form 10-K.

The Firm’s Regulatory Capital and Capital Ratios

At June 30,2016 and December 31, 2015, the Firm’s binding ratios are based on the Advanced Approach transitional rules.

Regulatory Capital Measures and Minimum Regulatory Capital Ratios
			At June 30, 2016				At December 31, 2015
			Amount	Ratio	Minimum Ratio(1)		Amount	Ratio	Minimum Ratio(1)
			(dollars in millions)
Regulatory capital and capital ratios:
	Common Equity Tier 1 capital	$	59,796	16.8%	5.9%	$	59,409	15.5%	4.5%
	Tier 1 capital		66,782	18.8%	7.4%		66,722	17.4%	6.0%
	Total capital		79,830	22.4%	9.4%		79,403	20.7%	8.0%
	Tier 1 leverage(2)		—	8.3%	4.0%		—	8.3%	4.0%
Assets:
	Total RWAs	$	355,982	N/A	N/A	$	384,162	N/A	N/A
	Adjusted average assets(3)		804,511	N/A	N/A		803,574	N/A	N/A

__________

N/A—Not Applicable

(1) Percentages represent minimum regulatory capital ratios under the transitional rules.

(2)Tier 1 leverage ratios are calculated under Standardized Approach transitional rules.

(3) Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the calendar quarter, adjusted for disallowed goodwill, transitional intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments.

U.S. Bank Subsidiaries’ Regulatory Capital and Capital Ratios

Morgan Stanley Bank, N.A. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA”) (collectively, “U.S. Bank Subsidiaries”) are subject to similar regulatory capital requirements as the Firm. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the Firm’s U.S. Bank Subsidiaries’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each of the Firm’s U.S. Bank Subsidiaries must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.

At June 30,2016 and December 31, 2015, the Firm’s U.S. Bank Subsidiaries’ binding ratios are based on the Standardized Approach transitional rules.

U.S. Bank Subsidiaries’ Regulatory Capital Measures and Required Capital Ratios
		Morgan Stanley Bank, N.A.
		At June 30, 2016				At December 31, 2015
		Amount	Ratio	Required Capital Ratio(1)		Amount	Ratio	Required Capital Ratio(1)
		(dollars in millions)
Common Equity Tier 1 capital	$	14,523	16.8%	6.5%	$	13,333	15.1%	6.5%
Tier 1 capital		14,523	16.8%	8.0%		13,333	15.1%	8.0%
Total capital		16,321	18.9%	10.0%		15,097	17.1%	10.0%
Tier 1 leverage		14,523	10.9%	5.0%		13,333	10.2%	5.0%

		Morgan Stanley Private Bank, National Association
		At June 30, 2016				At December 31, 2015
		Amount	Ratio	Required Capital Ratio(1)		Amount	Ratio	Required Capital Ratio(1)
		(dollars in millions)
Common Equity Tier 1 capital	$	5,153	28.0%	6.5%	$	4,197	26.5%	6.5%
Tier 1 capital		5,153	28.0%	8.0%		4,197	26.5%	8.0%
Total capital		5,186	28.2%	10.0%		4,225	26.7%	10.0%
Tier 1 leverage		5,153	11.4%	5.0%		4,197	10.5%	5.0%

_______

(1) Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes.

Under regulatory capital requirements adopted by the U.S. federal banking agencies, U.S. depository institutions, in order to be considered well-capitalized, must maintain certain minimum capital ratios. Each U.S. depository institution subsidiary of the Firm must be well-capitalized in order for the Firm to continue to qualify as a financial holding company and to continue to engage in the broadest range of financial activities permitted for financial holding companies. At June 30,2016and December 31, 2015, the Firm’s U.S. Bank Subsidiaries maintained capital at levels sufficiently in excess of the universally mandated well-capitalized requirements to address any additional capital needs and requirements identified by the U.S. federal banking regulators.

Broker-Dealer Regulatory Capital Requirements

Morgan Stanley & Co. LLC (“MS&Co.”) is a registered broker-dealer and registered futures commission merchant and, accordingly, is subject to the minimum net capital requirements of the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Commodity Futures Trading Commission (“CFTC”). MS&Co. has consistently operated with capital in excess of its regulatory capital requirements. MS&Co.’s net capital totaled $10,353 million and $10,254 million at June 30,2016and December 31, 2015, respectively, which exceeded the amount required by $8,397 million and $8,458 million, respectively. MS&Co. is required to hold tentative net capital in excess of $1 billion and net capital in excess of $500 million in accordance with the market and credit risk standards of Appendix E of SEC Rule 15c3-1. In addition, MS&Co. is required to notify the SEC in the event that its tentative net capital is less than $5 billion. At June 30,2016 and December 31, 2015, MS&Co. had tentative net capital in excess of the minimum and the notification requirements.

Morgan Stanley Smith Barney LLC (“MSSB LLC”) is a registered broker-dealer and introducing broker for the futures business and, accordingly, is subject to the minimum net capital requirements of the SEC and the CFTC. MSSB LLC has consistently operated with capital in excess of its regulatory capital requirements. MSSB LLC’s net capital totaled $3,752million and $3,613 million at June 30,2016 and December 31, 2015, respectively, which exceeded the amount required by $3,595million and $3,459million, respectively.

Morgan Stanley & Co. International plc (“MSIP”), a London-based broker-dealer subsidiary, is subject to the capital requirements of the Prudential Regulation Authority, and Morgan Stanley MUFG Securities Co., Ltd. (“MSMS”), a Tokyo-based broker-dealer subsidiary, is subject to the capital requirements of the Financial Services Agency. MSIP and MSMS have consistently operated with capital in excess of their respective regulatory capital requirements.

Other Regulated Subsidiaries

Certain other U.S. and non-U.S. subsidiaries of the Firm are subject to various securities, commodities and banking regulations, and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have consistently operated with capital in excess of their local capital adequacy requirements.

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Total Equity

6 Months Ended

Jun. 30, 2016

Redeemable Noncontrolling Interests and Total Equity

Total Equity

14. Total Equity

Dividends and Share Repurchases

The Firm repurchased approximately $625 million of our outstanding common stock as part of our share repurchase program during the current quarter and $1,250 million during the current year period. The Firm repurchased approximately $625 million during the prior year quarter and $875 million in the prior year period.

For a description of the 2015 capital plan, see Note 15 to the consolidated financial statements in the 2015 Form 10-K.

In June 2016, the Firm received a conditional non-objection from the Federal Reserve to its 2016 capital plan. The capital plan included a share repurchase of up to $3.5 billion of the Firm’s outstanding common stock during the period beginning July 1, 2016 through June 30, 2017. Additionally, the capital plan included an increase in the quarterly common stock dividend to $0.20 per share from $0.15 per share during the period beginning with the dividend declared on July 20, 2016 (see Note 20). The Federal Reserve Board also asked the Firm to submit an additional capital plan by December 29, 2016 addressing weaknesses identified in the Firm’s capital planning process.

Preferred Stock

For a description of Series A through Series J preferred stock issuances, see Note 15 to the consolidated financial statements in the 2015 Form 10-K. Dividends declared on the Firm’s outstanding preferred stock were $156 million during the current quarter and $141 million during the prior year quarter, and $234 million during the current year period and $219 million during the prior year period. On June 15, 2016, the Firm announced that the Board declared a quarterly dividend for preferred stock shareholders of record on June 30, 2016 that was paid on July 15, 2016. The Firm is authorized to issue 30 million shares of preferred stock. The preferred stock has a preference over the common stock upon liquidation. The Firm’s preferred stock qualifies as Tier 1 capital in accordance with regulatory capital requirements (see Note 13).

Preferred Stock Outstanding
		Shares				Carrying Value
		Outstanding		Liquidation		At		At
		At June 30,		Preference		June 30,		December 31,
Series		2016		per Share		2016		2015
		(shares in millions)				(dollars in millions)
A		44,000	$	25,000	$	1,100	$	1,100
C(1)		519,882		1,000		408		408
E		34,500		25,000		862		862
F		34,000		25,000		850		850
G		20,000		25,000		500		500
H		52,000		25,000		1,300		1,300
I		40,000		25,000		1,000		1,000
J		60,000		25,000		1,500		1,500
	Total				$	7,520	$	7,520

____________

(1)Series C is comprised of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million.

Accumulated Other Comprehensive Income (Loss)

Changes in AOCI by Component, Net of Tax and Noncontrolling Interests
			Foreign Currency Translation Adjustments		AFS Securities		Pensions, Postretirement and Other		DVA		Total
			(dollars in millions)
Balance at March 31, 2016		$	(831)	$	76	$	(373)	$	(110)	$	(1,238)
	Change in OCI before reclassifications		52		188		(5)		143		378
	Amounts reclassified from AOCI(2)(3)		—		(45)		—		—		(45)
	Net OCI during the period		52		143		(5)		143		333
Balance at June 30, 2016		$	(779)	$	219	$	(378)	$	33	$	(905)

			Foreign Currency Translation Adjustments		Change in Net Unrealized Gains (Losses) on AFS Securities		Pensions, Postretirement and Other		Debt Valuation Adjustment	Total
			(dollars in millions)
Balance at March 31, 2015		$	(883)	$	127	$	(510)	$	—	(1,266)
	Change in OCI before reclassifications		50		(208)		(4)		—	(162)
	Amounts reclassified from AOCI(3)		—		(20)		1		—	(19)
	Net OCI during the period		50		(228)		(3)		—	(181)
Balance at June 30, 2015		$	(833)	$	(101)	$	(513)	$	—	(1,447)

				Foreign Currency Translation Adjustments		Change in Net Unrealized Gains (Losses) on AFS Securities		Pensions, Postretirement and Other		Debt Valuation Adjustment		Total
				(dollars in millions)
Balance at December 31, 2015			$	(963)	$	(319)	$	(374)	$	—	$	(1,656)
	Cumulative adjustment for accounting
		change related to DVA(1)		—		—		—		(312)		(312)
	Change in OCI before reclassifications			184		590		(3)		371		1,142
	Amounts reclassified from AOCI(2)(3)			—		(52)		(1)		(26)		(79)
Net OCI during the period				184		538		(4)		345		1,063
Balance at June 30, 2016			$	(779)	$	219	$	(378)	$	33	$	(905)

Balance at December 31, 2014	$	(663)	$	(73)	$	(512)	$	—	$	(1,248)
Change in OCI before reclassifications		(170)		7		(4)		—		(167)
Amounts reclassified from AOCI(3)		—		(35)		3		—		(32)
Net OCI during the period		(170)		(28)		(1)		—		(199)
Balance at June 30, 2015	$	(833)	$	(101)	$	(513)	$	—	$	(1,447)

___________

• In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, a cumulative catch up adjustment was recorded as of January 1, 2016 to move the cumulative DVA amount, net of noncontrolling interest and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOCI. See Note 2 for further information.
• Amounts reclassified from AOCI related to realization of DVA are classified within Trading revenues in the consolidated statements of income. The tax impact in Provision for (benefit from) income taxes resulting from such reclassifications was $(15) million related to DVA in the current year period. See Note 2 for further information.
• Amounts reclassified from AOCI related to realized gains and losses from sales of AFS securities are classified within Other revenues in the consolidated statements of income. The tax impact in Provision for (benefit from) income taxes resulting from such reclassifications was $(26) million in the current quarter and $(30) million in the current year period, and $(11) million in the prior quarter and $(20) million for the prior year period.

Noncontrolling Interests

Noncontrolling interests were $1,259 million and $1,002 million at June 30,2016 and December 31, 2015, respectively. The increase in noncontrolling interests was primarily due to the consolidation of certain investment management funds sponsored by the Firm. See Note 2 for further information on the adoption of the accounting update Amendments to the Consolidation Analysis.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Common Share

15.Earnings per Common Share

Calculation of Basic and Diluted Earnings per Common Share (“EPS”)

			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(in millions, except for per share data)
Basic EPS:
	Income from continuing operations	$	1,650	$	1,833	$	2,810	$	4,301
	Income (loss) from discontinued operations		(4)		(2)		(7)		(7)
	Net income		1,646		1,831		2,803		4,294
	Net income applicable to noncontrolling interests		64		24		87		93
	Net income applicable to Morgan Stanley		1,582		1,807		2,716		4,201
	Less: Preferred stock dividends		(156)		(141)		(234)		(219)
	Less: Allocation of (earnings) loss to participating RSUs(1)		(1)		(1)		(1)		(3)
	Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
	Weighted average common shares outstanding		1,866		1,919		1,875		1,922
Earnings per basic common share:
	Income from continuing operations	$	0.77	$	0.87	$	1.33	$	2.07
	Income (loss) from discontinued operations		(0.01)		—		(0.01)		—
	Earnings per basic common share	$	0.76	$	0.87	$	1.32	$	2.07
Diluted EPS:
	Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
	Weighted average common shares outstanding		1,866		1,919		1,875		1,922
	Effect of dilutive securities: Stock options and RSUs(1)		33		41		32		40
	Weighted average common shares outstanding and common
	stock equivalents		1,899		1,960		1,907		1,962
Earnings per diluted common share:
	Income from continuing operations	$	0.75	$	0.85	$	1.30	$	2.03
	Income (loss) from discontinued operations		—		—		—		—
	Earnings per diluted common share	$	0.75	$	0.85	$	1.30	$	2.03

_____________

(1) Restricted stock units (“RSUs”) that are considered participating securities are treated as a separate class of securities in the computation of basic EPS, and, therefore, such RSUs are not included as incremental shares in the diluted EPS computations. The diluted EPS computations also do not include weighted average antidilutive RSUs and antidilutive stock options of 14 million shares and 12 million shares for the current quarter and prior year quarter, respectively, and 15 million shares and 12 million shares for the current year period and prior year period, respectively.

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Interest Income and Interest Expense

6 Months Ended

Jun. 30, 2016

Interest Income And Interest Expense

Interest Income And Interest Expense

16.Interest Income and Interest Expense

Interest Income and Interest Expense
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Interest income(1):
	Trading assets(2)	$	526	$	555	$	1,109	$	1,149
	Investment securities		237		238		473		438
	Loans		680		529		1,327		1,004
	Interest bearing deposits with banks		52		22		105		45
	Securities purchased under agreements to resell and Securities borrowed(3)		(120)		(200)		(198)		(305)
	Customer receivables and Other(4)		292		242		598		539
Total interest income		$	1,667	$	1,386	$	3,414	$	2,870
Interest expense(1):
	Deposits	$	15	$	17	$	37	$	35
	Short-term borrowings		7		5		14		9
	Long-term borrowings		844		915		1,804		1,841
	Securities sold under agreements to repurchase and Securities loaned(5)		259		235		513		543
	Customer payables and Other(6)		(371)		(484)		(766)		(852)
Total interest expense		$	754	$	688	$	1,602	$	1,576
Net interest		$	913	$	698	$	1,812	$	1,294

_____________

(1) Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument and related market conventions. When interest is included as a component of the instrument’s fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense.

(2) Interest expense on Trading liabilities is reported as a reduction to Interest income on Trading assets.

(3) Includes fees paid on Securities borrowed.

(4) Includes interest from customer receivables and other interest earning assets.

(5) Includes fees received on Securities loaned.

(6) Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2016

Employee Benefit Plans

Employee Benefit Plans

17.Employee Benefit Plans

The Firm sponsors various retirement plans for the majority of its U.S. and non-U.S. employees. The Firm provides certain other postretirement benefits, primarily health care and life insurance, to eligible U.S. employees.

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Service cost, benefits earned during the period		$	4	$	5	$	8	$	10
Interest cost on projected benefit obligation			39		38		77		77
Expected return on plan assets			(30)		(29)		(60)		(59)
Net amortization of prior service credit			(5)		(5)		(9)		(10)
Net amortization of actuarial loss			3		7		6		13
	Net periodic benefit expense	$	11	$	16	$	22	$	31

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Taxes

Income Taxes

18.Income Taxes

The Firm is under continuous examination by the Internal Revenue Service (the “IRS”) and other tax authorities in certain countries, such as Japan and the United Kingdom (“U.K.”), and in states in which it has significant business operations, such as New York. The Firm is currently at various levels of field examination with respect to audits by the IRS, as well as New York State and New York City, for tax years 2009-2012 and 2007-2009, respectively. The Firm believes that the resolution of these tax matters will not have a material effect in the consolidated balance sheets, although a resolution could have a material impact in the consolidated statements of income for a particular future period and on the effective tax rate for any period in which such resolution occurs.

In April 2016, the Firm received a notification from the IRS that the Congressional Joint Committee on Taxation approved the final report of an Appeals Office review of matters from tax years 1999-2005, and the Revenue Agent’s Report reflecting agreed closure of the 2006-2008 tax years. The Firm has reserved the right to contest certain items,associated with tax years 1999-2005, the resolution of which is not expected to have a material impact on the effective tax rate or the consolidated financial statements.

During 2016, the Firm expects to reach a conclusion with the U.K. tax authorities on substantially all issues through tax year 2010, the resolution of which is not expected to have a material impact on the effective tax rate or the consolidated financial statements.

The Firm has established a liability for unrecognized tax benefits that it believes is adequate in relation to the potential for additional assessments. Once established, the Firm adjusts liabilities for unrecognized tax benefits only when more information is available or when an event occurs necessitating a change.

It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months related to certain tax authority examinations referred to herein. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Firm’s effective tax rate over the next 12 months.

The Firm’s effective tax rate from continuing operations for the prior year period included a net discrete tax benefit of $564 million. This net discrete tax benefit was primarily associated with the repatriation of non-U.S. earnings at a cost lower than originally estimated due to an internal restructuring to simplify the Firm’s legal entity organization in the U.K.

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Segment and Geographic Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment And Geographic Information

19.Segment and Geographic Information

Segment Information

For a discussion about the Firm’s business segments, see Note 21 to the consolidated financial statements in the 2015 Form 10-K.

Selected Financial Information
				Three Months Ended June 30, 2016
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	4,496	$	2,982	$	581	$	(63)	$	7,996
Interest income				966		920		3		(222)		1,667
Interest expense				884		91		1		(222)		754
	Net interest			82		829		2		—		913
		Net revenues	$	4,578	$	3,811	$	583	$	(63)	$	8,909
Income from continuing operations before income taxes			$	1,506	$	859	$	118	$	—	$	2,483
Provision for income taxes				453		343		37		—		833
Income from continuing operations				1,053		516		81		—		1,650
Income (loss) from discontinued operations, net of
	income taxes			(4)		—		—		—		(4)
Net income				1,049		516		81		—		1,646
	Net income applicable to noncontrolling interests			61		—		3		—		64
Net income applicable to Morgan Stanley			$	988	$	516	$	78	$	—	$	1,582

				Three Months Ended June 30, 2015
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	5,205	$	3,138	$	757	$	(55)	$	9,045
Interest income				723		782		—		(119)		1,386
Interest expense				756		45		6		(119)		688
	Net interest			(33)		737		(6)		—		698
		Net revenues	$	5,172	$	3,875	$	751	$	(55)	$	9,743
Income from continuing operations before income taxes			$	1,622	$	885	$	220	$	—	$	2,727
Provision for income taxes				511		324		59		—		894
Income from continuing operations				1,111		561		161		—		1,833
Income (loss) from discontinued operations, net of
	income taxes			(2)		—		—		—		(2)
Net income				1,109		561		161		—		1,831
	Net income applicable to noncontrolling interests			22		—		2		—		24
Net income applicable to Morgan Stanley			$	1,087	$	561	$	159	$	—	$	1,807

				Six Months Ended June 30, 2016
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	8,141	$	5,819	$	1,059	$	(130)	$	14,889
Interest income				2,019		1,834		4		(443)		3,414
Interest expense				1,868		174		3		(443)		1,602
	Net interest			151		1,660		1		—		1,812
		Net revenues	$	8,292	$	7,479	$	1,060	$	(130)	$	16,701
Income from continuing operations before income taxes			$	2,414	$	1,645	$	162	$	—	$	4,221
Provision for income taxes				728		636		47		—		1,411
Income from continuing operations				1,686		1,009		115		—		2,810
Income (loss) from discontinued operations, net of
	income taxes			(7)		—		—		—		(7)
Net income				1,679		1,009		115		—		2,803
	Net income applicable to noncontrolling interests			100		—		(13)		—		87
Net income applicable to Morgan Stanley			$	1,579	$	1,009	$	128	$	—	$	2,716

				Six Months Ended June 30, 2015
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	10,751	$	6,283	$	1,431	$	(109)	$	18,356
Interest income				1,593		1,519		1		(243)		2,870
Interest expense				1,714		93		12		(243)		1,576
	Net interest			(121)		1,426		(11)		—		1,294
		Net revenues	$	10,630	$	7,709	$	1,420	$	(109)	$	19,650
Income from continuing operations before income taxes			$	3,435	$	1,740	$	407	$	—	$	5,582
Provision for income taxes(4)				517		644		120		—		1,281
Income from continuing operations				2,918		1,096		287		—		4,301
Income (loss) from discontinued operations, net of
	income taxes			(7)		—		—		—		(7)
Net income				2,911		1,096		287		—		4,294
	Net income applicable to noncontrolling interests			74		—		19		—		93
Net income applicable to Morgan Stanley			$	2,837	$	1,096	$	268	$	—	$	4,201

(1) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, for the current quarter and current year period DVA gains (losses) are recorded within OCI when unrealized and in Trading revenues when realized. In the prior year quarter and prior year period, the realized and unrealized DVA gains (losses) are recorded in Trading revenues. See Notes 2 and 14 for further information.

(2) In certain management fee arrangements, the Firm is entitled to receive performance-based fees (also referred to as incentive fees and includes carried interest) when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, performance fee revenues are accrued (or reversed) quarterly based on measuring account/fund performance to date versus the performance benchmark stated in the investment management agreement. The Firm’s portion of unrealized cumulative amount of performance-based fee revenue (for which the Firm is not obligated to pay compensation) at risk of reversing if fund performance falls below stated investment management agreement benchmarks was approximately $421 million and $422 million at June 30,2016and December 31, 2015, respectively. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

(3) The Firm waives a portion of its fees from certain registered money market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940. These fee waivers resulted in a reduction of fees of approximately $12 million and $50 millionfor the current quarter and prior year quarter, respectively, and $35 million and $100 million for the current year period and prior year period, respectively.

(4) The Firm’s effective tax rate from continuing operations for the prior year period included a net discrete tax benefit of $564 million, within Institutional Securities (see Note 18).

Total Assets by Business Segment
		At June 30,		At December 31,
		2016		2015
		(dollars in millions)
Institutional Securities	$	641,373	$	602,714
Wealth Management		182,801		179,708
Investment Management		4,699		5,043
Total(1)	$	828,873	$	787,465
(1) Corporate assets have been fully allocated to the business segments.

Geographic Information

For a discussion about the Firm’s geographic net revenues, see Note 21 to the consolidated financial statements in the 2015 Form 10-K.

Net Revenues by Region
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Americas		$	6,538	$	6,777	$	12,290	$	13,707
EMEA			1,312		1,436		2,441		3,198
Asia-Pacific			1,059		1,530		1,970		2,745
	Net revenues	$	8,909	$	9,743	$	16,701	$	19,650

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Subsequent Events

6 Months Ended

Jun. 30, 2016

Subsequent Events

Subsequent Events

20.Subsequent Events

The Firm has evaluated subsequent events for adjustment to or disclosure in the consolidated financial statements through the date of this report and has not identified any recordable or disclosable events, not otherwise reported in these consolidated financial statements or the notes thereto, except for the following:

Common Stock Dividend

On July 20, 2016, the Firm announced that its Board of Directors declared a quarterly dividend per common share of $0.20. The dividend is payable on August 15, 2016 to common shareholders of record on July 29, 2016.

Long-Term Borrowings

Subsequent to June 30, 2016 and through July 29, 2016, long-term borrowings increased by approximately $3.4 billion, net of redemptions.This amount includes the issuance of $3.0 billion of senior debt on July25, 2016.

Trust Preferred Securities

On July 19, 2016, the Firm announced that Morgan Stanley Capital Trust III, Morgan Stanley Capital Trust IV and Morgan Stanley Capital Trust V will redeem all of their issued and outstanding Capital Securities on August 18, 2016, and that Morgan Stanley Capital Trust VIII will redeem all of its issued and outstanding Capital Securities on August 3, 2016, pursuant to the optional redemption provisions provided in the respective governing documents. In the aggregate, $2.8 billion will be redeemed. The Firm will concurrently redeem the related underlying junior subordinated debentures.

.

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Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2016

Summary of Significant Accounting Policies

Accounting Standard Adopted

Accounting Standards Adopted

The Firm adopted the following accounting updates as of January 1, 2016.

• Recognition and Measurement of Financial Assets and Financial Liabilities.In January 2016, the Financial Accounting Standards Board (the “FASB”) issued an accounting update that changes the requirements for the recognition and measurement of certain financial assets and financial liabilities. The Firm early adopted the provision in this guidance relating to liabilities measured at fair value pursuant to a fair value option election that requires presenting unrealized DVA in Other comprehensive income (loss) (“OCI”), a change from the previous requirement to present DVA in net income. Realized DVA amounts will be recycled from AOCI to Trading revenues. DVA amounts from periods prior to adoption remain in Trading revenues as previously reported. A cumulative catch up adjustment, net of noncontrolling interests and tax, of $312 million was recorded as of January 1, 2016 to move the cumulative DVA loss amount from Retained earnings into AOCI.

Other provisions of this rule may not be early adopted and will be effective January 1, 2018, and are not expected to have a material impact on the consolidated financial statements.

• Amendments to the Consolidation Analysis.In February 2015, the FASB issued an accounting update that provides a new consolidation model for certain entities, such as investment funds and limited partnerships. The adoption on January 1, 2016, increased total assets by $131 million, reflecting consolidations of $206 million net of deconsolidations of $75 million. The consolidations resulted primarily from certain funds in Investment Management where the Firm acts as a general partner.

• Simplifying the Presentation of Debt Issuance Costs.In April 2015, the FASB issued an accounting update that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, instead of as an asset as was previously required. This guidance became effective for the Firm beginning January 1, 2016 and did not have a material impact in the consolidated financial statements.

The Firm adopted the following accounting updates as of January 1, 2016, which did not have an impact in the consolidated financial statements.

• Simplifying the Accounting for Measurement-Period Adjustments.

• Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity.

• Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity.

• Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.

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Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
				Level 1			Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at June 30, 2016
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. government and agency securities:
		U.S. Treasury securities		$	24,565	$	—	$	—	$	—	$	24,565
		U.S. agency securities			795		22,085		20		—		22,900
			Total U.S. government and agency securities		25,360		22,085		20		—		47,465
	Other sovereign government obligations				20,942		6,607		2		—		27,551
	Corporate and other debt:
		State and municipal securities			—		1,943		10		—		1,953
		Residential mortgage-backed securities			—		586		216		—		802
		Commercial mortgage-backed securities			—		961		51		—		1,012
		Asset-backed securities			—		142		88		—		230
		Corporate bonds			—		11,751		276		—		12,027
		Collateralized debt and loan obligations			—		443		109		—		552
		Loans and lending commitments(1)			—		3,879		5,418		—		9,297
		Other debt			—		827		528		—		1,355
			Total corporate and other debt		—		20,532		6,696		—		27,228
	Corporate equities(2)				100,018		367		572		—		100,957
	Securities received as collateral				10,121		7		—		—		10,128
	Derivative and other contracts:
		Interest rate contracts			791		462,243		540		—		463,574
		Credit contracts			—		16,157		304		—		16,461
		Foreign exchange contracts			140		76,264		101		—		76,505
		Equity contracts			1,368		40,524		637		—		42,529
		Commodity contracts			2,847		8,605		4,057		—		15,509
		Other			—		16		—		—		16
		Netting(3)			(4,184)		(505,871)		(2,537)		(63,844)		(576,436)
			Total derivative and other contracts		962		97,938		3,102		(63,844)		38,158
	Investments(4):
		Principal investments			21		19		769		—		809
		Other			295		559		205		—		1,059
			Total investments		316		578		974		—		1,868
	Physical commodities				—		193		—		—		193
		Total trading assets(4)			157,719		148,307		11,366		(63,844)		253,548
AFS securities					31,062		36,664		—		—		67,726
Securities purchased under agreements to resell					—		555		—		—		555
Intangible assets					—		3		—		—		3
Total assets measured at fair value				$	188,781	$	185,529	$	11,366	$	(63,844)	$	321,832
Liabilities at Fair Value
Deposits				$	—	$	65	$	30	$	—	$	95
Short-term borrowings					—		511		—		—		511
Trading liabilities:
	U.S. government and agency securities:
		U.S. Treasury securities			12,983		—		—		—		12,983
		U.S. agency securities			358		111		—		—		469
			Total U.S. government and agency securities		13,341		111		—		—		13,452
	Other sovereign government obligations				15,885		2,668		—		—		18,553
	Corporate and other debt:
		State and municipal securities			—		3		—		—		3
		Asset-backed securities			—		449		—		—		449
		Corporate bonds			—		5,578		6		—		5,584
		Other debt			—		15		3		—		18
			Total corporate and other debt		—		6,045		9		—		6,054
	Corporate equities(2)				46,440		76		26		—		46,542
	Obligation to return securities received as collateral				18,731		7		—		—		18,738
	Derivative and other contracts:
		Interest rate contracts			969		436,022		775		—		437,766
		Credit contracts			—		16,403		1,418		—		17,821
		Foreign exchange contracts			82		78,441		102		—		78,625
		Equity contracts			1,262		43,177		2,110		—		46,549
		Commodity contracts			2,368		7,652		2,759		—		12,779
		Other			—		91		11		—		102
		Netting(3)			(4,184)		(505,871)		(2,537)		(43,727)		(556,319)
			Total derivative and other contracts		497		75,915		4,638		(43,727)		37,323
		Total trading liabilities			94,894		84,822		4,673		(43,727)		140,662
Securities sold under agreements to repurchase					—		549		150		—		699
Other secured financings					—		2,480		441		—		2,921
Long-term borrowings					44		35,831		1,929		—		37,804
Total liabilities measured at fair value				$	94,938	$	124,258	$	7,223	$	(43,727)	$	182,692

					Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting		Balance at December 31, 2015
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. government and agency securities:
		U.S. Treasury securities		$	17,658	$	—	$	—	$	—	$	17,658
		U.S. agency securities			797		17,886		—		—		18,683
			Total U.S. government and agency securities		18,455		17,886		—		—		36,341
	Other sovereign government obligations				13,559		7,400		4		—		20,963
	Corporate and other debt:
		State and municipal securities			—		1,651		19		—		1,670
		Residential mortgage-backed securities			—		1,456		341		—		1,797
		Commercial mortgage-backed securities			—		1,520		72		—		1,592
		Asset-backed securities			—		494		25		—		519
		Corporate bonds			—		9,959		267		—		10,226
		Collateralized debt and loan obligations			—		284		430		—		714
		Loans and lending commitments(1)			—		4,682		5,936		—		10,618
		Other debt			—		2,263		448		—		2,711
			Total corporate and other debt		—		22,309		7,538		—		29,847
	Corporate equities(2)				106,296		379		433		—		107,108
	Securities received as collateral				11,221		3		1		—		11,225
	Derivative and other contracts:
		Interest rate contracts			406		323,586		2,052		—		326,044
		Credit contracts			—		22,258		661		—		22,919
		Foreign exchange contracts			55		64,608		292		—		64,955
		Equity contracts			653		38,552		1,084		—		40,289
		Commodity contracts			3,140		10,654		3,358		—		17,152
		Other			—		219		—		—		219
		Netting(3)			(3,840)		(380,443)		(3,120)		(55,562)		(442,965)
			Total derivative and other contracts		414		79,434		4,327		(55,562)		28,613
	Investments(4):
		Principal investments			20		44		486		—		550
		Other			163		310		221		—		694
			Total investments		183		354		707		—		1,244
	Physical commodities				—		321		—		—		321
		Total trading assets(4)			150,128		128,086		13,010		(55,562)		235,662
AFS securities					34,351		32,408		—		—		66,759
Securities purchased under agreements to resell					—		806		—		—		806
Intangible assets					—		—		5		—		5
Total assets measured at fair value				$	184,479	$	161,300	$	13,015	$	(55,562)	$	303,232
Liabilities at Fair Value
Deposits				$	—	$	106	$	19	$	—	$	125
Short-term borrowings					—		1,647		1		—		1,648
Trading liabilities:
	U.S. government and agency securities:
		U.S. Treasury securities			12,932		—		—		—		12,932
		U.S. agency securities			854		127		—		—		981
			Total U.S. government and agency securities		13,786		127		—		—		13,913
	Other sovereign government obligations				10,970		2,558		—		—		13,528
	Corporate and other debt:
		Commercial mortgage-backed securities			—		2		—		—		2
		Corporate bonds			—		5,035		—		—		5,035
		Lending commitments			—		3		—		—		3
		Other debt			—		5		4		—		9
			Total corporate and other debt		—		5,045		4		—		5,049
	Corporate equities(2)				47,123		35		17		—		47,175
	Obligation to return securities received as collateral				19,312		3		1		—		19,316
	Derivative and other contracts:
		Interest rate contracts			466		305,151		1,792		—		307,409
		Credit contracts			—		22,160		1,505		—		23,665
		Foreign exchange contracts			22		65,177		151		—		65,350
		Equity contracts			570		42,447		3,115		—		46,132
		Commodity contracts			3,012		9,431		2,308		—		14,751
		Other			—		43		—		—		43
		Netting(3)			(3,840)		(380,443)		(3,120)		(40,473)		(427,876)
			Total derivative and other contracts		230		63,966		5,751		(40,473)		29,474
		Total trading liabilities			91,421		71,734		5,773		(40,473)		128,455
Securities sold under agreements to repurchase					—		532		151		—		683
Other secured financings					—		2,393		461		—		2,854
Long-term borrowings					—		31,058		1,987		—		33,045
Total liabilities measured at fair value				$	91,421	$	107,470	$	8,392	$	(40,473)	$	166,810

_____________

AFS—Available for sale

(1)At June 30,2016, Loans and lending commitments held at fair value consisted of $7,114million of corporate loans, $1,721million of residential real estate loans and $462million of wholesale real estate loans. At December 31, 2015, Loans and lending commitments held at fair value consisted of $7,286 million of corporate loans, $1,885 million of residential real estate loans and $1,447 million of wholesale real estate loans.

(2)For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes.

(3) For positions with the same counterparty that cross over the levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Counterparty and Cash Collateral Netting.” For contracts with the same counterparty, counterparty netting among positions classified within the same level is included within that shared level. For further information on derivative instruments and hedging activities, see Note 4.

(4)Amounts exclude certain investments that are measured at fair value using the net asset value (“NAV”) per share, which are not classified in the fair value hierarchy. At June 30,2016and December 31, 2015, the fair value of these investments was $3,246 million and $3,843 million, respectively. For additional disclosure about such investments, see “Fair Value of Investments Measured at Net Asset Value” herein.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

Roll-forward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis
					Beginning Balance at March 31, 2016		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2016		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2016
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	8	$	—	$	—	$	(18)	$	—	$	—	$	30	$	20	$	—
	Other sovereign government obligations				8		—		—		(3)		—		—		(3)		2		—
	Corporate and other debt:
		State and municipal securities			5		1		4		—		—		—		—		10		2
		Residential mortgage-backed securities			292		3		—		(82)		—		—		3		216		(5)
		Commercial mortgage-backed securities			59		(3)		1		(4)		—		—		(2)		51		(5)
		Asset-backed securities			4		(4)		6		(1)		—		—		83		88		(4)
		Corporate bonds			224		17		116		(35)		—		—		(46)		276		17
		Collateralized debt and loan obligations			348		18		3		(178)		—		—		(82)		109		18
		Loans and lending commitments			6,185		(46)		360		(484)		—		(596)		(1)		5,418		(55)
		Other debt			527		4		13		(19)		—		—		3		528		2
			Total corporate and other debt		7,644		(10)		503		(803)		—		(596)		(42)		6,696		(30)
	Corporate equities				430		(63)		273		(82)		—		—		14		572		(63)
	Net derivative and other contracts(2):
		Interest rate contracts			169		(159)		2		—		(7)		42		(282)		(235)		(157)
		Credit contracts			(723)		65		1		—		—		93		(550)		(1,114)		53
		Foreign exchange contracts			126		(58)		—		—		—		(94)		25		(1)		(47)
		Equity contracts			(1,832)		168		50		—		(140)		263		18		(1,473)		(106)
		Commodity contracts			1,200		211		5		—		(4)		(88)		(26)		1,298		130
		Other			—		—		—		—		—		—		(11)		(11)		—
			Total net derivative and other
			contracts		(1,060)		227		58		—		(151)		216		(826)		(1,536)		(127)
	Investments:
		Principal investments			743		4		33		(11)		—		—		—		769		6
		Other			179		1		25		—		—		—		—		205		1
			Total investments		922		5		58		(11)		—		—		—		974		7
Intangible assets					4		—		—		—		—		—		(4)		—		—
Liabilities at Fair Value
Deposits				$	23	$	(1)	$	—	$	—	$	8	$	—	$	(2)	$	30	$	(1)
Trading liabilities:
	Corporate and other debt:
		Corporate bonds			6		(1)		(5)		29		—		—		(25)		6		(1)
		Lending commitments			1		1		—		—		—		—		—		—		—
		Other debt			4		—		(1)		—		—		—		—		3		—
			Total corporate and other debt		11		—		(6)		29		—		—		(25)		9		(1)
	Corporate equities				31		(28)		(33)		5		—		—		(5)		26		—
	Obligation to return securities received
		as collateral			1		—		(1)		—		—		—		—		—		—
Securities sold under agreements to repurchase					151		1		—		—		—		—		—		150		1
Other secured financings					454		(14)		—		—		23		(22)		(28)		441		(14)
Long-term borrowings					1,798		21		—		—		164		(131)		119		1,929		26

					Beginning Balance at December 31, 2015		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2016		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2016
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	—	$	1	$	—	$	(19)	$	—	$	—	$	38	$	20	$	1
	Other sovereign government obligations				4		—		—		(5)		—		—		3		2		1
	Corporate and other debt:
		State and municipal securities			19		1		4		(15)		—		—		1		10		1
		Residential mortgage-backed securities			341		(19)		19		(133)		—		—		8		216		(14)
		Commercial mortgage-backed securities			72		(10)		—		(19)		—		—		8		51		(11)
		Asset-backed securities			25		(7)		7		(18)		—		—		81		88		(8)
		Corporate bonds			267		62		113		(128)		—		—		(38)		276		61
		Collateralized debt and loan obligations			430		5		22		(224)		—		—		(124)		109		17
		Loans and lending commitments			5,936		(111)		970		(720)		—		(672)		15		5,418		(121)
		Other debt			448		(2)		133		(63)		—		—		12		528		(2)
			Total corporate and other debt		7,538		(81)		1,268		(1,320)		—		(672)		(37)		6,696		(77)
	Corporate equities				433		(45)		296		(119)		—		—		7		572		(64)
	Securities received as collateral				1		—		—		(1)		—		—		—		—		—
	Net derivative and other contracts(2):
		Interest rate contracts			260		305		3		—		(21)		(60)		(722)		(235)		205
		Credit contracts			(844)		(343)		1		—		—		153		(81)		(1,114)		(360)
		Foreign exchange contracts			141		(109)		—		—		—		(201)		168		(1)		(82)
		Equity contracts			(2,031)		(321)		71		—		(184)		1,121		(129)		(1,473)		(434)
		Commodity contracts			1,050		297		7		—		(4)		(176)		124		1,298		210
		Other			—		—		—		—		—		—		(11)		(11)		—
			Total net derivative and other
			contracts		(1,424)		(171)		82		—		(209)		837		(651)		(1,536)		(461)
	Investments:
		Principal investments			486		(39)		403		(40)		—		(41)		—		769		(37)
		Other			221		(17)		1		—		—		—		—		205		(16)
			Total investments		707		(56)		404		(40)		—		(41)		—		974		(53)
Intangible assets					5		—		—		—		—		—		(5)		—		—
Liabilities at Fair Value
Deposits				$	19	$	(2)	$	—	$	—	$	13	$	—	$	(4)	$	30	$	(2)
Short-term borrowings					1		—		—		—		—		(1)		—		—		—
Trading liabilities:
	Corporate and other debt:
		Corporate bonds			—		(5)		(7)		10		—		—		(2)		6		(5)
		Other debt			4		2		(3)		4		—		—		—		3		2
			Total corporate and other debt		4		(3)		(10)		14		—		—		(2)		9		(3)
	Corporate equities				17		(3)		(22)		18		—		—		10		26		(3)
	Obligation to return securities received
		as collateral			1		—		(1)		—		—		—		—		—		—
Securities sold under agreements to repurchase					151		1		—		—		—		—		—		150		1
Other secured financings					461		(32)		—		—		69		(43)		(78)		441		(32)
Long-term borrowings					1,987		(12)		—		—		276		(167)		(179)		1,929		(6)

					Beginning Balance at March 31, 2015		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2015		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2015
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	—	$	—	$	—	$	(3)	$	—	$	—	$	6	$	3	$	—
	Other sovereign government obligations				11		—		5		(1)		—		—		(3)		12		—
	Corporate and other debt:
		State and municipal securities			—		1		4		(9)		—		—		11		7		1
		Residential mortgage-backed securities			296		2		138		(32)		—		—		(26)		378		2
		Commercial mortgage-backed securities			180		(4)		5		(9)		—		—		(88)		84		(5)
		Asset-backed securities			67		5		11		(64)		—		—		—		19		1
		Corporate bonds			424		(4)		228		(150)		—		(2)		(17)		479		(16)
		Collateralized debt and loan obligations			822		68		300		(439)		—		(78)		(13)		660		(10)
		Loans and lending commitments			4,789		31		1,615		(351)		—		(491)		(81)		5,512		26
		Other debt			486		(1)		130		(51)		—		—		—		564		(1)
			Total corporate and other debt		7,064		98		2,431		(1,105)		—		(571)		(214)		7,703		(2)
	Corporate equities				230		38		266		(92)		—		—		44		486		26
	Securities received as collateral				33		—		—		(30)		—		—		—		3		—
	Net derivative and other contracts(2):
		Interest rate contracts			(496)		95		4		—		(13)		14		160		(236)		135
		Credit contracts			(984)		(24)		4		—		(24)		23		16		(989)		(29)
		Foreign exchange contracts			297		57		—		—		(1)		43		50		446		82
		Equity contracts			(2,472)		(23)		39		—		(54)		206		202		(2,102)		(161)
		Commodity contracts			1,345		4		2		—		(112)		(34)		—		1,205		(27)
			Total net derivative and other contracts		(2,310)		109		49		—		(204)		252		428		(1,676)		—
	Investments:
		Principal investments			829		(21)		5		(12)		—		(205)		(15)		581		(21)
		Other			391		(4)		—		—		—		—		(87)		300		—
			Total investments		1,220		(25)		5		(12)		—		(205)		(102)		881		(21)
Intangible assets					5		1		—		—		—		—		—		6		1
Liabilities at Fair Value
Trading liabilities:
	Corporate and other debt:
		Corporate bonds		$	23	$	—	$	(21)	$	15	$	—	$	—	$	(2)	$	15	$	—
		Other debt			23		—		—		10		—		(29)		—		4		—
	Total corporate and other debt				46		—		(21)		25		—		(29)		(2)		19		—
	Corporate equities				50		240		(49)		2		—		—		349		112		240
	Obligation to return securities received
		as collateral			33		—		(30)		—		—		—		—		3		—
Securities sold under agreements to repurchase					154		—		—		—		—		—		—		154		—
Other secured financings					133		2		—		—		37		—		—		168		2
Long-term borrowings					1,738		51		—		—		549		(88)		73		2,221		51

					Beginning Balance at December 31, 2014		Total Realized and Unrealized Gains (Losses)		Purchases (1)		Sales		Issuances		Settlements		Net Transfers		Ending Balance at June 30, 2015		Unrealized Gains (Losses) for Level 3 Assets/ Liabilities Outstanding at June 30, 2015
					(dollars in millions)
Assets at Fair Value
Trading assets:
	U.S. agency securities			$	—	$	—	$	3	$	—	$	—	$	—	$	—	$	3	$	—
	Other sovereign government obligations				41		1		6		(32)		—		—		(4)		12		1
	Corporate and other debt:
		State and municipal securities			—		1		4		—		—		—		2		7		1
		Residential mortgage-backed securities			175		21		163		(51)		—		—		70		378		12
		Commercial mortgage-backed securities			96		(6)		16		(22)		—		—		—		84		(9)
		Asset-backed securities			76		(4)		11		(29)		—		—		(35)		19		2
		Corporate bonds			386		10		213		(126)		—		(1)		(3)		479		9
		Collateralized debt and loan obligations			1,152		145		404		(682)		—		(331)		(28)		660		(6)
		Loans and lending commitments			5,874		35		2,082		(209)		—		(2,078)		(192)		5,512		30
		Other debt			285		(8)		12		—		—		(1)		276		564		6
			Total corporate and other debt		8,044		194		2,905		(1,119)		—		(2,411)		90		7,703		45
	Corporate equities				272		64		260		(147)		—		—		37		486		49
	Securities received as collateral				—		—		3		—		—		—		—		3		—
	Net derivative and other contracts(2):
		Interest rate contracts			(173)		188		9		—		(20)		124		(364)		(236)		197
		Credit contracts			(743)		(276)		17		—		(54)		31		36		(989)		(284)
		Foreign exchange contracts			151		121		—		—		(1)		144		31		446		120
		Equity contracts			(2,165)		(73)		69		—		(225)		156		136		(2,102)		(160)
		Commodity contracts			1,146		299		3		—		(112)		(72)		(59)		1,205		234
			Total net derivative and other contracts		(1,784)		259		98		—		(412)		383		(220)		(1,676)		107
	Investments:
		Principal investments			835		(4)		15		(46)		—		(205)		(14)		581		(26)
		Other			323		(16)		2		(6)		—		—		(3)		300		(12)
			Total investments		1,158		(20)		17		(52)		—		(205)		(17)		881		(38)
Intangible assets					6		1		—		—		—		(1)		—		6		1
Liabilities at Fair Value
Trading liabilities:
	Corporate and other debt:
		Corporate bonds		$	78	$	(2)	$	(12)	$	14	$	—	$	—	$	(67)	$	15	$	(2)
		Lending commitments			5		5		—		—		—		—		—		—		5
		Other debt			38		—		—		6		—		(39)		(1)		4		—
	Total corporate and other debt				121		3		(12)		20		—		(39)		(68)		19		3
	Corporate equities				45		19		(75)		25		—		—		136		112		20
	Obligation to return securities received
		as collateral			—		—		—		3		—		—		—		3		—
Securities sold under agreements to repurchase					153		(1)		—		—		—		—		—		154		(1)
Other secured financings					149		(6)		—		—		37		(24)		—		168		2
Long-term borrowings					1,934		65		—		—		612		(300)		40		2,221		59

___________

(1) Loan originations and consolidations of VIEs are included in purchases.

(2) Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts. For further information on derivative instruments and hedging activities, see Note 4.

Quantitative Information about and Sensitivity of Significant Unobservable Inputs used in Recurring Level 3 Fair Value Measurements

Recurring Level 3 Fair Value Measurements Valuation Techniques and Sensitivity of Unobservable Inputs
					Balance at June 30, 2016	Valuation Technique(s) /Significant Unobservable Input(s) /Sensitivity of the Fair Value to Changes in the Unobservable Inputs			Range(1)	Averages(2)
					(dollars in millions)
Assets at Fair Value
Trading assets:
	Corporate and other debt:
		Residential mortgage-backed
			securities	$	216	Comparable pricing:
							Comparable bond price / (A)		0 to 79 points	20 points
		Commercial mortgage-backed
			securities		51	Comparable pricing:
							Comparable bond price / (A)		0 to 7 points	1 point
		Asset-backed securities			88	Comparable pricing:
							Comparable bond price / (A)		45 to 55 points	46 points
		Corporate bonds			276	Comparable pricing(3):
							Comparable bond price / (A)		3 to 135 points	91 points
						Comparable pricing:
							EBITDA multiple / (A)		5 to 10 times	7 times
		Collateralized debt and loan
			obligations		109	Comparable pricing(3):
							Comparable bond price / (A)		20 to 95 points	57 points
						Correlation model:
							Credit correlation / (B)		29% to 61%	42%
		Loans and lending commitments			5,418	Corporate loan model:
							Credit spread / (C)		482 to 898 bps	596 bps
						Margin loan model(3):
							Credit spread / (C)(D)		31 to 102 bps	86 bps
							Volatility skew / (C)(D)		20% to 46%	32%
							Discount rate / (C)(D)		1% to 8%	3%
						Expected recovery:
							Asset coverage / (A)		47% to 99%	90%
						Option model:
							Volatility skew / (C)		-1%	-1%
						Comparable pricing:
							Comparable loan price / (A)		43 to 100 points	87 points
						Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		5% to 6%	6%
							Capitalization rate / (C)(D)		4% to 10%	4%
		Other debt			528	Comparable pricing:
							Comparable loan price / (A)		3 to 84 points	66 points
						Comparable pricing:
							Comparable bond price / (A)		7 points	7 points
						Option model:
							At the money volatility / (C)		16% to 53%	53%
						Margin loan model(3):
							Discount rate / (C)		1% to 2%	2%
						Discounted cash flow:
							Discount rate / (C)		10% to 13%	12%
	Corporate equities				572	Comparable pricing:
							Comparable equity price / (A)		100%	100%
	Net derivative and other contracts(4):
		Interest rate contracts			(235)	Option model(3):
							Interest rate - Foreign exchange
								correlation / (A)(D)	25% to 55%	42% / 42% (5)
							Interest rate volatility skew / (A)(D)		34% to 143%	78% / 77% (5)
							Interest rate quanto correlation / (A)(D)		-8% to 35%	2% / -7% (5)
							Interest rate curve correlation / (C)(D)		19% to 95%	71% / 76% (5)
							Interest rate curve / (C)(D)		0% to 1%	1% / 1% (5)
							Inflation volatility / (A)(D)		0% to 1%	1% / 1% (5)
							Interest rate - Inflation correlation / (A)(D)		-24% to -44%	-34% / -33% (5)
							Foreign exchange volatility skew / (C)(D)		0% to 11%	4% / 6% (5)
						Comparable pricing:
							Comparable bond price / (C)		95 to 100 points	96 points
		Credit contracts			(1,114)	Comparable pricing:
							Cash synthetic basis / (C)(D)		5 to 12 points	10 points
							Comparable bond price / (C)(D)		0 to 85 points	26 points
						Correlation model(3):
							Credit correlation / (B)		29% to 92%	49%
		Foreign exchange contracts(6)			(1)	Option model:
							Interest rate - Foreign exchange correlation /
								(A)(D)	25% to 55%	42% / 42% (5)
							Interest rate volatility skew / (A)(D)		34% to 143%	78% / 77% (5)
							Interest rate curve / (A)(D)		0%	0% / 0% (5)
							Interest rate curve correlation / (C)(D)		19% to 94%	73% / 81% (5)
		Equity contracts(6)			(1,473)	Option model:
							At the money volatility / (A)(D)		6% to 81%	35%
							Volatility skew / (A)(D)		-4% to 0%	-1%
							Equity - Equity correlation / (A)(D)		40% to 98%	79%
							Equity - Foreign exchange correlation / (C)(D)		-70% to -31%	-42%
							Equity - Interest rate correlation / (C)(D)		-7% to 50%	19% / 12% (5)
		Commodity contracts			1,298	Option model:
							Forward power price / (C)(D)		$2 to $95 per	$34 per
									megawatt hour	megawatt hour
							Commodity volatility / (C)(D)		6% to 90%	18%
							Cross commodity correlation / (C)(D)		5% to 99%	93%
	Investments:
		Principal investments			769	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		13% to 16%	15%
							Exit multiple / (A)(D)		8 to 23 times	9 times
						Market approach(3):
							EBITDA multiple / (A)(D)		6 to 25 times	12 times
							Forward capacity price / (A)(D)		$4 to $9	$7
						Comparable pricing:
							Comparable equity price / (A)		43% to 100%	82%
		Other			205	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		9%	9%
							Exit multiple / (A)(D)		13 times	13 times
						Market approach:
							EBITDA multiple / (A)(D)		6 to 13 times	12 times
						Comparable pricing(3):
							Comparable equity price / (A)		100%	100%
Liabilities at Fair Value
Securities sold under agreements
	to repurchase				150	Discounted cash flow:
							Funding spread / (A)		117 to 123 bps	120 bps
Other secured financings					441	Option model:
							Volatility skew / (C)		-1%	-1%
						Discounted cash flow(3):
							Discount rate / (C)		4%	4%
						Discounted cash flow:
							Funding spread / (A)		101 to 126 bps	114 bps
Long-term borrowings					1,929	Option model(3):
							At the money volatility / (C)(D)		6% to 48%	29%
							Volatility skew / (C)(D)		-2% to 0%	-1%
							Equity - Equity correlation / (C)(D)		50% to 98%	75%
							Equity - Foreign exchange correlation / (C)(D)		-50% to 11%	-25%
						Option model:
							Interest rate - credit spread correlation / (A)(D)		-52% to 3%	-24% / -23% (5)
							Interest rate - Foreign exchange correlation /
								(A)(D)	53%	53% / 53% (5)
							Interest rate - equity correlation / (A)(D)		7% to 44%	26% / 26% (5)
							Interest rate curve correlation / (C)(D)		40% to 87%	73% / 78% (5)
						Correlation model:
							Credit correlation / (B)		33% to 61%	44%
						Comparable pricing:
							Comparable equity price / (A)		100%	100%

						Valuation Technique(s) /
						Significant Unobservable Input(s) /
					Balance at	Sensitivity of the Fair Value to Changes
					December 31, 2015	in the Unobservable Inputs			Range(1)	Averages(2)
					(dollars in millions)
Assets at Fair Value
Trading assets:
	Corporate and other debt:
		Residential mortgage-backed
			securities	$	341	Comparable pricing:
							Comparable bond price / (A)		0 to 75 points	32 points
		Commercial mortgage-backed
			securities		72	Comparable pricing:
							Comparable bond price / (A)		0 to 9 points	2 points
		Corporate bonds			267	Comparable pricing(3):
							Comparable bond price / (A)		3 to 119 points	90 points
						Comparable pricing:
							EBITDA multiple / (A)		7 to 9 times	8 times
						Structured bond model:
							Discount rate / (C)		15%	15%
		Collateralized debt and loan
			obligations		430	Comparable pricing(3):
							Comparable bond price / (A)		47 to 103 points	67 points
						Correlation model:
							Credit correlation / (B)		39% to 60%	49%
		Loans and lending commitments			5,936	Corporate loan model:
							Credit spread / (C)		250 to 866 bps	531 bps
						Margin loan model(3):
							Credit spread / (C)(D)		62 to 499 bps	145 bps
							Volatility skew / (C)(D)		14% to 70%	33%
							Discount rate / (C)(D)		1% to 4%	2%
						Option model:
							Volatility skew / (C)		-1%	-1%
						Comparable pricing:
							Comparable loan price / (A)		35 to 100 points	88 points
						Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		6% to 8%	7%
							Capitalization rate / (C)(D)		4% to 10%	4%
		Other debt			448	Comparable pricing:
							Comparable loan price / (A)		4 to 84 points	59 points
						Comparable pricing:
							Comparable bond price / (A)		8 points	8 points
						Option model:
							At the money volatility / (C)		16% to 53%	53%
						Margin loan model(3):
							Discount rate / (C)		1%	1%
	Corporate equities				433	Comparable pricing:
							Comparable price / (A)		50% to 80%	72%
						Comparable pricing(3):
							Comparable equity price / (A)		100%	100%
						Market approach:
							EBITDA multiple / (A)		9 times	9 times
	Net derivative and other contracts(4):
		Interest rate contracts			260	Option model:
							Interest rate volatility concentration
								liquidity multiple / (C)(D)	0 to 3 times	2 times
							Interest rate - Foreign exchange
								correlation / (C)(D)	25% to 62%	43% / 43%(5)
							Interest rate volatility skew / (A)(D)		29% to 82%	43% / 40%(5)
							Interest rate quanto correlation / (A)(D)		-8% to 36%	5% / -6%(5)
							Interest rate curve correlation / (C)(D)		24% to 95%	60% / 69%(5)
							Inflation volatility / (A)(D)		58%	58% / 58%(5)
							Interest rate - Inflation correlation / (A)(D)		-41% to -39%	-41% / -41%(5)
		Credit contracts			(844)	Comparable pricing:
							Cash synthetic basis / (C)(D)		5 to 12 points	9 points
							Comparable bond price / (C)(D)		0 to 75 points	24 points
						Correlation model(3):
							Credit correlation / (B)		39% to 97%	57%
		Foreign exchange contracts(6)			141	Option model:
							Interest rate - Foreign exchange correlation
								/ (C)(D)	25% to 62%	43% / 43%(5)
						Interest rate volatility skew / (A)(D)			29% to 82%	43% / 40 %(5)
							Interest rate curve / (A)(D)		0%	0% / 0%(5)
		Equity contracts(6)			(2,031)	Option model:
							At the money volatility / (A)(D)		16% to 65%	32%
							Volatility skew / (A)(D)		-3% to 0%	-1%
							Equity - Equity correlation / (C)(D)		40% to 99%	71%
							Equity - Foreign exchange correlation / (A)(D)		-60% to -11%	-39%
							Equity - Interest rate correlation / (C)(D)		-29% to 50%	16% / 8%(5)
		Commodity contracts			1,050	Option model:
							Forward power price / (C)(D)		$3 to $91 per	$32 per
									megawatt hour	megawatt hour
							Commodity volatility / (A)(D)		10% to 92%	18%
							Cross commodity correlation / (C)(D)		43% to 99%	93%
	Investments:
		Principal investments			486	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		16%	16%
							Exit multiple / (A)(D)		8 to 14 times	9 times
							Capitalization rate / (C)(D)		5% to 9%	6%
							Equity discount rate / (C)(D)		20% to 35%	26%
						Market approach(3):
							EBITDA multiple / (A)(D)		8 to 20 times	11 times
							Forward capacity price / (A)(D)		$5 to $9	$7
						Comparable pricing:
							Comparable equity price / (A)		43% to 100%	81%
		Other			221	Discounted cash flow:
							Implied weighted average cost of capital / (C)(D)		10%	10%
							Exit multiple / (A)(D)		13 times	13 times
						Market approach:
							EBITDA multiple / (A)		7 to 14 times	12 times
						Comparable pricing(3):
							Comparable equity price / (A)		100%	100%
Liabilities at Fair Value
Securities sold under agreements
	to repurchase			$	151	Discounted cash flow:
							Funding spread / (A)		86 to 116 bps	105 bps
Other secured financings					461	Option model:
							Volatility skew / (C)		-1%	-1%
						Discounted cash flow(3):
							Discount rate / (C)		4% to 13%	4%
						Discounted cash flow:
							Funding spread / (A)		95 to 113 bps	104 bps
Long-term borrowings					1,987	Option model(3):
							At the money volatility / (C)(D)		20% to 50%	29%
							Volatility skew / (A)(D)		-1% to 0%	-1%
							Equity - Equity correlation / (A)(D)		40% to 97%	77%
							Equity - Foreign exchange correlation / (C)(D)		-70% to -11%	-39%
						Option model:
							Interest rate volatility skew / (A)(D)		50%	50%
							Equity volatility discount / (A)(D)		10%	10%
						Correlation model:
							Credit correlation / (B)		40% to 60%	52%
						Comparable pricing:
							Comparable equity price / (A)		100%	100%

________________

bps—Basis points

EBITDA—Earnings before interest, taxes, depreciation and amortization

(1) The range of significant unobservable inputs is represented in points, percentages, basis points, times or megawatt hours. Points are a percentage of par; for example, 79 points would be 79% of par. A basis point equals 1/100th of 1%; for example, 898 bps would equal 8.98%. 

(2) Amounts represent weighted averages except where simple averages and the median of the inputs are provided (see footnote 5 below). Weighted averages are calculated by weighting each input by the fair value of the respective financial instruments except for collateralized debt and loan obligations, principal investments, other debt, corporate bonds, long-term borrowings and derivative instruments where some or all inputs are weighted by risk.

(3) This is the predominant valuation technique for this major asset or liability class.

(4) Credit valuation adjustments (“CVA”) and funding valuation adjustments (“FVA”)are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Input(s) in the previous table. CVA is a Level 3 input when the underlying counterparty credit curve is unobservable. FVA is a Level 3 input in its entirety given the lack of observability of funding spreads in the principal market.

(5) The data structure of the significant unobservable inputs used in valuing interest rate contracts, foreign exchange contracts, certain equity contracts and certain long-term borrowings may be in a multi-dimensional form, such as a curve or surface, with risk distributed across the structure. Therefore, a simple average and median, together with the range of data inputs, may be more appropriate measurements than a single point weighted average.

(6) Includes derivative contracts with multiple risks (i.e., hybrid products).

Sensitivity of the fair value to changes in the unobservable inputs:

(A) Significant increase (decrease) in the unobservable input in isolation would result in a significantly higher (lower) fair value measurement.

(B) Significant changes in credit correlation may result in a significantly higher or lower fair value measurement. Increasing (decreasing) correlation drives a redistribution of risk within the capital structure such that junior tranches become less (more) risky and senior tranches become more (less) risky.

(C) Significant increase (decrease) in the unobservable input in isolation would result in a significantly lower (higher) fair value measurement.

(D) There are no predictable relationships between the significant unobservable inputs.

Fair Value of Investments that Calculate Net Asset Value

Investments in Certain Funds Measured at NAV per Share
		At June 30, 2016				At December 31, 2015
		Fair Value		Commitment		Fair Value		Commitment
	(dollars in millions)
Private equity funds	$	1,698	$	395	$	1,917	$	538
Real estate funds		1,228		111		1,337		128
Hedge funds		320		4		589		4
Total	$	3,246	$	510	$	3,843	$	670

Fair Value of Non-Redeemable Funds by Projected Distribution
			At June 30, 2016
			Private Equity		Real Estate
			Funds		Funds
			(dollars in millions)
	Less than 5 years	$	128	$	94
	5-10 years		911		669
	Over 10 years		659		465
	Total	$	1,698	$	1,228

Redemption Frequency as Percentage of Hedge Fund Fair Value
	At June 30, 2016
Hedge Funds(1)
Quarterly	55%
Every Six Months	20%
Greater than Six Months	19%
_________(1) The redemption notice period was primarily three months or greater.

Net Gains (Losses) Due to Changes in Fair Value for Items Measured at Fair Value Pursuant to the Fair Value Option Election

				Interest		Gains (Losses)
		Trading		Income		Included in
		Revenues		(Expense)		Net Revenues
		(dollars in millions)
Three Months Ended June 30, 2016
Securities purchased under agreements to resell	$	(1)	$	2	$	1
Deposits(1)		(1)		(1)		(2)
Short-term borrowings(1)		(9)		─		(9)
Securities sold under agreements to repurchase(1)		(3)		(3)		(6)
Long-term borrowings(1)		(1,289)		(130)		(1,419)
Six Months Ended June 30, 2016
Securities purchased under agreements to resell	$	(1)	$	4	$	3
Deposits(1)		(3)		(1)		(4)
Short-term borrowings(1)		36		─		36
Securities sold under agreements to repurchase(1)		(12)		(5)		(17)
Long-term borrowings(1)		(2,254)		(269)		(2,523)
Three Months Ended June 30, 2015
Securities purchased under agreements to resell	$	(2)	$	5	$	3
Short-term borrowings(2)		(2)		─		(2)
Securities sold under agreements to repurchase(2)		6		(2)		4
Long-term borrowings(2)		152		(138)		14
Six Months Ended June 30, 2015
Securities purchased under agreements to resell	$	(3)	$	5	$	2
Short-term borrowings(2)		(42)		─		(42)
Securities sold under agreements to repurchase(2)		4		(3)		1
Long-term borrowings(2)		1,089		(270)		819

• Gains (losses) are mainly attributable to changes in foreign currency rates or interest rates or movements in the reference price or index for short-term and long-term borrowings before the impact of related hedges. In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains of $225 million and $548 million are recorded within OCI in the consolidated statements of comprehensive income and not included in this table for the current quarter and current year period, respectively. See Notes 2 and 14 for further information.
• Gains (losses) recorded in Trading revenues for the prior year quarter and prior year period are attributable to DVA and the respective remainder is attributable to changes in foreign currency rates or interest rates or movements in the reference price or index for structured notes before the impact of related hedges.

Breakdown of Outstanding Short-term and Long-term Borrowings

Short-Term and Long-Term Borrowings Measured at Fair Value on a Recurring Basis
			At		At
			June 30,		December 31,
			2016		2015
Business Unit Responsible			(dollars in millions)
for Risk Management
Equity		$	19,696	$	17,789
Interest rates			16,728		14,255
Credit and foreign exchange			1,570		2,266
Commodities			321		383
	Total	$	38,315	$	34,693

Gains (Losses) Due to Changes in Instrument Specific Credit Risk

Gains (Losses) due to Changes in Instrument-Specific Credit Risk
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2016				2015				2016				2015
		Trading Revenues		OCI		Trading Revenues		OCI		Trading Revenues		OCI		Trading Revenues		OCI
		(dollars in millions)
Short-term and long-term borrowings(1)	$	─	$	226	$	182	$	─	$	41	$	545	$	307	$	─
Securities sold under agreements to repurchase(1)		─		(1)		─		─		─		3		─		─
Loans and other debt(2)		(14)		─		(6)		─		(114)		─		71		─
Lending commitments(3)		2		─		(1)		─		3		─		8		─

_____________

(1)In accordance with the early adoption of a provision of the accounting update, Recognition and Measurement of Financial Assets and Financial Liabilities, for the current quarter and current yearperiod DVA gains (losses) are recorded in OCI when unrealized and in Trading revenues when realized. In the prior year quarter and prior year period, the realized and unrealized DVA gains (losses) are recorded in Trading revenues. The cumulative impact of changes in the Firm’s DVA and the pre-tax amount recognized in AOCI is a gain of $87 million at June 30,2016. See Notes 2 and 14 for further information.

(2) Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses, such as those due to changes in interest rates.

(3) Gains (losses) on lending commitments were generally determined based on the differential between estimated expected client yields and contractual yields at each respective period-end.

Net Difference between Contractual Principal Amount and Fair Value

Net Difference of Contractual Principal Amount Over Fair Value
		At		At
		June 30,		December 31,
		2016		2015
		(dollars in millions)
Loans and other debt(1)	$	15,046	$	14,095
Loans 90 or more days past due
and/or on nonaccrual status(1)		12,867		11,651
Short-term and long-term
borrowings(2)		311		508

_____________

(1) The majority of the difference between principal and fair value amounts for loans and other debt emanates from the distressed debt trading business, which purchases distressed debt at amounts well below par.

(2) Short-term and long-term borrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in the reference price or index

Fair Value of Loans in Nonaccrual Status

Fair Value of Loans in Nonaccrual Status
		At		At
		June 30,		December 31,
		2016		2015
		(dollars in millions)
Aggregate fair value of loans in
nonaccrual status(1)	$	1,717	$	1,853

_____________

(1) Includes all loans 90 or more days past due in the amount of $514 million and $885 million at June 30, 2016 and December 31, 2015, respectively.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
						Fair Value by Level
												Total		Total
												Gains (Losses)		Gains (Losses)
				Carrying								for the		for
				Value at								Three Months Ended		Six Months Ended
				June 30,								June 30,		June 30,
				2016(1)		Level 1		Level 2		Level 3		2016(2)		2016(2)
				(dollars in millions)
Assets:
	Loans(3)		$	6,700	$	─	$	4,276	$	2,424	$	(34)	$	(131)
	Other assets—Other investments(4)			82		─		─		82		(38)		(40)
	Other assets—Premises, equipment
		and software costs(5)		─		─		─		─		(22)		(27)
Total assets			$	6,782	$	─	$	4,276	$	2,506	$	(94)	$	(198)
Liabilities:
	Other liabilities and accrued
		expenses(3)	$	402	$	─	$	331	$	71	$	13	$	24
Total liabilities			$	402	$	─	$	331	$	71	$	13	$	24

					Fair Value by Level
											Total		Total
											Gains (Losses)		Gains (Losses)
			Carrying								for the		for the
			Value at								Three Months Ended		Six Months Ended
			June 30,								June 30,		June 30,
			2015(1)		Level 1		Level 2		Level 3		2015(2)		2015(2)
			(dollars in millions)
Assets:
	Loans(3)	$	3,244	$	─	$	2,458	$	786	$	47	$	8
	Other assets—Other investments(4)		─		─		─		─		─		(2)
	Other assets—Premises, equipment
	and software costs(5)	software costs(5)	─		─		─		─		(2)		(22)
Total assets		$	3,244	$	─	$	2,458	$	786	$	45	$	(16)
Liabilities:
	Other liabilities and accrued
	expenses(3)	$	283	$	─	$	244	$	39	$	(45)		(48)
Total liabilities		$	283	$	─	$	244	$	39	$	(45)		(48)

___________________

(1) Carrying values relate only to those assets that had fair value adjustments during the current quarter and prior year quarter.

(2) Changes in the fair value of Loans and losses related to Other assets—Other investments are recorded within Other revenues in the consolidated statements of income. Losses related to Other assets—Premises, equipment and software costs are recorded within Other expenses if not held for sale and within Other revenues if held for sale. Changes in the fair value of lending commitments reported in Other liabilities and accrued expenses that are designated as held for sale are recorded within Other revenues, whereas, changes in the fair value related to held for investment lending commitments are recorded within Other expenses.

(3)Non-recurring changes in the fair value of loans and lending commitments held for investment were calculated using the value of the underlying collateral. Loans and lending commitments held for sale were calculated using recently executed transactions; market price quotations; valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and credit default swap spread levels adjusted for any basis difference between cash and derivative instruments; or default recovery analysis where such transactions and quotations are unobservable.

(4) Losses related to Other assets—Other investments were determined primarily using discounted cash flow models and methodologies that incorporate multiples of certain comparable companies.

(5) Losses related to Other assets—Premises, equipment and software costs were determined primarily using a default recovery analysis.

Financial Instruments Not Measured at Fair Value

The following tables exclude certain financial instruments such as equity method investments and all non-financial assets and liabilities such as the value of the long-term relationships with the Firm’s deposit customers.

			At June 30, 2016				Fair Value by Level
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
			(dollars in millions)
Financial Assets:
Cash and due from banks		$	27,597	$	27,597	$	27,597	$	—	$	—
Interest bearing deposits with banks			28,536		28,536		28,536		—		—
Investment securities—HTM securities			12,418		12,567		3,758		8,809		—
Securities purchased under agreements to resell			97,034		97,042		—		95,140		1,902
Securities borrowed			131,281		131,282		—		131,156		126
Customer and other receivables(1)			48,910		48,815		—		44,033		4,782
Loans(2)			93,165		94,151		—		25,289		68,862
Other assets—Cash deposited with clearing organizations or
	segregated under federal and other regulations or requirements		32,771		32,771		32,771		—		—
Financial Liabilities:
Deposits		$	152,598	$	152,788	$	—	$	152,788	$	—
Short-term borrowings			369		369		—		369		—
Securities sold under agreements to repurchase			49,629		49,692		—		48,033		1,659
Securities loaned			17,241		17,262		—		17,262		—
Other secured financings			6,980		6,991		—		5,596		1,395
Customer and other payables(1)			197,978		197,978		—		197,978		—
Long-term borrowings			125,688		127,189		—		127,189		—

			At December 31, 2015				Fair Value by Level
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
			(dollars in millions)
Financial Assets:
Cash and due from banks		$	19,827	$	19,827	$	19,827	$	—	$	—
Interest bearing deposits with banks			34,256		34,256		34,256		—		—
Investment securities—HTM securities			5,224		5,188		998		4,190		—
Securities purchased under agreements to resell			86,851		86,837		—		86,186		651
Securities borrowed			142,416		142,414		—		142,266		148
Customer and other receivables(1)			41,676		41,576		—		36,752		4,824
Loans(2)			85,759		86,423		—		19,241		67,182
Other assets—Cash deposited with clearing organizations or
	segregated under federal and other regulations or requirements		31,469		31,469		31,469		—		—
Financial Liabilities:
Deposits		$	155,909	$	156,163	$	—	$	156,163	$	—
Short-term borrowings			525		525		—		525		—
Securities sold under agreements to repurchase			36,009		36,060		—		34,150		1,910
Securities loaned			19,358		19,382		—		19,192		190
Other secured financings			6,610		6,610		—		5,333		1,277
Customer and other payables(1)			183,895		183,895		—		183,895		—
Long-term borrowings			120,723		123,219		—		123,219		—

___________________

HTM—Held to maturity

(1) Accrued interest, fees, and dividend receivables and payables where carrying value approximates fair value have been excluded.

(2) Amounts include all loans measured at fair value on a non-recurring basis

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value, Notional and Offsetting of Derivative Instruments Designated and Not Designated as Accounting Hedges by Type of Derivative Contract

Fair Value, Notional and Offsetting of Derivative Assets and Liabilities
				Derivative Assets at June 30, 2016
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	3,325	$	3,798	$	—	$	7,123	$	34,003	$	58,245	$	—	$	92,248
	Foreign exchange contracts			88		—		—		88		2,795		59		—		2,854
		Total derivatives designated as
		accounting hedges		3,413		3,798		—		7,211		36,798		58,304		—		95,102
Derivatives not designated as accounting
hedges(1):
	Interest rate contracts			287,757		168,366		328		456,451		3,940,102		6,615,199		1,636,768		12,192,069
	Credit contracts			13,734		2,727		—		16,461		434,478		133,037		—		567,515
	Foreign exchange contracts			75,891		386		140		76,417		1,851,368		16,653		21,279		1,889,300
	Equity contracts			22,043		—		20,486		42,529		341,039		—		259,453		600,492
	Commodity contracts			11,785		—		3,724		15,509		72,700		—		83,156		155,856
	Other			16		—		—		16		1,135		—		—		1,135
		Total derivatives not designated
		as accounting hedges		411,226		171,479		24,678		607,383		6,640,822		6,764,889		2,000,656		15,406,367
Total gross derivatives(2)			$	414,639	$	175,277	$	24,678	$	614,594	$	6,677,620	$	6,823,193	$	2,000,656	$	15,501,469
Amounts offset:
	Counterparty netting			(321,553)		(173,222)		(21,214)		(515,989)
	Cash collateral netting			(60,352)		(95)		—		(60,447)
		Total derivative assets at fair value
		included in Trading assets	$	32,734	$	1,960	$	3,464	$	38,158
Amounts not offset(3):
	Financial instruments collateral			(12,011)		—		—		(12,011)
	Other cash collateral			(23)		—		—		(23)
		Net exposure	$	20,700	$	1,960	$	3,464	$	26,124

				Derivative Liabilities at June 30, 2016
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	—	$	—	$	—	$	—	$	—	$	32	$	—	$	32
	Foreign exchange contracts		$	492	$	23	$	—	$	515	$	8,348	$	689	$	—	$	9,037
		Total derivatives designated as										.
		accounting hedges		492		23		—		515		8,348		721		—		9,069
Derivatives not designated as accounting
hedges(1):
	Interest rate contracts			265,270		172,084		412		437,766		3,654,941		6,558,339		760,822		10,974,102
	Credit contracts			14,888		2,933		—		17,821		489,656		115,979		—		605,635
	Foreign exchange contracts			77,614		414		82		78,110		1,837,572		15,817		10,511		1,863,900
	Equity contracts			25,633		—		20,916		46,549		342,625		—		261,986		604,611
	Commodity contracts			9,390		—		3,389		12,779		68,095		—		64,896		132,991
	Other			102		—		—		102		4,817		—		—		4,817
		Total derivatives not designated
		as accounting hedges		392,897		175,431		24,799		593,127		6,397,706		6,690,135		1,098,215		14,186,056
Total gross derivatives(2)			$	393,389	$	175,454	$	24,799	$	593,642	$	6,406,054	$	6,690,856	$	1,098,215	$	14,195,125
Amounts offset:
	Counterparty netting			(321,553)		(173,222)		(21,214)		(515,989)
	Cash collateral netting			(38,378)		(1,952)		—		(40,330)
		Total derivative liabilities at fair value
		included in Trading liabilities	$	33,458	$	280	$	3,585	$	37,323
Amounts not offset(3):
	Financial instruments collateral			(11,509)		—		(514)		(12,023)
	Other cash collateral			(10)		(41)		—		(51)
		Net exposure	$	21,939	$	239	$	3,071	$	25,249

				Derivative Assets at December 31, 2015
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	2,825	$	1,442	$	—	$	4,267	$	36,999	$	35,362	$	—	$	72,361
	Foreign exchange contracts			166		1		—		167		5,996		167		—		6,163
		Total derivatives designated as
		accounting hedges		2,991		1,443		—		4,434		42,995		35,529		—		78,524
Derivatives not designated as accounting
hedges(4):
	Interest rate contracts			220,289		101,276		212		321,777		4,348,002		5,748,525		1,218,645		11,315,172
	Credit contracts			19,310		3,609		—		22,919		585,731		139,301		—		725,032
	Foreign exchange contracts			64,438		295		55		64,788		1,907,290		13,402		7,715		1,928,407
	Equity contracts			20,212		—		20,077		40,289		316,770		—		229,859		546,629
	Commodity contracts			13,114		—		4,038		17,152		67,449		—		82,313		149,762
	Other			219		—		—		219		5,684		—		—		5,684
		Total derivatives not designated
		as accounting hedges		337,582		105,180		24,382		467,144		7,230,926		5,901,228		1,538,532		14,670,686
Total gross derivatives(2)			$	340,573	$	106,623	$	24,382	$	471,578	$	7,273,921	$	5,936,757	$	1,538,532	$	14,749,210
Amounts offset:
	Counterparty netting			(265,707)		(104,294)		(21,592)		(391,593)
	Cash collateral netting			(50,335)		(1,037)		—		(51,372)
		Total derivative assets at fair value
		included in Trading assets	$	24,531	$	1,292	$	2,790	$	28,613
Amounts not offset(3):
	Financial instruments collateral			(9,190)		—		—		(9,190)
	Other cash collateral			(9)		—		—		(9)
		Net exposure	$	15,332	$	1,292	$	2,790	$	19,414

				Derivative Liabilities at December 31, 2015
				Fair Value								Notional
				Bilateral OTC		Cleared OTC		Exchange Traded		Total		Bilateral OTC		Cleared OTC		Exchange Traded		Total
				(dollars in millions)
Derivatives designated as accounting
hedges:
	Interest rate contracts		$	20	$	250	$	—	$	270	$	3,560	$	9,869	$	—	$	13,429
	Foreign exchange contracts			56		6		—		62		4,604		455		—		5,059
		Total derivatives designated as
		accounting hedges		76		256		—		332		8,164		10,324		—		18,488
Derivatives not designated as accounting
hedges(4):
	Interest rate contracts			203,004		103,852		283		307,139		4,030,039		5,682,322		1,077,710		10,790,071
	Credit contracts			19,942		3,723		—		23,665		562,027		131,388		—		693,415
	Foreign exchange contracts			65,034		232		22		65,288		1,868,015		13,322		2,655		1,883,992
	Equity contracts			25,708		—		20,424		46,132		332,734		—		229,266		562,000
	Commodity contracts			10,864		—		3,887		14,751		59,169		—		62,974		122,143
	Other			43		—		—		43		4,114		—		—		4,114
		Total derivatives not designated
		as accounting hedges		324,595		107,807		24,616		457,018		6,856,098		5,827,032		1,372,605		14,055,735
Total gross derivatives(2)			$	324,671	$	108,063	$	24,616	$	457,350	$	6,864,262	$	5,837,356	$	1,372,605	$	14,074,223
Amounts offset:
	Counterparty netting			(265,707)		(104,294)		(21,592)		(391,593)
	Cash collateral netting			(33,332)		(2,951)		—		(36,283)
		Total derivative liabilities at fair value
		included in Trading liabilities	$	25,632	$	818	$	3,024	$	29,474
Amounts not offset(3):
	Financial instruments collateral			(5,384)		—		(405)		(5,789)
	Other cash collateral			(5)		—		—		(5)
		Net exposure	$	20,243	$	818	$	2,619	$	23,680

_____________

OTC—Over-the-counter

(1) Notional amounts include gross notionals related to open long and short futures contracts of $1,300.0 billion and $372.8 billion, respectively. The unsettled fair value on these futures contracts (excluded from this table) of $1,631 million and $153 million is included in Customer and other receivables and Customer and other payables, respectively, in the consolidated balance sheets.

(2) Amounts include transactions which are either not subject to master netting agreements or collateral agreements or are subject to such agreements but the Firm has not determined the agreements to be legally enforceable as follows: $4.8 billion of derivative assets and $6.3 billion of derivative liabilities at June 30,2016, and $4.2 billion of derivative assets and $5.2 billion of derivative liabilities at December 31,2015.

(3)Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

(4) Notional amounts include gross notionals related to open long and short futures contracts of $1,009.5 billion and $653.0 billion, respectively. The unsettled fair value on these futures contracts (excluded from this table) of $1,145 million and $437 million is included in Customer and other receivables and Customer and other payables, respectively, in the consolidated balance sheets.

Summary of Gains or Losses Reported on Derivative Instruments Designated and Not Designated as Accounting Hedges

Gains (Losses) on Fair Value Hedges
		Gains (Losses) Recognized in Interest Expense
		Three Months Ended June 30,				Six Months Ended June 30,
Product Type		2016		2015		2016		2015
		(dollars in millions)
Derivatives	$	969	$	(1,899)	$	3,119	$	(1,141)
Borrowings		(993)		1,861		(3,282)		1,018
Total	$	(24)	$	(38)	$	(163)	$	(123)

Gains (Losses) on Derivatives Designated as Net Investment Hedges
		Gains (Losses) Recognized in OCI (effective portion)
		Three Months EndedJune 30,				Six Months Ended June 30,
Product Type		2016		2015		2016		2015
		(dollars in millions)
Foreign exchange
contracts(1)	$	(112)	$	(81)	$	(336)	$	181

____________

(1) Losses of $19 million and $39 million related to the forward points on the hedging instruments were excluded from hedge effectiveness testing and recognized in Interest income during the current quarter and current year period, respectively. Losses of $36 million and $80 million related to the forward points on the hedging instruments were excluded from hedge effectiveness testing and recognized in Interest income during the prior year quarter and prior year period, respectively.

			Gains (Losses) Recognized in Trading Revenues
			Three Months Ended				Six Months Ended
			June 30,				June 30,
Product Type			2016		2015		2016		2015
			(dollars in millions)
Interest rate contracts		$	320	$	355	$	626	$	925
Foreign exchange contracts			362		170		599		515
Equity security and index contracts(1)			1,615		1,746		2,945		3,341
Commodity and other contracts(2)			20		140		(124)		816
Credit contracts			429		380		765		719
	Subtotal	$	2,746	$	2,791	$	4,811	$	6,316
Debt valuation adjustments(3)			—		182		—		307
	Total trading revenue	$	2,746	$	2,973	$	4,811	$	6,623

____________

(1) Dividend income is included within equity security and index contracts.

(2) Other contracts represent contracts not reported as interest rate, foreign exchange, equity security and index or credit contracts.

(3)In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, unrealized DVA gains (losses) in the current quarter and current yearperiod are recorded within OCI in the consolidated statements of comprehensive income. In the prior year quarter and prior year period, the DVA gains (losses) were recorded within Trading revenues in the consolidated statements of income. See Notes 2 and 14 for further information.

Summary by Counterparty Credit Rating and Remaining Contract Maturity of the Fair Value of OTC Derivatives in a Gain Position

OTC Derivative Products—Trading Assets
Counterparty Credit Rating and Remaining Maturity of OTC Derivative Assets
			Fair Value at June 30, 2016(1)
			Contractual Years to Maturity								Cross-Maturityand Cash Collateral Netting(3)		Net Exposure Post-cash Collateral		Net Exposure Post-collateral(4)
Credit Rating(2)			Less than 1		1 - 3		3 - 5		Over 5
			(dollars in millions)
AAA		$	137	$	396	$	1,312	$	4,360	$	(4,953)	$	1,252	$	1,175
AA			3,156		1,502		1,814		12,226		(12,717)		5,981		3,771
A			11,078		7,607		5,336		28,058		(38,694)		13,385		7,784
BBB			5,794		4,489		2,622		15,861		(19,993)		8,773		6,808
Non-investment grade			3,923		2,505		996		5,370		(7,514)		5,280		3,122
	Total	$	24,088	$	16,499	$	12,080	$	65,875	$	(83,871)	$	34,671	$	22,660

			Fair Value at December 31, 2015(1)
			Contractual Years to Maturity								Cross-Maturity and Cash Collateral Netting(3)		Net Exposure Post-cash Collateral		Net Exposure Post-collateral(4)
Credit Rating(2)			Less than 1		1-3		3-5		Over 5
			(dollars in millions)
AAA		$	203	$	453	$	827	$	3,665	$	(4,319)	$	829	$	715
AA			2,689		2,000		1,876		9,223		(10,981)		4,807		2,361
A			9,748		8,191		4,774		20,918		(34,916)		8,715		5,448
BBB			3,614		4,863		1,948		11,801		(15,086)		7,140		4,934
Non-investment grade			3,982		2,333		1,157		3,567		(6,716)		4,323		3,166
	Total	$	20,236	$	17,840	$	10,582	$	49,174	$	(72,018)	$	25,814	$	16,624

_____________

(1) Fair values shown represent the Firm’s net exposure to counterparties related to its OTC derivative products.

(2) Obligor credit ratings are determined by the Credit Risk Management Department.

(3) Amounts represent the netting of receivable balances with payable balances for the same counterparty across maturity categories. Receivable and payable balances with the same counterparty in the same maturity category are netted within such maturity category, where appropriate. Cash collateral received is netted on a counterparty basis, provided legal right of offset exists.

(4)Fair value is shown, net of collateral received (primarily cash and U.S. government and agency securities).

Credit Risk-Related Contingencies

Net Derivative Liabilities and Collateral Posted

		At June 30, 2016
		(dollars in millions)
Net derivative liabilities	$	28,999
Collateral posted		24,217

Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade
		At June 30, 2016(1)
		(dollars in millions)
One-notch downgrade	$	1,075
Two-notch downgrade		1,233

________

(1) Amounts include $1,481 million related to bilateral arrangements between the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firmto manage the risk of counterparty downgrades.

Disclosure of Credit Derivatives

Notional and Fair Value of Protection Sold and Protection Purchased through Credit Default Swaps
		At June 30, 2016
		Protection Sold				Protection Purchased
		Notional		Fair Value (Asset)/Liability		Notional		Fair Value (Asset)/Liability
		(dollars in millions)
Single name credit default swaps	$	347,624	$	463	$	338,727	$	(453)
Index and basket credit default swaps		176,009		726		143,734		(771)
Tranched index and basket credit default swaps		43,657		(793)		123,399		2,188
Total	$	567,290	$	396	$	605,860	$	964

		At December 31, 2015
		Protection Sold				Protection Purchased
		Notional		Fair Value (Asset)/Liability		Notional		Fair Value (Asset)/Liability
		(dollars in millions)
Single name credit default swaps	$	420,806	$	1,980	$	405,361	$	(2,079)
Index and basket credit default swaps		199,688		(102)		173,936		(82)
Tranched index and basket credit default swaps		69,025		(1,093)		149,631		2,122
Total	$	689,519	$	785	$	728,928	$	(39)

Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold

				At June 30, 2016
				Maximum Potential Payout/Notional										Fair Value(Asset)/Liability(1)
				Years to Maturity
				Less than 1		1-3		3-5		Over 5		Total
				(dollars in millions)
Single name credit default swaps(2):
	Investment grade		$	92,734	$	94,348	$	48,928	$	11,097	$	247,107	$	(1,079)
	Non-investment grade			42,370		38,348		18,381		1,418		100,517		1,542
		Total	$	135,104	$	132,696	$	67,309	$	12,515	$	347,624	$	463
Index and basket credit default swaps(2):
	Investment grade		$	24,110	$	39,948	$	42,887	$	4,060	$	111,005	$	(1,222)
	Non-investment grade			51,914		28,315		13,761		14,671		108,661		1,155
		Total	$	76,024	$	68,263	$	56,648	$	18,731	$	219,666	$	(67)
Total credit default swaps sold			$	211,128	$	200,959	$	123,957	$	31,246	$	567,290	$	396
Other credit contracts				43		25		—		276		344		(17)
Total credit derivatives and other credit
	contracts		$	211,171	$	200,984	$	123,957	$	31,522	$	567,634	$	379

				At December 31, 2015
				Maximum Potential Payout/Notional										Fair Value(Asset)/Liability(1)
				Years to Maturity
				Less than 1		1-3		3-5		Over 5		Total
				(dollars in millions)
Single name credit default swaps(2):
	Investment grade		$	84,543	$	138,467	$	63,754	$	12,906	$	299,670	$	(1,831)
	Non-investment grade			38,054		56,261		24,432		2,389		121,136		3,811
		Total	$	122,597	$	194,728	$	88,186	$	15,295	$	420,806	$	1,980
Index and basket credit default swaps(2):
	Investment grade		$	33,507	$	59,403	$	45,505	$	5,327	$	143,742	$	(1,977)
	Non-investment grade			52,590		43,899		15,480		13,002		124,971		782
		Total	$	86,097	$	103,302	$	60,985	$	18,329	$	268,713	$	(1,195)
Total credit default swaps sold			$	208,694	$	298,030	$	149,171	$	33,624	$	689,519	$	785
Other credit contracts				19		107		2		332		460		(24)
Total credit derivatives and other credit
	contracts		$	208,713	$	298,137	$	149,173	$	33,956	$	689,979	$	761

_____________

(1) Fair value amounts are shown on a gross basis prior to cash collateral or counterparty netting.

(2) In order to provide an indication of the current payment status or performance risk of the CDS, a breakdown of CDS based on the Firm’s internal credit ratings by investment grade and non-investment grade is provided.Internal credit ratings serve as the Credit Risk Management Department’s assessment of credit risk, and the basis for a comprehensive credit limits framework used to control credit risk. The Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor. Internal ratings procedures, methodologies, and models are all independently and formally governed, and models and methodologies are reviewed by a separate model risk management oversight function.

XML

Investment Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investment securities

Schedule of Investment Securities

AFS and HTM Securities
						At June 30, 2016
						Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
					(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities			$	29,923	$	213	$	8	$	30,128
		U.S. agency securities(1)				23,221		208		22		23,407
				Total U.S. government and agency securities		53,144		421		30		53,535
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency			2,139		5		31		2,113
			Non-agency			2,159		36		10		2,185
		Auto loan asset-backed securities				2,071		7		—		2,078
		Corporate bonds				4,009		66		2		4,073
		Collateralized loan obligations				502		—		7		495
		FFELP student loan asset-backed securities(2)				3,345		—		105		3,240
				Total corporate and other debt		14,225		114		155		14,184
Total AFS debt securities						67,369		535		185		67,719
AFS equity securities						15		—		8		7
Total AFS securities						67,384		535		193		67,726
HTM securities:
	U.S. government securities:
		U.S. Treasury securities				3,705		53		—		3,758
		U.S. agency securities(1)				8,713		96		—		8,809
Total HTM securities						12,418		149		—		12,567
Total Investment securities					$	79,802	$	684	$	193	$	80,293

						At December 31, 2015
						Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
					(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities			$	31,555	$	5	$	143	$	31,417
		U.S. agency securities(1)				21,103		29		156		20,976
				Total U.S. government and agency securities		52,658		34		299		52,393
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency			1,906		1		60		1,847
			Non-agency			2,220		3		25		2,198
		Auto loan asset-backed securities				2,556		—		9		2,547
		Corporate bonds				3,780		5		30		3,755
		Collateralized loan obligations				502		—		7		495
		FFELP student loan asset-backed securities(2)				3,632		—		115		3,517
				Total corporate and other debt		14,596		9		246		14,359
Total AFS debt securities						67,254		43		545		66,752
AFS equity securities						15		—		8		7
Total AFS securities						67,269		43		553		66,759
HTM securities:
	U.S. government securities:
		U.S. Treasury securities				1,001		—		3		998
		U.S. agency securities(1)				4,223		1		34		4,190
Total HTM securities						5,224		1		37		5,188
Total Investment securities					$	72,493	$	44	$	590	$	71,947

______________

• U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and collateralized mortgage obligations.
• FFELP—Federal Family Education Loan Program. Amounts are backed by a guarantee from the U.S. Department of Education of at least 95% of the principal balance and interest on such loans.

Schedule of Investment Securities in an Unrealized Loss Position

Investment Securities in an Unrealized Loss Position

					At June 30, 2016
					Less than 12 Months				12 Months or Longer				Total
					Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
				(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities		$	3,028	$	8	$	—	$	—	$	3,028	$	8
		U.S. agency securities			5,731		10		1,225		12		6,956		22
			Total U.S. government and agency securities		8,759		18		1,225		12		9,984		30
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency		31		—		1,181		31		1,212		31
			Non-agency		216		—		625		10		841		10
		Auto loan asset-backed securities			83		—		204		—		287		—
		Corporate bonds			172		1		175		1		347		2
		Collateralized loan obligations			—		—		494		7		494		7
		FFELP student loan asset-backed securities			583		12		2,637		93		3,220		105
			Total corporate and other debt		1,085		13		5,316		142		6,401		155
Total AFS debt securities					9,844		31		6,541		154		16,385		185
AFS equity securities					7		8		—		—		7		8
Total AFS securities					9,851		39		6,541		154		16,392		193
HTM securities:
	U.S. government and agency securities:
		U.S. agency securities			72		—		—		—		72		—
Total HTM securities					72		—		—		—		72		—
Total Investment securities				$	9,923	$	39	$	6,541	$	154	$	16,464	$	193

					At December 31, 2015
					Less than 12 Months				12 Months or Longer				Total
					Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
				(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities		$	25,994	$	126	$	2,177	$	17	$	28,171	$	143
		U.S. agency securities			14,242		135		639		21		14,881		156
			Total U.S. government and agency securities		40,236		261		2,816		38		43,052		299
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency		1,185		44		422		16		1,607		60
			Non-agency		1,479		21		305		4		1,784		25
		Auto loan asset-backed securities			1,644		7		881		2		2,525		9
		Corporate bonds			2,149		19		525		11		2,674		30
		Collateralized loan obligations			352		5		143		2		495		7
		FFELP student loan asset-backed securities			2,558		79		929		36		3,487		115
			Total corporate and other debt		9,367		175		3,205		71		12,572		246
Total AFS debt securities					49,603		436		6,021		109		55,624		545
AFS equity securities					7		8		—		—		7		8
Total AFS securities					49,610		444		6,021		109		55,631		553
HTM securities:
	U.S. government and agency securities:
		U.S. Treasury securities			898		3		—		—		898		3
		U.S. agency securities			3,677		34		—		—		3,677		34
Total HTM securities					4,575		37		—		—		4,575		37
Total Investment securities				$	54,185	$	481	$	6,021	$	109	$	60,206	$	590

Schedule of Amortized Cost and Fair Valueof Investment Securities by Contractual Date

Amortized Cost, Fair Value and Annualized Average Yield of Investment Securities by Contractual Maturity Dates
						At June 30, 2016
						Amortized Cost		Fair Value	Annualized Average Yield
					(dollars in millions)
AFS debt securities:
	U.S. government and agency securities:
		U.S. Treasury securities:
				Due within 1 year	$	2,698	$	2,702	0.7%
				After 1 year through 5 years		22,137		22,317	1.0%
				After 5 years through 10 years		5,088		5,109	1.4%
				Total		29,923		30,128
		U.S. agency securities:
				Due within 1 year		200		200	0.7%
				After 1 year through 5 years		2,629		2,632	0.5%
				After 5 years through 10 years		1,327		1,357	1.9%
				After 10 years		19,065		19,218	1.6%
				Total		23,221		23,407
				Total U.S. government and agency securities		53,144		53,535	1.2%
	Corporate and other debt:
		Commercial mortgage-backed securities:
			Agency:
				Due within 1 year		73		74	0.8%
				After 1 year through 5 years		404		406	1.0%
				After 5 years through 10 years		639		641	1.3%
				After 10 years		1,023		992	1.6%
				Total		2,139		2,113
			Non-agency:
				After 10 years		2,159		2,185	1.9%
				Total		2,159		2,185
		Auto loan asset-backed securities:
				Due within 1 year		4		4	0.9%
				After 1 year through 5 years		1,902		1,909	1.3%
				After 5 years through 10 years		165		165	1.6%
				Total		2,071		2,078
		Corporate bonds:
				Due within 1 year		638		640	1.3%
				After 1 year through 5 years		2,655		2,695	1.8%
				After 5 years through 10 years		716		738	2.6%
				Total		4,009		4,073
		Collateralized loan obligations:
				After 5 years through 10 years		502		495	1.5%
				Total		502		495
		FFELP student loan asset-backed securities:
				After 1 year through 5 years		59		59	0.6%
				After 5 years through 10 years		922		897	0.9%
				After 10 years		2,364		2,284	0.9%
				Total		3,345		3,240
				Total corporate and other debt		14,225		14,184	1.5%
				Total AFS debt securities		67,369		67,719	1.3%
AFS equity securities						15		7	― %
Total AFS securities						67,384		67,726	1.3%
HTM securities:
	U.S. government securities:
		U.S. Treasury securities:
				Due within 1 year		200		201	0.7%
				After 1 year through 5 years		1,408		1,422	1.1%
				After 5 years through 10 years		1,693		1,719	1.7%
				After 10 years		404		416	2.5%
				Total		3,705		3,758
		U.S. agency securities:
				After 10 years		8,713		8,809	2.0%
				Total		8,713		8,809
Total HTM securities						12,418		12,567	1.8%
Total Investment securities					$	79,802	$	80,293	1.4%

Schedule of Gross Realized Gains and Gross Realized (Losses) on Sales of AFS Securities

Gross Realized Gains and Gross Realized (Losses) on Sales of AFS Securities
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Gross realized gains		$	71	$	40	$	85	$	69
Gross realized (losses)			(1)		(10)		(3)		(14)
	Total	$	70	$	30	$	82	$	55

XML

Collateralized Transactions (Tables)

6 Months Ended

Jun. 30, 2016

Collateralized Transactions

Information of Offsetting of Assets and Liabilities

Offsetting of Certain Collateralized Transactions
		At June 30, 2016
		Gross Amounts(1)		Amounts Offset		Net Amounts Presented		Amounts Not Offset(2)		Net Exposure
		(dollars in millions)
Assets
Securities purchased under agreements to resell	$	162,813	$	(65,224)	$	97,589	$	(91,746)	$	5,843
Securities borrowed		138,436		(7,155)		131,281		(124,773)		6,508
Liabilities
Securities sold under agreements to repurchase	$	115,552	$	(65,224)	$	50,328	$	(42,541)	$	7,787
Securities loaned		24,396		(7,155)		17,241		(16,724)		517

		At December 31, 2015
		Gross Amounts(1)		Amounts Offset		Net Amounts Presented		Amounts Not Offset(2)		Net Exposure
		(dollars in millions)
Assets
Securities purchased under agreements to resell	$	135,714	$	(48,057)	$	87,657	$	(84,752)	$	2,905
Securities borrowed		147,445		(5,029)		142,416		(134,250)		8,166
Liabilities
Securities sold under agreements to repurchase	$	84,749	$	(48,057)	$	36,692	$	(31,604)	$	5,088
Securities loaned		24,387		(5,029)		19,358		(18,881)		477

_____________

(1) Amounts include transactions which are either not subject to master netting agreements or are subject to such agreements but the Firm has not determined the agreements to be legally enforceable as follows: $5.5 billion of Securities purchased under agreements to resell, $3.7 billion of Securities borrowed, $7.2 billion of Securities sold under agreements to repurchase and $0.4 billion of Securities loaned at June 30,2016, and $2.6 billion of Securities purchased under agreements to resell, $3.0 billion of Securities borrowed and $4.9 billion of Securities sold under agreements to repurchase at December 31, 2015.

(2)Amounts relate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance.

Schedule Of SecuritiesF inancing Transactions

Secured Financing Transactions—Maturities and Collateral Pledged
Gross Secured Financing Balances by Remaining Contractual Maturity
				At June 30, 2016
				Overnightand Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
				(dollars in millions)
Securities sold under agreements to repurchase(1)			$	38,732	$	30,586	$	20,309	$	25,925	$	115,552
Securities loaned(1)				13,085		50		1,336		9,925		24,396
	Gross amount of secured financing included in the
		offsetting disclosure	$	51,817	$	30,636	$	21,645	$	35,850	$	139,948
Obligation to return securities received as collateral				18,738		—		—		—		18,738
Total			$	70,555	$	30,636	$	21,645	$	35,850	$	158,686

				At December 31, 2015
				Overnightand Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
				(dollars in millions)
Securities sold under agreements to repurchase(1)			$	20,410	$	25,245	$	13,221	$	25,873	$	84,749
Securities loaned(1)				12,247		478		2,156		9,506		24,387
	Gross amount of secured financing included in the
		offsetting disclosure	$	32,657	$	25,723	$	15,377	$	35,379	$	109,136
Obligation to return securities received as collateral				19,316		—		—		—		19,316
Total			$	51,973	$	25,723	$	15,377	$	35,379	$	128,452

_____________

(1) Amounts are presented on a gross basis, prior to netting in the consolidated balance sheets.

Gross Secured Financing Balances by Class of Collateral Pledged
			At June 30, 2016		At December 31, 2015
			(dollars in millions)
Securities sold under agreements to repurchase(1)
U.S. government and agency securities		$	39,920	$	36,609
State and municipal securities			2,104		173
Other sovereign government obligations			42,329		24,820
Asset-backed securities			745		441
Corporate and other debt			8,638		4,020
Corporate equities			21,515		18,473
Other			301		213
	Total securities sold under agreements to repurchase	$	115,552	$	84,749
Securities loaned(1)
U.S. government and agency securities		$	182	$	—
Other sovereign government obligations			7,454		7,336
Corporate and other debt			123		71
Corporate equities			16,602		16,972
Other			35		8
	Total securities loaned	$	24,396	$	24,387
Gross amount of secured financing included in the offsetting disclosure		$	139,948	$	109,136
Obligation to return securities received as collateral
Corporate and other debt			—		3
Corporate equities			18,737		19,313
Other			1		—
	Total obligation to return securities received as collateral	$	18,738	$	19,316
Total		$	158,686	$	128,452

_____________

(1) Amounts are presented on a gross basis, prior to netting in the consolidated balance sheets.

Schedule of Cash and Securities Segregated under Federal and Other Regulations

Cash and Securities Deposited with Clearing Organizations or Segregated
				At June 30, 2016		At December 31, 2015
				(dollars in millions)
Securities(1)			$	23,710	$	14,390
Other assets―Cash deposited with clearing organizations or segregated under
	federal and other regulations or requirements			32,771		31,469
		Total	$	56,481	$	45,859

_____________

• Securities deposited with clearing organizations or segregated under federal and other regulations or requirements are sourced from Securities purchased under agreements to resell and Trading assets in the consolidated balance sheets.

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Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2016

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Table of Loans Outstanding

Loans Held for Investment and Held for Sale
		At June 30, 2016						At December 31, 2015
Loans by Product Type		Loans Held for Investment		Loans Held for Sale		Total Loans(1)(2)		Loans Held for Investment		Loans Held for Sale		Total Loans(1)(2)
		(dollars in millions)
Corporate loans	$	24,186	$	14,448	$	38,634	$	23,554	$	11,924	$	35,478
Consumer loans		23,337		—		23,337		21,528		—		21,528
Residential real estate loans		22,668		84		22,752		20,863		104		20,967
Wholesale real estate loans		7,415		1,350		8,765		6,839		1,172		8,011
Total loans, gross of allowance for loan losses		77,606		15,882		93,488		72,784		13,200		85,984
Allowance for loan losses		(323)		—		(323)		(225)		—		(225)
Total loans, net of allowance for loan losses	$	77,283	$	15,882	$	93,165	$	72,559	$	13,200	$	85,759

______________

• Amounts include loans that are made to non-U.S. borrowers of$8,104 million and $9,789 million at June 30,2016 and December 31, 2015, respectively.
• Loans at fixed interest rates and floating or adjustable interest rates were $10,102million and $83,063million, respectively, at June 30,2016 and $8,471million and $77,288million, respectively, at December 31, 2015.

Table of Credit Quality Indicators for Gross Loans Held-for-investment by Product Type

Credit Quality Indicators for Loans Held for Investment, Gross of Allowance for Loan Losses, by Product Type
		At June 30, 2016
		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
		(dollars in millions)
Pass	$	22,183	$	23,337	$	22,627	$	7,191	$	75,338
Special mention		539		—		—		224		763
Substandard		1,308		—		41		—		1,349
Doubtful		156		—		—		—		156
Loss		—		—		—		—		—
Total loans	$	24,186	$	23,337	$	22,668	$	7,415	$	77,606

		At December 31, 2015
		Corporate		Consumer		Residential Real Estate		Wholesale Real Estate		Total
		(dollars in millions)
Pass	$	22,040	$	21,528	$	20,828	$	6,839	$	71,235
Special mention		300		—		—		—		300
Substandard		1,202		—		35		—		1,237
Doubtful		12		—		—		—		12
Loss		—		—		—		—		—
Total loans	$	23,554	$	21,528	$	20,863	$	6,839	$	72,784

Table of Impaired Loans, Past Due Loans and Allowance for Held-for-investment Loans

Loans by Product Type
		At June 30, 2016						At December 31, 2015
		Corporate		Residential Real Estate		Total		Corporate		Residential Real Estate		Total
	(dollars in millions)
Impaired loans with allowance	$	244	$	—	$	244	$	39	$	—	$	39
Impaired loans without allowance(1)		338		30		368		89		17		106
Impaired loans unpaid principal balance(2)		593		32		625		130		19		149
Past due 90 days loans and on nonaccrual		1		20		21		1		21		22

• At June 30,2016 and December 31, 2015, no allowance was outstanding for these loans as the present value of the expected future cash flows (or, alternatively, the observable market price of the loan or the fair value of the collateral held) equaled or exceeded the carrying value.
• The impaired loans unpaid principal balance differs from the aggregate amount of impaired loan balances with and without allowance due to various factors, including charge-offs and net deferred loan fees or costs.

Loans by Region
		At June 30, 2016								At December 31, 2015
		Americas		EMEA		Asia-Pacific		Total		Americas		EMEA		Asia-Pacific		Total
	(dollars in millions)
Impaired loans	$	589	$	23	$	—	$	612	$	108	$	12	$	25	$	145
Past due 90 days loans and on nonaccrual		21		—		—		21		22		—		—		22
Allowance for loan losses		277		43		3		323		183		34		8		225

EMEA—Europe, Middle East and Africa

Loan and Lending-related Commitments by Impairment Methodology, and Their Respective Allowances

Allowance for Credit Losses on Lending Activities
			Corporate		Consumer		Residential Real Estate		Wholesale Real Estate
											Total
			(dollars in millions)
Allowance for Loan Losses
	Balance at December 31, 2015	$	166	$	5	$	17	$	37	$	225
	Gross charge-offs		—		—		—		—		—
	Gross recoveries		—		—		—		—		—
	Net recoveries/(charge-offs)		—		—		—		—		—
	Provision for (release of) loan losses(1)		116		(1)		1		12		128
	Other(2)		(30)		—		—		—		(30)
	Balance at June 30, 2016	$	252	$	4	$	18	$	49	$	323
Allowance for Loan Losses by Impairment Methodology
	Inherent	$	147	$	4	$	18	$	49	$	218
	Specific		105		—		—		—		105
	Total allowance for loan losses at June 30, 2016	$	252	$	4	$	18	$	49	$	323
Loans Evaluated by Impairment Methodology(3)
	Inherent	$	23,604	$	23,337	$	22,638	$	7,415	$	76,994
	Specific		582		—		30		—		612
	Total loans evaluated at June 30, 2016	$	24,186	$	23,337	$	22,668	$	7,415	$	77,606
Allowance for Lending Commitments
	Balance at December 31, 2015	$	180	$	1	$	—	$	4	$	185
	Provision for lending commitments(4)		1		—		—		2		3
	Other		—		(1)		—		—		(1)
	Balance at June 30, 2016	$	181	$	—	$	—	$	6	$	187
Allowance for Lending Commitments by Impairment Methodology
	Inherent	$	173	$	—	$	—	$	6	$	179
	Specific		8		—		—		—		8
	Total allowance for lending commitments
	at June 30, 2016	$	181	$	—	$	—	$	6	$	187
Lending Commitments Evaluated by Impairment Methodology(3)
	Inherent	$	63,120	$	5,264	$	327	$	496	$	69,207
	Specific		64		—		—		—		64
	Total lending commitments evaluated
	at June 30, 2016	$	63,184	$	5,264	$	327	$	496	$	69,271

			Corporate		Consumer		Residential Real Estate		Wholesale Real Estate
											Total
			(dollars in millions)
Allowance for Loan Losses
	Balance at December 31, 2014	$	118	$	2	$	8	$	21	$	149
	Gross charge-offs		—		—		(1)		—		(1)
	Gross recoveries		1		—		—		—		1
	Net recoveries/(charge-offs)		1		—		(1)		—		—
	Provision for loan losses(1)		26		—		2		2		30
	Other(2)		(10)		—		—		—		(10)
	Balance at June 30, 2015	$	135	$	2	$	9	$	23	$	169
Allowance for Loan Losses by Impairment Methodology
	Inherent	$	130	$	2	$	9	$	23	$	164
	Specific		5		—		—		—		5
	Total allowance for loan losses at June 30, 2015	$	135	$	2	$	9	$	23	$	169
Loans Evaluated by Impairment Methodology(3)
	Inherent	$	22,479	$	19,464	$	18,214	$	6,388	$	66,545
	Specific		21		—		27		—		48
	Total loans evaluated at June 30, 2015	$	22,500	$	19,464	$	18,241	$	6,388	$	66,593
Allowance for Lending Commitments
	Balance at December 31, 2014	$	147	$	—	$	—	$	2	$	149
	Provision for lending commitments(4)		6		—		—		2		8
	Balance at June 30, 2015	$	153	$	—	$	—	$	4	$	157
Allowance for Lending Commitments by Impairment Methodology
	Inherent	$	153	$	—	$	—	$	4	$	157
	Specific		—		—		—		—		—
	Total allowance for lending commitments at
	June 30, 2015	$	153	$	—	$	—	$	4	$	157
Lending Commitments Evaluated by Impairment Methodology(3)
	Inherent	$	65,183	$	4,235	$	289	$	623	$	70,330
	Specific		—		—		—		—		—
	Total lending commitments evaluated at
	June 30, 2015	$	65,183	$	4,235	$	289	$	623	$	70,330

_______________

• The Firm recorded provisions of $16 million and $4 million for loan losses for the current quarter and prior year quarter, respectively.
• Amount includes the impact related to the transfer to loans held for sale and foreign currency translation adjustments.
• Loan balances are gross of the allowance for loan losses, and lending commitments are gross of the allowance for lending commitments.
• The Firm recorded a release of $13 million and $29 million for commitments for the current quarter and prior year quarter, respectively.

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Deposits (Tables)

6 Months Ended

Jun. 30, 2016

Deposits [Abstract]

Deposits

Deposits
			At June 30,		At December 31,
			2016(1)		2015(1)
		(dollars in millions)
Savings and demand deposits		$	151,014	$	153,346
Time deposits(2)			1,679		2,688
	Total(3)	$	152,693	$	156,034
(1)	Total deposits subject to the FDIC insurance at June 30, 2016 and December 31, 2015 were $110 billion and $113 billion, respectively. Of the total time deposits subject to the FDIC insurance at June 30, 2016 and December 31, 2015, $20 million and $14 million, respectively, met or exceeded the FDIC insurance limit.
(2)	Certain time deposit accounts are carried at fair value under the fair value option (see Note 3).
(3)	Deposits were primarily held in the U.S.

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Long-Term Borrowings and Other Secured Financings (Tables)

6 Months Ended

Jun. 30, 2016

Components of Other Secured Financings

Components of Long-term Borrowings

Components of Long-term Borrowings
		At June 30, 2016		At December 31, 2015
		(dollars in millions)
Senior debt	$	149,519	$	140,494
Subordinated debt		11,120		10,404
Junior subordinated
debentures		2,853		2,870
Total	$	163,492	$	153,768

Other Secured Financings

Components of Other Secured Financings
			At		At
			June 30,		December 31,
			2016		2015
			(dollars in millions)
Secured financings with original
	maturities greater than one year	$	8,159	$	7,629
Secured financings with original
	maturities one year or less		1,444		1,435
Failed sales(1)			298		400
	Total	$	9,901	$	9,464

___________

(1) For more information on failed sales, see Note 12.

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Commitments, Guarantees and Contingencies (Tables)

6 Months Ended

Jun. 30, 2016

Commitments, Guarantees and Contingencies [Abstract]

Commitments by Period of Expiration

Commitments
			Years to Maturity at June 30, 2016
			Less
			than 1		1-3		3-5		Over 5		Total
			(dollars in millions)
Letters of credit and other financial guarantees
	obtained to satisfy collateral requirements	$	125	$	—	$	1	$	42	$	168
Investment activities			598		93		16		290		997
Corporate lending commitments(1)			15,625		24,405		47,248		1,501		88,779
Consumer lending commitments			5,255		5		—		4		5,264
Residential real estate lending commitments			52		43		87		236		418
Wholesale real estate lending commitments			127		266		137		69		599
Forward-starting reverse repurchase agreements and
	securities borrowing agreements(2)		69,990		—		—		—		69,990
Underwriting commitments			25		—		—		—		25
	Total	$	91,797	$	24,812	$	47,489	$	2,142	$	166,240

(1)Due to the nature of the Firm’s obligations under the commitments, these amounts include certain commitments participated to third parties of $3.9 billion.

(2) The Firm enters into forward-starting reverse repurchase and securities borrowing agreements that primarily settle within three business days of the trade date, and of the total amount at June 30,2016, $59.7 billion settled within three business days.

Obligations under Guarantee Arrangements

Obligations Under Guarantee Arrangements at June 30, 2016
			Maximum Potential Payout/Notional										Carrying Amount (Asset)/ Liability		Collateral/ Recourse
			Years to Maturity
			Less than 1		1-3		3-5		Over 5		Total
			(dollars in millions)
Credit derivative contracts(1)		$	211,128	$	200,959	$	123,957	$	31,246	$	567,290	$	396	$	—
Other credit contracts			43		25		—		276		344		(17)		—
Non-credit derivative contracts(1)			1,087,106		638,791		290,370		540,112		2,556,379		81,420		—
Standby letters of credit and other
	financial guarantees issued(2)		803		1,091		1,250		5,888		9,032		(123)		6,831
Market value guarantees			63		250		96		15		424		2		6
Liquidity facilities			3,001		—		—		—		3,001		(5)		5,406
Whole loan sales guarantees			—		—		2		23,396		23,398		9		—
Securitization representations and
	warranties		—		—		—		62,180		62,180		103		—
General partner guarantees			35		39		53		308		435		85		—

(1)Carrying amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting. For further information on derivative contracts, see Note 4.

(2) These amounts include certainissued standby letters of credit participated to third parties totaling $0.7 billion due to the nature of the Firm’s obligations under these arrangements.

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Variable Interest Entities and Securitization Activities (Tables)

6 Months Ended

Jun. 30, 2016

Securitization Activities and Variable Interest Entities [Abstract]

Consolidated VIEs

Consolidated VIEs
Assets and Liabilities by Type of Activity
		At June 30, 2016				At December 31, 2015
		VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
		(dollars in millions)
Credit-linked notes	$	901	$	—	$	900	$	—
Other structured financings		924		240		787		13
Asset-backed securitizations(1)		319		191		668		423
Other(2)		931		29		245		—
Total	$	3,075	$	460	$	2,600	$	436

_________

• The value of assets is determined based on the fair value of the liabilities of and the interests owned by the Firm in such VIEs, because the fair values for the liabilities and interests owned are more observable.
• Other primarily includes certain operating entities, investment funds and structured transactions.

Assets and Liabilities by Balance Sheet Caption
		At June 30,		At December 31,
		2016		2015
Assets		(dollars in millions)
Cash and due from banks		$	62	$	14
Trading assets, at fair value			1,973		1,842
Customer and other receivables			3		3
Goodwill			18		—
Intangible assets			141		—
Other assets			878		741
	Total assets	$	3,075	$	2,600
Liabilities
Other secured financings, at fair value		$	430	$	431
Other liabilities and accrued expenses			30		5
	Total liabilities	$	460	$	436

Non-Consolidated VIEs

Non-Consolidated VIE Assets and Liabilities, Maximum and Carrying Value of Exposure to Loss
			At June 30, 2016
			Mortgage- and Asset-Backed Securitizations			Collateralized Debt Obligations		Municipal Tender Option Bonds		Other Structured Financings		Other
			(dollars in millions)
VIE assets that the Firm does not consolidate
	(unpaid principal balance)		$	115,088	$	6,825	$	4,999	$	4,081	$	39,281
Maximum exposure to loss:
	Debt and equity interests		$	12,670	$	955	$	31	$	1,712	$	4,706
	Derivative and other contracts			—		—		3,001		—		73
	Commitments, guarantees and other			612		350		—		363		300
		Total maximum exposure to loss	$	13,282	$	1,305	$	3,032	$	2,075	$	5,079
Carrying value of exposure to loss—Assets:
	Debt and equity interests		$	12,670	$	955	$	3	$	1,324	$	4,706
	Derivative and other contracts			—		—		5		—		27
		Total carrying value of exposure to loss—Assets	$	12,670	$	955	$	8	$	1,324	$	4,733
Carrying value of exposure to loss—Liabilities:
	Derivative and other contracts		$	—	$	—	$	—	$	—	$	31
	Commitments, guarantees and other			—		—		—		2		10
		Total carrying value of exposure to loss—Liabilities	$	—	$	—	$	—	$	2	$	41

			At December 31, 2015
			Mortgage- and Asset-Backed Securitizations			Collateralized Debt Obligations		Municipal Tender Option Bonds		Other Structured Financings		Other
			(dollars in millions)
VIE assets that the Firm does not consolidate
	(unpaid principal balance)		$	126,872	$	8,805	$	4,654	$	2,201	$	20,775
Maximum exposure to loss:
	Debt and equity interests		$	13,361	$	1,259	$	1	$	1,129	$	3,854
	Derivative and other contracts			—		—		2,834		—		67
	Commitments, guarantees and other			494		231		—		361		222
		Total maximum exposure to loss	$	13,855	$	1,490	$	2,835	$	1,490	$	4,143
Carrying value of exposure to loss—Assets:
	Debt and equity interests		$	13,361	$	1,259	$	1	$	685	$	3,854
	Derivative and other contracts			—		—		5		—		13
		Total carrying value of exposure to loss—Assets	$	13,361	$	1,259	$	6	$	685	$	3,867
Carrying value of exposure to loss—Liabilities:
	Derivative and other contracts		$	—	$	—	$	—	$	—	$	15
	Commitments, guarantees and other			—		—		—		3		—
		Total carrying value of exposure to loss—Liabilities	$	—	$	—	$	—	$	3	$	15

Non-Consolidated VIE Mortgage- and Asset-Backed Securitization Assets
			At June 30, 2016				At December 31, 2015
			Unpaid Principal Balance		Debt and Equity Interests		Unpaid Principal Balance		Debt and Equity Interests
			(dollars in millions)
Residential mortgages		$	3,708	$	410	$	13,787	$	1,012
Commercial mortgages			55,158		2,576		57,313		2,871
U.S. agency collateralized mortgage obligations			20,853		3,766		13,236		2,763
Other consumer or commercial loans			35,369		5,918		42,536		6,715
	Total mortgage- and asset-backed securitization assets	$	115,088	$	12,670	$	126,872	$	13,361

Information Regarding SPEs

				At June 30, 2016
				Residential Mortgage Loans		Commercial Mortgage Loans		U.S. Agency Collateralized Mortgage Obligations		Credit-Linked Notes and Other(1)
				(dollars in millions)
SPE assets (unpaid principal balance)(2)			$	21,239	$	51,025	$	11,116	$	11,668
Retained interests (fair value):
	Investment grade		$	—	$	43	$	755	$	—
	Non-investment grade			54		64		—		974
		Total retained interests (fair value)	$	54	$	107	$	755	$	974
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	32	$	142	$	—
	Non-investment grade			53		47		—		—
		Total interests purchased in the secondary market (fair value)	$	53	$	79	$	142	$	—
Derivative assets (fair value)			$	—	$	291	$	—	$	206
Derivative liabilities (fair value)				—		—		—		449

				At December 31, 2015
				Residential Mortgage Loans		Commercial Mortgage Loans		U.S. Agency Collateralized Mortgage Obligations		Credit-Linked Notes and Other(1)
				(dollars in millions)
SPE assets (unpaid principal balance)(2)			$	22,440	$	72,760	$	17,978	$	12,235
Retained interests (fair value):
	Investment grade		$	—	$	238	$	649	$	—
	Non-investment grade			160		63		—		1,136
		Total retained interests (fair value)	$	160	$	301	$	649	$	1,136
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	88	$	99	$	—
	Non-investment grade			60		63		—		10
		Total interests purchased in the secondary market (fair value)	$	60	$	151	$	99	$	10
Derivative assets (fair value)			$	—	$	343	$	—	$	151
Derivative liabilities (fair value)				—		—		—		449

_____________

(1)Amounts include CLO transactions managed by unrelated third parties.

(2) Amounts include assets transferred by unrelated transferors.

				At June 30, 2016
				Level 1		Level 2		Level 3		Total
				(dollars in millions)
Retained interests (fair value):
	Investment grade		$	—	$	798	$	—	$	798
	Non-investment grade			—		15		1,077		1,092
		Total retained interests (fair value)	$	—	$	813	$	1,077	$	1,890
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	174	$	—	$	174
	Non-investment grade			—		85		15		100
		Total interests purchased in the secondary market (fair value)	$	—	$	259	$	15	$	274
Derivative assets (fair value)			$	—	$	482	$	15	$	497
Derivative liabilities (fair value)				—		102		347		449

				At December 31, 2015
				Level 1		Level 2		Level 3		Total
				(dollars in millions)
Retained interests (fair value):
	Investment grade		$	—	$	886	$	1	$	887
	Non-investment grade			—		17		1,342		1,359
		Total retained interests (fair value)	$	—	$	903	$	1,343	$	2,246
Interests purchased in the secondary market (fair value):
	Investment grade		$	—	$	187	$	—	$	187
	Non-investment grade			—		112		21		133
		Total interests purchased in the secondary market (fair value)	$	—	$	299	$	21	$	320
Derivative assets (fair value)			$	—	$	466	$	28	$	494
Derivative liabilities (fair value)				—		110		339		449

Schedule of proceeds from securitization transactions

Proceeds from New Securitization Transactions and Retained Interests in Securitization Transactions
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2016		2015		2016		2015
		(dollars in millions)
Proceeds received from new securitization transactions	$	4,163	$	6,273	$	6,876	$	11,164
Proceeds from retained interests in securitization transactions		502		658		1,133		1,606

Proceeds from Sales to CLO Entities Sponsored by Non-Affiliates
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2016		2015		2016		2015
		(dollars in millions)
Proceeds from sale of corporate loans sold to those SPEs	$	—	$	621	$	31	$	966

Schedule of exposure of securities enter into bilateral OTC equity derivatives

		At June 30, 2016		At December 31, 2015
		(dollars in millions)
Carrying value of assets derecognized at the time of sale and gross cash proceeds	$	9,524	$	7,878
Fair value of assets sold		9,692		7,935
Fair value of derivative assets recognized in the consolidated balance sheets		218		97
Fair value of derivative liabilities recognized in the consolidated balance sheets		50		40

Transfers of Assets Treated as Secured Financings

Carrying Value of Assets and Liabilities Related to Failed Sales
		At June 30, 2016				At December 31, 2015
		Assets		Liabilities		Assets		Liabilities
		(dollars in millions)
Failed sales	$	298	$	298	$	400	$	400

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Regulatory Requirements (Tables)

6 Months Ended

Jun. 30, 2016

Regulatory Requirements

Capital Measures

Regulatory Capital Measures and Minimum Regulatory Capital Ratios
			At June 30, 2016				At December 31, 2015
			Amount	Ratio	Minimum Ratio(1)		Amount	Ratio	Minimum Ratio(1)
			(dollars in millions)
Regulatory capital and capital ratios:
	Common Equity Tier 1 capital	$	59,796	16.8%	5.9%	$	59,409	15.5%	4.5%
	Tier 1 capital		66,782	18.8%	7.4%		66,722	17.4%	6.0%
	Total capital		79,830	22.4%	9.4%		79,403	20.7%	8.0%
	Tier 1 leverage(2)		—	8.3%	4.0%		—	8.3%	4.0%
Assets:
	Total RWAs	$	355,982	N/A	N/A	$	384,162	N/A	N/A
	Adjusted average assets(3)		804,511	N/A	N/A		803,574	N/A	N/A

__________

N/A—Not Applicable

(1) Percentages represent minimum regulatory capital ratios under the transitional rules.

(2)Tier 1 leverage ratios are calculated under Standardized Approach transitional rules.

(3) Adjusted average assets represent the denominator of the Tier 1 leverage ratio and are composed of the average daily balance of consolidated on-balance sheet assets under U.S. GAAP during the calendar quarter, adjusted for disallowed goodwill, transitional intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments.

U.S. Bank Subsidiaries’ Regulatory Capital Measures and Required Capital Ratios
		Morgan Stanley Bank, N.A.
		At June 30, 2016				At December 31, 2015
		Amount	Ratio	Required Capital Ratio(1)		Amount	Ratio	Required Capital Ratio(1)
		(dollars in millions)
Common Equity Tier 1 capital	$	14,523	16.8%	6.5%	$	13,333	15.1%	6.5%
Tier 1 capital		14,523	16.8%	8.0%		13,333	15.1%	8.0%
Total capital		16,321	18.9%	10.0%		15,097	17.1%	10.0%
Tier 1 leverage		14,523	10.9%	5.0%		13,333	10.2%	5.0%

		Morgan Stanley Private Bank, National Association
		At June 30, 2016				At December 31, 2015
		Amount	Ratio	Required Capital Ratio(1)		Amount	Ratio	Required Capital Ratio(1)
		(dollars in millions)
Common Equity Tier 1 capital	$	5,153	28.0%	6.5%	$	4,197	26.5%	6.5%
Tier 1 capital		5,153	28.0%	8.0%		4,197	26.5%	8.0%
Total capital		5,186	28.2%	10.0%		4,225	26.7%	10.0%
Tier 1 leverage		5,153	11.4%	5.0%		4,197	10.5%	5.0%

_______

(1) Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes.

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Total Equity (Tables)

6 Months Ended

Jun. 30, 2016

Redeemable Noncontrolling Interests and Total Equity

Preferred Stock Outstanding

Preferred Stock Outstanding
		Shares				Carrying Value
		Outstanding		Liquidation		At		At
		At June 30,		Preference		June 30,		December 31,
Series		2016		per Share		2016		2015
		(shares in millions)				(dollars in millions)
A		44,000	$	25,000	$	1,100	$	1,100
C(1)		519,882		1,000		408		408
E		34,500		25,000		862		862
F		34,000		25,000		850		850
G		20,000		25,000		500		500
H		52,000		25,000		1,300		1,300
I		40,000		25,000		1,000		1,000
J		60,000		25,000		1,500		1,500
	Total				$	7,520	$	7,520

____________

(1)Series C is comprised of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million.

Changes in Accumulated Other Comprehensive Income (Loss) by Component

Changes in AOCI by Component, Net of Tax and Noncontrolling Interests
			Foreign Currency Translation Adjustments		AFS Securities		Pensions, Postretirement and Other		DVA		Total
			(dollars in millions)
Balance at March 31, 2016		$	(831)	$	76	$	(373)	$	(110)	$	(1,238)
	Change in OCI before reclassifications		52		188		(5)		143		378
	Amounts reclassified from AOCI(2)(3)		—		(45)		—		—		(45)
	Net OCI during the period		52		143		(5)		143		333
Balance at June 30, 2016		$	(779)	$	219	$	(378)	$	33	$	(905)

			Foreign Currency Translation Adjustments		Change in Net Unrealized Gains (Losses) on AFS Securities		Pensions, Postretirement and Other		Debt Valuation Adjustment	Total
			(dollars in millions)
Balance at March 31, 2015		$	(883)	$	127	$	(510)	$	—	(1,266)
	Change in OCI before reclassifications		50		(208)		(4)		—	(162)
	Amounts reclassified from AOCI(3)		—		(20)		1		—	(19)
	Net OCI during the period		50		(228)		(3)		—	(181)
Balance at June 30, 2015		$	(833)	$	(101)	$	(513)	$	—	(1,447)

				Foreign Currency Translation Adjustments		Change in Net Unrealized Gains (Losses) on AFS Securities		Pensions, Postretirement and Other		Debt Valuation Adjustment		Total
				(dollars in millions)
Balance at December 31, 2015			$	(963)	$	(319)	$	(374)	$	—	$	(1,656)
	Cumulative adjustment for accounting
		change related to DVA(1)		—		—		—		(312)		(312)
	Change in OCI before reclassifications			184		590		(3)		371		1,142
	Amounts reclassified from AOCI(2)(3)			—		(52)		(1)		(26)		(79)
Net OCI during the period				184		538		(4)		345		1,063
Balance at June 30, 2016			$	(779)	$	219	$	(378)	$	33	$	(905)

Balance at December 31, 2014	$	(663)	$	(73)	$	(512)	$	—	$	(1,248)
Change in OCI before reclassifications		(170)		7		(4)		—		(167)
Amounts reclassified from AOCI(3)		—		(35)		3		—		(32)
Net OCI during the period		(170)		(28)		(1)		—		(199)
Balance at June 30, 2015	$	(833)	$	(101)	$	(513)	$	—	$	(1,447)

___________

• In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, a cumulative catch up adjustment was recorded as of January 1, 2016 to move the cumulative DVA amount, net of noncontrolling interest and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOCI. See Note 2 for further information.
• Amounts reclassified from AOCI related to realization of DVA are classified within Trading revenues in the consolidated statements of income. The tax impact in Provision for (benefit from) income taxes resulting from such reclassifications was $(15) million related to DVA in the current year period. See Note 2 for further information.
• Amounts reclassified from AOCI related to realized gains and losses from sales of AFS securities are classified within Other revenues in the consolidated statements of income. The tax impact in Provision for (benefit from) income taxes resulting from such reclassifications was $(26) million in the current quarter and $(30) million in the current year period, and $(11) million in the prior quarter and $(20) million for the prior year period.

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Calculation of Basic and Diluted EPS

			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(in millions, except for per share data)
Basic EPS:
	Income from continuing operations	$	1,650	$	1,833	$	2,810	$	4,301
	Income (loss) from discontinued operations		(4)		(2)		(7)		(7)
	Net income		1,646		1,831		2,803		4,294
	Net income applicable to noncontrolling interests		64		24		87		93
	Net income applicable to Morgan Stanley		1,582		1,807		2,716		4,201
	Less: Preferred stock dividends		(156)		(141)		(234)		(219)
	Less: Allocation of (earnings) loss to participating RSUs(1)		(1)		(1)		(1)		(3)
	Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
	Weighted average common shares outstanding		1,866		1,919		1,875		1,922
Earnings per basic common share:
	Income from continuing operations	$	0.77	$	0.87	$	1.33	$	2.07
	Income (loss) from discontinued operations		(0.01)		—		(0.01)		—
	Earnings per basic common share	$	0.76	$	0.87	$	1.32	$	2.07
Diluted EPS:
	Earnings applicable to Morgan Stanley common shareholders	$	1,425	$	1,665	$	2,481	$	3,979
	Weighted average common shares outstanding		1,866		1,919		1,875		1,922
	Effect of dilutive securities: Stock options and RSUs(1)		33		41		32		40
	Weighted average common shares outstanding and common
	stock equivalents		1,899		1,960		1,907		1,962
Earnings per diluted common share:
	Income from continuing operations	$	0.75	$	0.85	$	1.30	$	2.03
	Income (loss) from discontinued operations		—		—		—		—
	Earnings per diluted common share	$	0.75	$	0.85	$	1.30	$	2.03

_____________

(1) Restricted stock units (“RSUs”) that are considered participating securities are treated as a separate class of securities in the computation of basic EPS, and, therefore, such RSUs are not included as incremental shares in the diluted EPS computations. The diluted EPS computations also do not include weighted average antidilutive RSUs and antidilutive stock options of 14 million shares and 12 million shares for the current quarter and prior year quarter, respectively, and 15 million shares and 12 million shares for the current year period and prior year period, respectively.

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Interest Income and Interest Expense (Tables)

6 Months Ended

Jun. 30, 2016

Interest Income And Interest Expense

Schedule of Details of Interest Income and Interest Expense

Interest Income and Interest Expense
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Interest income(1):
	Trading assets(2)	$	526	$	555	$	1,109	$	1,149
	Investment securities		237		238		473		438
	Loans		680		529		1,327		1,004
	Interest bearing deposits with banks		52		22		105		45
	Securities purchased under agreements to resell and Securities borrowed(3)		(120)		(200)		(198)		(305)
	Customer receivables and Other(4)		292		242		598		539
Total interest income		$	1,667	$	1,386	$	3,414	$	2,870
Interest expense(1):
	Deposits	$	15	$	17	$	37	$	35
	Short-term borrowings		7		5		14		9
	Long-term borrowings		844		915		1,804		1,841
	Securities sold under agreements to repurchase and Securities loaned(5)		259		235		513		543
	Customer payables and Other(6)		(371)		(484)		(766)		(852)
Total interest expense		$	754	$	688	$	1,602	$	1,576
Net interest		$	913	$	698	$	1,812	$	1,294

_____________

(1) Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument and related market conventions. When interest is included as a component of the instrument’s fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense.

(2) Interest expense on Trading liabilities is reported as a reduction to Interest income on Trading assets.

(3) Includes fees paid on Securities borrowed.

(4) Includes interest from customer receivables and other interest earning assets.

(5) Includes fees received on Securities loaned.

(6) Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions.

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2016

Employee Benefit Plans

Components of Net Periodic Benefit Expense (Income)

Components of Net Periodic Benefit Expense (Income) for Pension and Other Postretirement Plans
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Service cost, benefits earned during the period		$	4	$	5	$	8	$	10
Interest cost on projected benefit obligation			39		38		77		77
Expected return on plan assets			(30)		(29)		(60)		(59)
Net amortization of prior service credit			(5)		(5)		(9)		(10)
Net amortization of actuarial loss			3		7		6		13
	Net periodic benefit expense	$	11	$	16	$	22	$	31

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Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Selected Financial Information by Segments

Selected Financial Information
				Three Months Ended June 30, 2016
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	4,496	$	2,982	$	581	$	(63)	$	7,996
Interest income				966		920		3		(222)		1,667
Interest expense				884		91		1		(222)		754
	Net interest			82		829		2		—		913
		Net revenues	$	4,578	$	3,811	$	583	$	(63)	$	8,909
Income from continuing operations before income taxes			$	1,506	$	859	$	118	$	—	$	2,483
Provision for income taxes				453		343		37		—		833
Income from continuing operations				1,053		516		81		—		1,650
Income (loss) from discontinued operations, net of
	income taxes			(4)		—		—		—		(4)
Net income				1,049		516		81		—		1,646
	Net income applicable to noncontrolling interests			61		—		3		—		64
Net income applicable to Morgan Stanley			$	988	$	516	$	78	$	—	$	1,582

				Three Months Ended June 30, 2015
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	5,205	$	3,138	$	757	$	(55)	$	9,045
Interest income				723		782		—		(119)		1,386
Interest expense				756		45		6		(119)		688
	Net interest			(33)		737		(6)		—		698
		Net revenues	$	5,172	$	3,875	$	751	$	(55)	$	9,743
Income from continuing operations before income taxes			$	1,622	$	885	$	220	$	—	$	2,727
Provision for income taxes				511		324		59		—		894
Income from continuing operations				1,111		561		161		—		1,833
Income (loss) from discontinued operations, net of
	income taxes			(2)		—		—		—		(2)
Net income				1,109		561		161		—		1,831
	Net income applicable to noncontrolling interests			22		—		2		—		24
Net income applicable to Morgan Stanley			$	1,087	$	561	$	159	$	—	$	1,807

				Six Months Ended June 30, 2016
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	8,141	$	5,819	$	1,059	$	(130)	$	14,889
Interest income				2,019		1,834		4		(443)		3,414
Interest expense				1,868		174		3		(443)		1,602
	Net interest			151		1,660		1		—		1,812
		Net revenues	$	8,292	$	7,479	$	1,060	$	(130)	$	16,701
Income from continuing operations before income taxes			$	2,414	$	1,645	$	162	$	—	$	4,221
Provision for income taxes				728		636		47		—		1,411
Income from continuing operations				1,686		1,009		115		—		2,810
Income (loss) from discontinued operations, net of
	income taxes			(7)		—		—		—		(7)
Net income				1,679		1,009		115		—		2,803
	Net income applicable to noncontrolling interests			100		—		(13)		—		87
Net income applicable to Morgan Stanley			$	1,579	$	1,009	$	128	$	—	$	2,716

				Six Months Ended June 30, 2015
				Institutional Securities(1)		Wealth Management		Investment Management		Intersegment Eliminations		Total
			(dollars in millions)
Total non-interest revenues(2)(3)			$	10,751	$	6,283	$	1,431	$	(109)	$	18,356
Interest income				1,593		1,519		1		(243)		2,870
Interest expense				1,714		93		12		(243)		1,576
	Net interest			(121)		1,426		(11)		—		1,294
		Net revenues	$	10,630	$	7,709	$	1,420	$	(109)	$	19,650
Income from continuing operations before income taxes			$	3,435	$	1,740	$	407	$	—	$	5,582
Provision for income taxes(4)				517		644		120		—		1,281
Income from continuing operations				2,918		1,096		287		—		4,301
Income (loss) from discontinued operations, net of
	income taxes			(7)		—		—		—		(7)
Net income				2,911		1,096		287		—		4,294
	Net income applicable to noncontrolling interests			74		—		19		—		93
Net income applicable to Morgan Stanley			$	2,837	$	1,096	$	268	$	—	$	4,201

(1) In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities, for the current quarter and current year period DVA gains (losses) are recorded within OCI when unrealized and in Trading revenues when realized. In the prior year quarter and prior year period, the realized and unrealized DVA gains (losses) are recorded in Trading revenues. See Notes 2 and 14 for further information.

(2) In certain management fee arrangements, the Firm is entitled to receive performance-based fees (also referred to as incentive fees and includes carried interest) when the return on assets under management exceeds certain benchmark returns or other performance targets. In such arrangements, performance fee revenues are accrued (or reversed) quarterly based on measuring account/fund performance to date versus the performance benchmark stated in the investment management agreement. The Firm’s portion of unrealized cumulative amount of performance-based fee revenue (for which the Firm is not obligated to pay compensation) at risk of reversing if fund performance falls below stated investment management agreement benchmarks was approximately $421 million and $422 million at June 30,2016and December 31, 2015, respectively. See Note 11 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

(3) The Firm waives a portion of its fees from certain registered money market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940. These fee waivers resulted in a reduction of fees of approximately $12 million and $50 millionfor the current quarter and prior year quarter, respectively, and $35 million and $100 million for the current year period and prior year period, respectively.

(4) The Firm’s effective tax rate from continuing operations for the prior year period included a net discrete tax benefit of $564 million, within Institutional Securities (see Note 18).

Assets by Segments

Total Assets by Business Segment
		At June 30,		At December 31,
		2016		2015
		(dollars in millions)
Institutional Securities	$	641,373	$	602,714
Wealth Management		182,801		179,708
Investment Management		4,699		5,043
Total(1)	$	828,873	$	787,465
(1) Corporate assets have been fully allocated to the business segments.

Net Revenues by Geographic Area

Net Revenues by Region
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
			(dollars in millions)
Americas		$	6,538	$	6,777	$	12,290	$	13,707
EMEA			1,312		1,436		2,441		3,198
Asia-Pacific			1,059		1,530		1,970		2,745
	Net revenues	$	8,909	$	9,743	$	16,701	$	19,650

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Introduction and Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements of Cash Flows
Reduction in nonredeemable noncontrolling interests primarily related to deconsolidation of certain legal entities associated with a real estate fund			$ 191
Accounting standard early adoption
Disclosures by disposal groups, including discontinued operations
Net noncash increase in total assets		$ 126
Real Estate Funds
Consolidated Statements of Cash Flows
Non-cash reduction of assets	$ 169
Reduction in nonredeemable noncontrolling interests primarily related to deconsolidation of certain legal entities associated with a real estate fund	191
Global Oil Merchanting Business
Disclosures by disposal groups, including discontinued operations
Gain (loss) on sales of assets	$ 59		$ 59

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Significant Accounting Policies (Details) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
New accounting pronouncement early adoption
Deconsolidation of certain legal entities associated with a real estate fund			$ (191)
Accounting standard early adoption
New accounting pronouncement early adoption
Debt valuation adjustment	[1]	$ 0
Accounting standard early adoption | Primarily from certain merchant banking funds in Investment Management
New accounting pronouncement early adoption
Consolidations related to certain merchant banking funds in Investment Management		206
Deconsolidation of certain legal entities associated with a real estate fund		(75)
Increase in assets related to certain merchant banking		131
Accounting standard early adoption | Retained Earnings
New accounting pronouncement early adoption
Debt valuation adjustment	[1]	312
Accounting standard early adoption | Accumulated Other Comprehensive Income (Loss)
New accounting pronouncement early adoption
Debt valuation adjustment	[1]	$ (312)

[1] In accordance with the early adoption of a provision of the accounting update Recognition and Measurement of Financial Assets and Financial Liabilities , a cumulative catch up adjustment was recorded as of January 1, 2016 to move the cumulative DVA amount, net of noncontrolling interest and tax, related to outstanding liabilities under the fair value option election from Retained earnings into Accumulated other comprehensive income (loss) (“AOCI”). See Notes 2 and 14 for further information.

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Fair Value Disclosures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Assets at Fair Value
Total trading assets	$ 256,794	$ 239,505
Total AFS securities, fair value	67,726	66,759
Securities purchased under agreement to resell	555	806
Intangible assets	3	5
Commitment	510	670
Investment measured at fair value using the NAV per share	3,246	3,843
Liabilities at Fair Value
Deposits	95	125
Short-term borrowings	511	1,648
Obligation to return securities received as collateral	18,738	19,316
Total trading liabilities	140,662	128,455
Securities sold under agreement to repurchase	699	683
Other secured financings	2,921	2,854
Long-term borrowings	37,804	33,045
Recurring
Assets at Fair Value
U.S. government and agency securities	47,465	36,341
Other sovereign government obligations	27,551	20,963
Corporate and other debt	27,228	29,847
Corporate equities	100,957	107,108
Securities received as collateral	10,128	11,225
Derivative and other contracts	38,158	28,613
Netting	(576,436)	(442,965)
Investments	1,868	1,244
Physical commodities	193	321
Total trading assets	253,548	235,662
Total AFS securities, fair value	67,726	66,759
Securities purchased under agreement to resell	555	806
Intangible assets	3	5
Total assets	321,832	303,232
Investment measured at fair value using the NAV per share	3,246	3,843
Liabilities at Fair Value
Deposits	95	125
Short-term borrowings	511	1,648
U.S. government and agency securities	13,452	13,913
Other sovereign government obligations	18,553	13,528
Corporate and other debt	6,054	5,049
Corporate equities	46,542	47,175
Obligation to return securities received as collateral	18,738	19,316
Derivative and other contracts	37,323	29,474
Netting	(556,319)	(427,876)
Total trading liabilities	140,662	128,455
Securities sold under agreement to repurchase	699	683
Other secured financings	2,921	2,854
Long-term borrowings	37,804	33,045
Total liabilities	182,692	166,810
Recurring | Corporate loans
Assets at Fair Value
Loan and lending commitment held at fair value	7,114	7,286
Recurring | Residential real estate
Assets at Fair Value
Loan and lending commitment held at fair value	1,721	1,885
Recurring | Wholesale real estate
Assets at Fair Value
Loan and lending commitment held at fair value	462	1,447
Recurring | Net Asset Value
Assets at Fair Value
Investments	3,246	3,843
Recurring | U.S. Treasury Securities
Assets at Fair Value
U.S. government and agency securities	24,565	17,658
Liabilities at Fair Value
U.S. government and agency securities	12,983	12,932
Recurring | U.S. Agency Securities
Assets at Fair Value
U.S. government and agency securities	22,900	18,683
Liabilities at Fair Value
U.S. government and agency securities	469	981
Recurring | State and Municipal Securities
Assets at Fair Value
Corporate and other debt	1,953	1,670
Liabilities at Fair Value
Corporate and other debt	3
Recurring | Residential Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	802	1,797
Recurring | Commercial Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	1,012	1,592
Liabilities at Fair Value
Corporate and other debt		2
Recurring | Asset-backed Securities
Assets at Fair Value
Corporate and other debt	230	519
Liabilities at Fair Value
Corporate and other debt	449
Recurring | Corporate Bonds
Assets at Fair Value
Corporate and other debt	12,027	10,226
Liabilities at Fair Value
Corporate and other debt	5,584	5,035
Recurring | Collateralized Debt and Loan Obligations
Assets at Fair Value
Corporate and other debt	552	714
Recurring | Loans and Lending Commitments
Assets at Fair Value
Corporate and other debt	9,297	10,618
Recurring | Lending Commitments
Liabilities at Fair Value
Corporate and other debt	0	3
Recurring | Other Debt
Assets at Fair Value
Corporate and other debt	1,355	2,711
Liabilities at Fair Value
Corporate and other debt	18	9
Recurring | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	463,574	326,044
Liabilities at Fair Value
Derivative and other contracts	437,766	307,409
Recurring | Credit Contracts
Assets at Fair Value
Derivative and other contracts	16,461	22,919
Liabilities at Fair Value
Derivative and other contracts	17,821	23,665
Recurring | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	76,505	64,955
Liabilities at Fair Value
Derivative and other contracts	78,625	65,350
Recurring | Equity Contracts
Assets at Fair Value
Derivative and other contracts	42,529	40,289
Liabilities at Fair Value
Derivative and other contracts	46,549	46,132
Recurring | Commodity Contracts
Assets at Fair Value
Derivative and other contracts	15,509	17,152
Liabilities at Fair Value
Derivative and other contracts	12,779	14,751
Recurring | Other Contracts
Assets at Fair Value
Derivative and other contracts	16	219
Liabilities at Fair Value
Derivative and other contracts	102	43
Recurring | Principal Investments
Assets at Fair Value
Investments	809	550
Recurring | Other Investments
Assets at Fair Value
Investments	1,059	694
Recurring | Level 1
Assets at Fair Value
U.S. government and agency securities	25,360	18,455
Other sovereign government obligations	20,942	13,559
Corporate and other debt	0	0
Corporate equities	100,018	106,296
Securities received as collateral	10,121	11,221
Derivative and other contracts	962	414
Netting	(4,184)	(3,840)
Investments	316	183
Physical commodities	0	0
Total trading assets	157,719	150,128
Total AFS securities, fair value	31,062	34,351
Securities purchased under agreement to resell	0	0
Intangible assets	0	0
Total assets	188,781	184,479
Liabilities at Fair Value
Deposits	0	0
Short-term borrowings	0	0
U.S. government and agency securities	13,341	13,786
Other sovereign government obligations	15,885	10,970
Corporate and other debt	0	0
Corporate equities	46,440	47,123
Obligation to return securities received as collateral	18,731	19,312
Derivative and other contracts	497	230
Netting	(4,184)	(3,840)
Total trading liabilities	94,894	91,421
Securities sold under agreement to repurchase	0	0
Other secured financings	0	0
Long-term borrowings	44	0
Total liabilities	94,938	91,421
Recurring | Level 1 | U.S. Treasury Securities
Assets at Fair Value
U.S. government and agency securities	24,565	17,658
Liabilities at Fair Value
U.S. government and agency securities	12,983	12,932
Recurring | Level 1 | U.S. Agency Securities
Assets at Fair Value
U.S. government and agency securities	795	797
Liabilities at Fair Value
U.S. government and agency securities	358	854
Recurring | Level 1 | State and Municipal Securities
Assets at Fair Value
Corporate and other debt	0	0
Liabilities at Fair Value
Corporate and other debt	0
Recurring | Level 1 | Residential Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	0	0
Recurring | Level 1 | Commercial Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	0	0
Liabilities at Fair Value
Corporate and other debt		0
Recurring | Level 1 | Asset-backed Securities
Assets at Fair Value
Corporate and other debt	0	0
Liabilities at Fair Value
Corporate and other debt	0
Recurring | Level 1 | Corporate Bonds
Assets at Fair Value
Corporate and other debt	0	0
Liabilities at Fair Value
Corporate and other debt	0	0
Recurring | Level 1 | Collateralized Debt and Loan Obligations
Assets at Fair Value
Corporate and other debt	0	0
Recurring | Level 1 | Loans and Lending Commitments
Assets at Fair Value
Corporate and other debt	0	0
Recurring | Level 1 | Lending Commitments
Liabilities at Fair Value
Corporate and other debt	0	0
Recurring | Level 1 | Other Debt
Assets at Fair Value
Corporate and other debt	0	0
Liabilities at Fair Value
Corporate and other debt	0	0
Recurring | Level 1 | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	791	406
Liabilities at Fair Value
Derivative and other contracts	969	466
Recurring | Level 1 | Credit Contracts
Assets at Fair Value
Derivative and other contracts	0	0
Liabilities at Fair Value
Derivative and other contracts	0	0
Recurring | Level 1 | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	140	55
Liabilities at Fair Value
Derivative and other contracts	82	22
Recurring | Level 1 | Equity Contracts
Assets at Fair Value
Derivative and other contracts	1,368	653
Liabilities at Fair Value
Derivative and other contracts	1,262	570
Recurring | Level 1 | Commodity Contracts
Assets at Fair Value
Derivative and other contracts	2,847	3,140
Liabilities at Fair Value
Derivative and other contracts	2,368	3,012
Recurring | Level 1 | Other Contracts
Assets at Fair Value
Derivative and other contracts	0	0
Liabilities at Fair Value
Derivative and other contracts	0	0
Recurring | Level 1 | Principal Investments
Assets at Fair Value
Investments	21	20
Recurring | Level 1 | Other Investments
Assets at Fair Value
Investments	295	163
Recurring | Level 2
Assets at Fair Value
U.S. government and agency securities	22,085	17,886
Other sovereign government obligations	6,607	7,400
Corporate and other debt	20,532	22,309
Corporate equities	367	379
Securities received as collateral	7	3
Derivative and other contracts	97,938	79,434
Netting	(505,871)	(380,443)
Investments	578	354
Physical commodities	193	321
Total trading assets	148,307	128,086
Total AFS securities, fair value	36,664	32,408
Securities purchased under agreement to resell	555	806
Intangible assets	3	0
Total assets	185,529	161,300
Liabilities at Fair Value
Deposits	65	106
Short-term borrowings	511	1,647
U.S. government and agency securities	111	127
Other sovereign government obligations	2,668	2,558
Corporate and other debt	6,045	5,045
Corporate equities	76	35
Obligation to return securities received as collateral	7	3
Derivative and other contracts	75,915	63,966
Netting	(505,871)	(380,443)
Total trading liabilities	84,822	71,734
Securities sold under agreement to repurchase	549	532
Other secured financings	2,480	2,393
Long-term borrowings	35,831	31,058
Total liabilities	124,258	107,470
Recurring | Level 2 | U.S. Treasury Securities
Assets at Fair Value
U.S. government and agency securities	0	0
Liabilities at Fair Value
U.S. government and agency securities	0	0
Recurring | Level 2 | U.S. Agency Securities
Assets at Fair Value
U.S. government and agency securities	22,085	17,886
Liabilities at Fair Value
U.S. government and agency securities	111	127
Recurring | Level 2 | State and Municipal Securities
Assets at Fair Value
Corporate and other debt	1,943	1,651
Liabilities at Fair Value
Corporate and other debt	3
Recurring | Level 2 | Residential Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	586	1,456
Recurring | Level 2 | Commercial Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	961	1,520
Liabilities at Fair Value
Corporate and other debt		2
Recurring | Level 2 | Asset-backed Securities
Assets at Fair Value
Corporate and other debt	142	494
Liabilities at Fair Value
Corporate and other debt	449
Recurring | Level 2 | Corporate Bonds
Assets at Fair Value
Corporate and other debt	11,751	9,959
Liabilities at Fair Value
Corporate and other debt	5,578	5,035
Recurring | Level 2 | Collateralized Debt and Loan Obligations
Assets at Fair Value
Corporate and other debt	443	284
Recurring | Level 2 | Loans and Lending Commitments
Assets at Fair Value
Corporate and other debt	3,879	4,682
Recurring | Level 2 | Lending Commitments
Liabilities at Fair Value
Corporate and other debt	0	3
Recurring | Level 2 | Other Debt
Assets at Fair Value
Corporate and other debt	827	2,263
Liabilities at Fair Value
Corporate and other debt	15	5
Recurring | Level 2 | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	462,243	323,586
Liabilities at Fair Value
Derivative and other contracts	436,022	305,151
Recurring | Level 2 | Credit Contracts
Assets at Fair Value
Derivative and other contracts	16,157	22,258
Liabilities at Fair Value
Derivative and other contracts	16,403	22,160
Recurring | Level 2 | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	76,264	64,608
Liabilities at Fair Value
Derivative and other contracts	78,441	65,177
Recurring | Level 2 | Equity Contracts
Assets at Fair Value
Derivative and other contracts	40,524	38,552
Liabilities at Fair Value
Derivative and other contracts	43,177	42,447
Recurring | Level 2 | Commodity Contracts
Assets at Fair Value
Derivative and other contracts	8,605	10,654
Liabilities at Fair Value
Derivative and other contracts	7,652	9,431
Recurring | Level 2 | Other Contracts
Assets at Fair Value
Derivative and other contracts	16	219
Liabilities at Fair Value
Derivative and other contracts	91	43
Recurring | Level 2 | Principal Investments
Assets at Fair Value
Investments	19	44
Recurring | Level 2 | Other Investments
Assets at Fair Value
Investments	559	310
Recurring | Level 3
Assets at Fair Value
U.S. government and agency securities	20	0
Other sovereign government obligations	2	4
Corporate and other debt	6,696	7,538
Corporate equities	572	433
Securities received as collateral	0	1
Derivative and other contracts	3,102	4,327
Netting	(2,537)	(3,120)
Investments	974	707
Physical commodities	0	0
Total trading assets	11,366	13,010
Total AFS securities, fair value	0	0
Securities purchased under agreement to resell	0	0
Intangible assets	0	5
Total assets	11,366	13,015
Liabilities at Fair Value
Deposits	30	19
Short-term borrowings	0	1
U.S. government and agency securities	0	0
Other sovereign government obligations	0	0
Corporate and other debt	9	4
Corporate equities	26	17
Obligation to return securities received as collateral	0	1
Derivative and other contracts	4,638	5,751
Netting	(2,537)	(3,120)
Total trading liabilities	4,673	5,773
Securities sold under agreement to repurchase	150	151
Other secured financings	441	461
Long-term borrowings	1,929	1,987
Total liabilities	7,223	8,392
Recurring | Level 3 | U.S. Treasury Securities
Assets at Fair Value
U.S. government and agency securities	0	0
Liabilities at Fair Value
U.S. government and agency securities	0	0
Recurring | Level 3 | U.S. Agency Securities
Assets at Fair Value
U.S. government and agency securities	20	0
Liabilities at Fair Value
U.S. government and agency securities	0	0
Recurring | Level 3 | State and Municipal Securities
Assets at Fair Value
Corporate and other debt	10	19
Liabilities at Fair Value
Corporate and other debt	0
Recurring | Level 3 | Residential Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	216	341
Recurring | Level 3 | Commercial Mortgage-backed Securities
Assets at Fair Value
Corporate and other debt	51	72
Liabilities at Fair Value
Corporate and other debt		0
Recurring | Level 3 | Asset-backed Securities
Assets at Fair Value
Corporate and other debt	88	25
Liabilities at Fair Value
Corporate and other debt	0
Recurring | Level 3 | Corporate Bonds
Assets at Fair Value
Corporate and other debt	276	267
Liabilities at Fair Value
Corporate and other debt	6	0
Recurring | Level 3 | Collateralized Debt and Loan Obligations
Assets at Fair Value
Corporate and other debt	109	430
Recurring | Level 3 | Loans and Lending Commitments
Assets at Fair Value
Corporate and other debt	5,418	5,936
Recurring | Level 3 | Lending Commitments
Liabilities at Fair Value
Corporate and other debt	0	0
Recurring | Level 3 | Other Debt
Assets at Fair Value
Corporate and other debt	528	448
Liabilities at Fair Value
Corporate and other debt	3	4
Recurring | Level 3 | Interest Rate Contracts
Assets at Fair Value
Derivative and other contracts	540	2,052
Liabilities at Fair Value
Derivative and other contracts	775	1,792
Recurring | Level 3 | Credit Contracts
Assets at Fair Value
Derivative and other contracts	304	661
Liabilities at Fair Value
Derivative and other contracts	1,418	1,505
Recurring | Level 3 | Foreign Exchange Contracts
Assets at Fair Value
Derivative and other contracts	101	292
Liabilities at Fair Value
Derivative and other contracts	102	151
Recurring | Level 3 | Equity Contracts
Assets at Fair Value
Derivative and other contracts	637	1,084
Liabilities at Fair Value
Derivative and other contracts	2,110	3,115
Recurring | Level 3 | Commodity Contracts
Assets at Fair Value
Derivative and other contracts	4,057	3,358
Liabilities at Fair Value
Derivative and other contracts	2,759	2,308
Recurring | Level 3 | Other Contracts
Assets at Fair Value
Derivative and other contracts	0	0
Liabilities at Fair Value
Derivative and other contracts	11	0
Recurring | Level 3 | Principal Investments
Assets at Fair Value
Investments	769	486
Recurring | Level 3 | Other Investments
Assets at Fair Value
Investments	205	221
Recurring | Counterparty and Cash Collateral Netting
Assets at Fair Value
Derivative and other contracts	(63,844)	(55,562)
Netting	(63,844)	(55,562)
Total trading assets	(63,844)	(55,562)
Total assets	(63,844)	(55,562)
Liabilities at Fair Value
Derivative and other contracts	(43,727)	(40,473)
Netting	(43,727)	(40,473)
Total trading liabilities	(43,727)	(40,473)
Total liabilities	$ (43,727)	$ (40,473)

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Fair Value Disclosures (Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Recurring - Level 3 - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Intangible Assets
Assets
Beginning balance	$ 4	$ 5	$ 5	$ 6	$ 6
Realized and Unrealized Gains (Losses)	0	1	0	1
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	(1)
Net Transfers	(4)	0	(5)	0
Ending balance	0	6	0	6	5
Unrealized Gains (Losses) for Level 3 Assets Outstanding	0	1	0	1
Deposits
Liabilities
Beginning balance	23		19
Realized and Unrealized Gains (Losses)	1		(2)
Purchases	0		0
Sales	0		0
Issuances	8		13
Settlements	0		0
Net Transfers	(2)		(4)
Ending balance	30		30		19
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	(1)		(2)
Short-term borrowings
Liabilities
Beginning balance			1
Realized and Unrealized Gains (Losses)			0
Purchases			0
Sales			0
Issuances			0
Settlements			(1)
Net Transfers			0
Ending balance	0		0		1
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding			0
Securities Sold under agreements to repurchase
Liabilities
Beginning balance	151	154	151	153	153
Realized and Unrealized Gains (Losses)	(1)	0	1	(1)
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	0	0	0	0
Ending balance	150	154	150	154	151
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	1	0	1	(1)
Other Secured Financings
Liabilities
Beginning balance	454	133	461	149	149
Realized and Unrealized Gains (Losses)	14	(2)	(32)	(6)
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	23	37	69	37
Settlements	(22)	0	(43)	(24)
Net Transfers	(28)	0	(78)	0
Ending balance	441	168	441	168	461
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	(14)	2	(32)	2
Long-term borrowings
Liabilities
Beginning balance	1,798	1,738	1,987	1,934	1,934
Realized and Unrealized Gains (Losses)	(21)	(51)	(12)	65
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	164	549	276	612
Settlements	(131)	(88)	(167)	(300)
Net Transfers	119	73	(179)	40
Ending balance	1,929	2,221	1,929	2,221	1,987
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	26	51	(6)	59
Trading Assets | U.S. Agency Securities
Assets
Beginning balance	8	0	0	0	0
Realized and Unrealized Gains (Losses)	0	0	1	0
Purchases	0	0	0	3
Sales	(18)	(3)	(19)	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	30	6	38	0
Ending balance	20	3	20	3	0
Unrealized Gains (Losses) for Level 3 Assets Outstanding	0	0	1	0
Trading Assets | Other Sovereign Government Obligations
Assets
Beginning balance	8	11	4	41	41
Realized and Unrealized Gains (Losses)	0	0	0	1
Purchases	0	5	0	6
Sales	(3)	(1)	(5)	(32)
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	(3)	(3)	3	(4)
Ending balance	2	12	2	12	4
Unrealized Gains (Losses) for Level 3 Assets Outstanding	0	0	1	1
Trading Assets | Corporate and Other Debt
Assets
Beginning balance	7,644	7,064	7,538	8,044	8,044
Realized and Unrealized Gains (Losses)	(10)	98	(81)	194
Purchases	503	2,431	1,268	2,905
Sales	(803)	(1,105)	(1,320)	(1,119)
Issuances	0	0	0	0
Settlements	(596)	(571)	(672)	(2,411)
Net Transfers	(42)	(214)	(37)	90
Ending balance	6,696	7,703	6,696	7,703	7,538
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(30)	(2)	(77)	45
Trading Assets | Corporate and Other Debt | State and Municipal Securities
Assets
Beginning balance	5	0	19	0	0
Realized and Unrealized Gains (Losses)	1	1	1	1
Purchases	4	4	4	4
Sales	0	(9)	(15)	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	0	11	1	2
Ending balance	10	7	10	7	19
Unrealized Gains (Losses) for Level 3 Assets Outstanding	2	1	1	1
Trading Assets | Corporate and Other Debt | Residential Mortgage-backed Securities
Assets
Beginning balance	292	296	341	175	175
Realized and Unrealized Gains (Losses)	3	2	(19)	21
Purchases	0	138	19	163
Sales	(82)	(32)	(133)	(51)
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	3	(26)	8	70
Ending balance	216	378	216	378	341
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(5)	2	(14)	12
Trading Assets | Corporate and Other Debt | Commercial Mortgage-backed Securities
Assets
Beginning balance	59	180	72	96	96
Realized and Unrealized Gains (Losses)	(3)	(4)	(10)	(6)
Purchases	1	5	0	16
Sales	(4)	(9)	(19)	(22)
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	(2)	(88)	8	0
Ending balance	51	84	51	84	72
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(5)	(5)	(11)	(9)
Trading Assets | Corporate and Other Debt | Asset-backed Securities
Assets
Beginning balance	4	67	25	76	76
Realized and Unrealized Gains (Losses)	(4)	5	(7)	(4)
Purchases	6	11	7	11
Sales	(1)	(64)	(18)	(29)
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	83	0	81	(35)
Ending balance	88	19	88	19	25
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(4)	1	(8)	2
Trading Assets | Corporate and Other Debt | Corporate Bonds
Assets
Beginning balance	224	424	267	386	386
Realized and Unrealized Gains (Losses)	17	(4)	62	10
Purchases	116	228	113	213
Sales	(35)	(150)	(128)	(126)
Issuances	0	0	0	0
Settlements	0	(2)	0	(1)
Net Transfers	(46)	(17)	(38)	(3)
Ending balance	276	479	276	479	267
Unrealized Gains (Losses) for Level 3 Assets Outstanding	17	(16)	61	9
Trading Assets | Corporate and Other Debt | Collateralized Debt and Loan Obligations
Assets
Beginning balance	348	822	430	1,152	1,152
Realized and Unrealized Gains (Losses)	18	68	5	145
Purchases	3	300	22	404
Sales	(178)	(439)	(224)	(682)
Issuances	0	0	0	0
Settlements	0	(78)	0	(331)
Net Transfers	(82)	(13)	(124)	(28)
Ending balance	109	660	109	660	430
Unrealized Gains (Losses) for Level 3 Assets Outstanding	18	(10)	17	(6)
Trading Assets | Corporate and Other Debt | Loans and Lending Commitments
Assets
Beginning balance	6,185	4,789	5,936	5,874	5,874
Realized and Unrealized Gains (Losses)	(46)	31	(111)	35
Purchases	360	1,615	970	2,082
Sales	(484)	(351)	(720)	(209)
Issuances	0	0	0	0
Settlements	(596)	(491)	(672)	(2,078)
Net Transfers	(1)	(81)	15	(192)
Ending balance	5,418	5,512	5,418	5,512	5,936
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(55)	26	(121)	30
Trading Assets | Corporate and Other Debt | Other Debt
Assets
Beginning balance	527	486	448	285	285
Realized and Unrealized Gains (Losses)	4	(1)	(2)	(8)
Purchases	13	130	133	12
Sales	(19)	(51)	(63)	0
Issuances	0	0	0	0
Settlements	0	0	0	(1)
Net Transfers	3	0	12	276
Ending balance	528	564	528	564	448
Unrealized Gains (Losses) for Level 3 Assets Outstanding	2	(1)	(2)	6
Trading Assets | Corporate Equities
Assets
Beginning balance	430	230	433	272	272
Realized and Unrealized Gains (Losses)	(63)	38	(45)	64
Purchases	273	266	296	260
Sales	(82)	(92)	(119)	(147)
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	14	44	7	37
Ending balance	572	486	572	486	433
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(63)	26	(64)	49
Trading Assets | Net Derivative and Other Contracts
Assets
Beginning balance	(1,060)	(2,310)	(1,424)	(1,784)	(1,784)
Realized and Unrealized Gains (Losses)	227	109	(171)	259
Purchases	58	49	82	98
Sales	0	0	0	0
Issuances	(151)	(204)	(209)	(412)
Settlements	216	252	837	383
Net Transfers	(826)	428	(651)	(220)
Ending balance	(1,536)	(1,676)	(1,536)	(1,676)	(1,424)
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(127)	0	(461)	107
Trading Assets | Net Derivative and Other Contracts | Interest Rate Contracts
Assets
Beginning balance	169	(496)	260	(173)	(173)
Realized and Unrealized Gains (Losses)	(159)	95	305	188
Purchases	2	4	3	9
Sales	0	0	0	0
Issuances	(7)	(13)	(21)	(20)
Settlements	42	14	(60)	124
Net Transfers	(282)	160	(722)	(364)
Ending balance	(235)	(236)	(235)	(236)	260
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(157)	135	205	197
Trading Assets | Net Derivative and Other Contracts | Credit Contracts
Assets
Beginning balance	(723)	(984)	(844)	(743)	(743)
Realized and Unrealized Gains (Losses)	65	(24)	(343)	(276)
Purchases	1	4	1	17
Sales	0	0	0	0
Issuances	0	(24)	0	(54)
Settlements	93	23	153	31
Net Transfers	(550)	16	(81)	36
Ending balance	(1,114)	(989)	(1,114)	(989)	(844)
Unrealized Gains (Losses) for Level 3 Assets Outstanding	53	(29)	(360)	(284)
Trading Assets | Net Derivative and Other Contracts | Foreign Exchange Contracts
Assets
Beginning balance	126	297	141	151	151
Realized and Unrealized Gains (Losses)	(58)	57	(109)	121
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	(1)	0	(1)
Settlements	(94)	43	(201)	144
Net Transfers	25	50	168	31
Ending balance	(1)	446	(1)	446	141
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(47)	82	(82)	120
Trading Assets | Net Derivative and Other Contracts | Equity Contracts
Assets
Beginning balance	(1,832)	(2,472)	(2,031)	(2,165)	(2,165)
Realized and Unrealized Gains (Losses)	168	(23)	(321)	(73)
Purchases	50	39	71	69
Sales	0	0	0	0
Issuances	(140)	(54)	(184)	(225)
Settlements	263	206	1,121	156
Net Transfers	18	202	(129)	136
Ending balance	(1,473)	(2,102)	(1,473)	(2,102)	(2,031)
Unrealized Gains (Losses) for Level 3 Assets Outstanding	(106)	(161)	(434)	(160)
Trading Assets | Net Derivative and Other Contracts | Commodity Contracts
Assets
Beginning balance	1,200	1,345	1,050	1,146	1,146
Realized and Unrealized Gains (Losses)	211	4	297	299
Purchases	5	2	7	3
Sales	0	0	0	0
Issuances	(4)	(112)	(4)	(112)
Settlements	(88)	(34)	(176)	(72)
Net Transfers	(26)	0	124	(59)
Ending balance	1,298	1,205	1,298	1,205	1,050
Unrealized Gains (Losses) for Level 3 Assets Outstanding	130	(27)	210	234
Trading Assets | Net Derivative and Other Contracts | Other Contracts
Assets
Beginning balance	0		0
Realized and Unrealized Gains (Losses)	0		0
Purchases	0		0
Sales	0		0
Issuances	0		0
Settlements	0		0
Net Transfers	(11)		(11)
Ending balance	(11)		(11)		0
Unrealized Gains (Losses) for Level 3 Assets Outstanding	0		0
Trading Assets | Investments
Assets
Beginning balance	922	1,220	707	1,158	1,158
Realized and Unrealized Gains (Losses)	5	(25)	(56)	(20)
Purchases	58	5	404	17
Sales	(11)	(12)	(40)	(52)
Issuances	0	0	0	0
Settlements	0	(205)	(41)	(205)
Net Transfers	0	(102)	0	(17)
Ending balance	974	881	974	881	707
Unrealized Gains (Losses) for Level 3 Assets Outstanding	7	(21)	(53)	(38)
Trading Assets | Investments | Principal Investments
Assets
Beginning balance	743	829	486	835	835
Realized and Unrealized Gains (Losses)	4	(21)	(39)	(4)
Purchases	33	5	403	15
Sales	(11)	(12)	(40)	(46)
Issuances	0	0	0	0
Settlements	0	(205)	(41)	(205)
Net Transfers	0	(15)	0	(14)
Ending balance	769	581	769	581	486
Unrealized Gains (Losses) for Level 3 Assets Outstanding	6	(21)	(37)	(26)
Trading Assets | Investments | Other Investments
Assets
Beginning balance	179	391	221	323	323
Realized and Unrealized Gains (Losses)	1	(4)	(17)	(16)
Purchases	25	0	1	2
Sales	0	0	0	(6)
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	0	(87)	0	(3)
Ending balance	205	300	205	300	221
Unrealized Gains (Losses) for Level 3 Assets Outstanding	1	0	(16)	(12)
Trading Assets | Securities Received as Collateral
Assets
Beginning balance		33	1	0	0
Realized and Unrealized Gains (Losses)		0	0	0
Purchases		0	0	3
Sales		(30)	(1)	0
Issuances		0	0	0
Settlements		0	0	0
Net Transfers		0	0	0
Ending balance	0	3	0	3	1
Unrealized Gains (Losses) for Level 3 Assets Outstanding		0	0	0
Trading Liabilities | Corporate and Other Debt
Liabilities
Beginning balance	11	46	4	121	121
Realized and Unrealized Gains (Losses)	0	0	3	(3)
Purchases	(6)	(21)	(10)	(12)
Sales	29	25	14	20
Issuances	0	0	0	0
Settlements	0	(29)	0	(39)
Net Transfers	(25)	(2)	(2)	(68)
Ending balance	9	19	9	19	4
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	(1)	0	(3)	3
Trading Liabilities | Corporate and Other Debt | Corporate Bonds
Liabilities
Beginning balance	6	23	0	78	78
Realized and Unrealized Gains (Losses)	1	0	5	2
Purchases	(5)	(21)	(7)	(12)
Sales	29	15	10	14
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	(25)	(2)	(2)	(67)
Ending balance	6	15	6	15	0
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	(1)	0	(5)	(2)
Trading Liabilities | Corporate and Other Debt | Lending Commitments
Liabilities
Beginning balance	1		0	5	5
Realized and Unrealized Gains (Losses)	(1)		0	5
Purchases	0		0	0
Sales	0		0	0
Issuances	0		0	0
Settlements	0		0	0
Net Transfers	0		0	0
Ending balance	0	0	0	0	0
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	0		0	5
Trading Liabilities | Corporate and Other Debt | Other Debt
Liabilities
Beginning balance	4	23	4	38	38
Realized and Unrealized Gains (Losses)	0	0	(2)	0
Purchases	(1)	0	(3)	0
Sales	0	10	4	6
Issuances	0	0	0	0
Settlements	0	(29)	0	(39)
Net Transfers	0	0	0	(1)
Ending balance	3	4	3	4	4
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	0	0	2	0
Trading Liabilities | Corporate Equities
Liabilities
Beginning balance	31	50	17	45	45
Realized and Unrealized Gains (Losses)	28	(240)	3	(19)
Purchases	(33)	(49)	(22)	(75)
Sales	5	2	18	25
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	(5)	349	10	136
Ending balance	26	112	26	112	17
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	0	240	(3)	20
Trading Liabilities | Obligation to Return Securities Received as Collateral
Liabilities
Beginning balance	1	33	1	33	33
Realized and Unrealized Gains (Losses)	0	0	0	0
Purchases	(1)	(30)	(1)	(30)
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Net Transfers	0	0	0	0
Ending balance	0	3	0	3	$ 1
Unrealized Gains (Losses) for Level 3 Liabilities Outstanding	$ 0	$ 0	$ 0	$ 0

XML

Fair Value Disclosures (Quantitative Information about and Sensitivity of Significant Unobservable Inputs Used in Recurring Level 3 Fair Value Measurements) (Details) - Recurring - Level 3 $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016 USD ($) $ / MWh	Dec. 31, 2015 USD ($) $ / MWh
Residential Mortgage-backed Securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 216	$ 341
Residential Mortgage-backed Securities | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price	0.00%	0.00%
Residential Mortgage-backed Securities | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price	79.00%	75.00%
Residential Mortgage-backed Securities | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	20.00%	32.00%
Commercial Mortgage-backed Securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 51	$ 72
Commercial Mortgage-backed Securities | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price	0.00%	0.00%
Commercial Mortgage-backed Securities | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price	7.00%	9.00%
Commercial Mortgage-backed Securities | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	1.00%	2.00%
Asset-backed Securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 88
Asset-backed Securities | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price	45.00%
Asset-backed Securities | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price	55.00%
Asset-backed Securities | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	46.00%
Corporate Bonds
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 276	$ 267
Corporate Bonds | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price	3.00%	3.00%
EBITDA Multiple	5	7
Corporate Bonds | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price	135.00%	119.00%
EBITDA Multiple	10	9
Corporate Bonds | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	91.00%	90.00%
EBITDA Multiple	7	8
Corporate Bonds | Structured bond model
Fair Value Inputs
Discount Rate		15.00%
Corporate Bonds | Structured bond model | Weighted Average
Fair Value Inputs
Discount Rate		15.00%
Collateralized Debt and Loan Obligations
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 109	$ 430
Collateralized Debt and Loan Obligations | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price	20.00%	47.00%
Collateralized Debt and Loan Obligations | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price	95.00%	103.00%
Collateralized Debt and Loan Obligations | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	57.00%	67.00%
Collateralized Debt and Loan Obligations | Correlation Model | Minimum
Fair Value Inputs
Credit Correlation	29.00%	39.00%
Collateralized Debt and Loan Obligations | Correlation Model | Maximum
Fair Value Inputs
Credit Correlation	61.00%	60.00%
Collateralized Debt and Loan Obligations | Correlation Model | Weighted Average
Fair Value Inputs
Credit Correlation	42.00%	49.00%
Loans and Lending Commitments
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 5,418	$ 5,936
Loans and Lending Commitments | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Loan Price	43.00%	35.00%
Loans and Lending Commitments | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Loan Price	100.00%	100.00%
Loans and Lending Commitments | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Loan Price	87.00%	88.00%
Loans and Lending Commitments | Discounted Cash Flow | Minimum
Fair Value Inputs
Implied Weighted Average Cost of Capital	5.00%	6.00%
Capitalization Rate	4.00%	4.00%
Loans and Lending Commitments | Discounted Cash Flow | Maximum
Fair Value Inputs
Implied Weighted Average Cost of Capital	6.00%	8.00%
Capitalization Rate	10.00%	10.00%
Loans and Lending Commitments | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Implied Weighted Average Cost of Capital	6.00%	7.00%
Capitalization Rate	4.00%	4.00%
Loans and Lending Commitments | Corporate Loan Model | Minimum
Fair Value Inputs
Credit Spread	4.82%	2.50%
Loans and Lending Commitments | Corporate Loan Model | Maximum
Fair Value Inputs
Credit Spread	8.98%	8.66%
Loans and Lending Commitments | Corporate Loan Model | Weighted Average
Fair Value Inputs
Credit Spread	5.96%	5.31%
Loans and Lending Commitments | Margin Loan Model | Minimum
Fair Value Inputs
Discount Rate	1.00%	1.00%
Credit Spread	0.31%	0.62%
Volatility Skew	20.00%	14.00%
Loans and Lending Commitments | Margin Loan Model | Maximum
Fair Value Inputs
Discount Rate	8.00%	4.00%
Credit Spread	1.02%	4.99%
Volatility Skew	46.00%	70.00%
Loans and Lending Commitments | Margin Loan Model | Weighted Average
Fair Value Inputs
Discount Rate	3.00%	2.00%
Credit Spread	0.86%	1.45%
Volatility Skew	32.00%	33.00%
Loans and Lending Commitments | Option Model
Fair Value Inputs
Volatility Skew	(1.00%)	(1.00%)
Loans and Lending Commitments | Option Model | Weighted Average
Fair Value Inputs
Volatility Skew	(1.00%)	(1.00%)
Loans and Lending Commitments | Expected recovery | Minimum
Fair Value Inputs
Asset coverage	47.00%
Loans and Lending Commitments | Expected recovery | Maximum
Fair Value Inputs
Asset coverage	99.00%
Loans and Lending Commitments | Expected recovery | Weighted Average
Fair Value Inputs
Asset coverage	90.00%
Other Debt
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 528	$ 448
Other Debt | Comparable Pricing
Fair Value Inputs
Comparable Bond Price	7.00%	8.00%
Other Debt | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Loan Price	3.00%	4.00%
Other Debt | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Loan Price	84.00%	84.00%
Other Debt | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	7.00%	8.00%
Comparable Loan Price	66.00%	59.00%
Other Debt | Discounted Cash Flow | Minimum
Fair Value Inputs
Discount Rate	10.00%
Other Debt | Discounted Cash Flow | Maximum
Fair Value Inputs
Discount Rate	13.00%
Other Debt | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Discount Rate	12.00%
Other Debt | Margin Loan Model
Fair Value Inputs
Discount Rate		1.00%
Other Debt | Margin Loan Model | Minimum
Fair Value Inputs
Discount Rate	1.00%
Other Debt | Margin Loan Model | Maximum
Fair Value Inputs
Discount Rate	2.00%
Other Debt | Margin Loan Model | Weighted Average
Fair Value Inputs
Discount Rate	2.00%	1.00%
Other Debt | Option Model | Minimum
Fair Value Inputs
At the Money Volatility	16.00%	16.00%
Other Debt | Option Model | Maximum
Fair Value Inputs
At the Money Volatility	53.00%	53.00%
Other Debt | Option Model | Weighted Average
Fair Value Inputs
At the Money Volatility	53.00%	53.00%
Corporate Equities
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 572	$ 433
Corporate Equities | Comparable Pricing
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Corporate Equities | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Price		50.00%
Corporate Equities | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Price		80.00%
Corporate Equities | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Comparable Price		72.00%
Corporate Equities | Market Approach
Fair Value Inputs
EBITDA Multiple		9
Corporate Equities | Market Approach | Weighted Average
Fair Value Inputs
EBITDA Multiple		9
Interest Rate Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ (235)	$ 260
Interest Rate Contracts | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price	95.00%
Interest Rate Contracts | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price	100.00%
Interest Rate Contracts | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price	96.00%
Interest Rate Contracts | Option Model
Fair Value Inputs
Interest rate curve	1.00%
Inflation Volatility		58.00%
Interest Rate Contracts | Option Model | Minimum
Fair Value Inputs
Interest Rate Volatility Concentration Liquidity Multiple		0
Interest Rate Volatility Skew	34.00%	29.00%
Interest Rate Quanto Correlation	(8.00%)	(8.00%)
Interest Rate - Foreign Exchange Correlation	25.00%	25.00%
Interest Rate - Inflation Correlation	(24.00%)	(41.00%)
Callable Discount	3.00%
Inflation Volatility	0.00%
Interest Rate Curve Correlation	19.00%	24.00%
Foreign exchange volatility skew	0.00%
Interest Rate Contracts | Option Model | Maximum
Fair Value Inputs
Interest Rate Volatility Concentration Liquidity Multiple		3
Interest Rate Volatility Skew	143.00%	82.00%
Interest Rate Quanto Correlation	35.00%	36.00%
Interest Rate - Foreign Exchange Correlation	55.00%	62.00%
Interest Rate - Inflation Correlation	(44.00%)	(39.00%)
Callable Discount	25.00%
Inflation Volatility	1.00%
Interest Rate Curve Correlation	95.00%	95.00%
Foreign exchange volatility skew	11.00%
Interest Rate Contracts | Option Model | Weighted Average
Fair Value Inputs
Interest Rate Volatility Concentration Liquidity Multiple		2
Interest Rate Contracts | Option Model | Simple Average
Fair Value Inputs
Interest Rate Volatility Skew	78.00%	43.00%
Interest rate curve	1.00%
Interest Rate Quanto Correlation	2.00%	5.00%
Interest Rate - Foreign Exchange Correlation	42.00%	43.00%
Interest Rate - Inflation Correlation	(34.00%)	(41.00%)
Callable Discount	14.00%
Inflation Volatility	1.00%	58.00%
Interest Rate Curve Correlation	71.00%	60.00%
Foreign exchange volatility skew	4.00%
Interest Rate Contracts | Option Model | Median
Fair Value Inputs
Interest Rate Volatility Skew	77.00%	40.00%
Interest rate curve	1.00%
Interest Rate Quanto Correlation	(7.00%)	(6.00%)
Interest Rate - Foreign Exchange Correlation	42.00%	43.00%
Interest Rate - Inflation Correlation	(33.00%)	(41.00%)
Callable Discount	14.00%
Inflation Volatility	1.00%	58.00%
Interest Rate Curve Correlation	76.00%	69.00%
Foreign exchange volatility skew	6.00%
Credit Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ (1,114)	$ (844)
Credit Contracts | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Bond Price (Lower Higher)	0.00%	0.00%
Cash Synthetic Basis	5.00%	5.00%
Credit Contracts | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Bond Price (Lower Higher)	85.00%	75.00%
Cash Synthetic Basis	12.00%	12.00%
Credit Contracts | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Bond Price (Lower Higher)	26.00%	24.00%
Cash Synthetic Basis	10.00%	9.00%
Credit Contracts | Correlation Model | Minimum
Fair Value Inputs
Credit Correlation	29.00%	39.00%
Credit Contracts | Correlation Model | Maximum
Fair Value Inputs
Credit Correlation	92.00%	97.00%
Credit Contracts | Correlation Model | Weighted Average
Fair Value Inputs
Credit Correlation	49.00%	57.00%
Foreign Exchange Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ (1)	$ 141
Foreign Exchange Contracts | Option Model
Fair Value Inputs
Interest rate curve	0.00%	0.00%
Foreign Exchange Contracts | Option Model | Minimum
Fair Value Inputs
Interest Rate Volatility Skew	34.00%	29.00%
Interest Rate - Foreign Exchange Correlation	25.00%	25.00%
Callable Discount	19.00%
Foreign Exchange Contracts | Option Model | Maximum
Fair Value Inputs
Interest Rate Volatility Skew	143.00%	82.00%
Interest Rate - Foreign Exchange Correlation	55.00%	62.00%
Callable Discount	94.00%
Foreign Exchange Contracts | Option Model | Simple Average
Fair Value Inputs
Interest Rate Volatility Skew	78.00%	43.00%
Interest rate curve	0.00%	0.00%
Interest Rate - Foreign Exchange Correlation	42.00%	43.00%
Callable Discount	73.00%
Foreign Exchange Contracts | Option Model | Median
Fair Value Inputs
Interest Rate Volatility Skew	77.00%	40.00%
Interest rate curve	0.00%	0.00%
Interest Rate - Foreign Exchange Correlation	42.00%	43.00%
Callable Discount	81.00%
Equity Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ (1,473)	$ (2,031)
Equity Contracts | Option Model | Minimum
Fair Value Inputs
At the Money Volatility	6.00%	16.00%
Volatility Skew	(4.00%)	(3.00%)
Equity - Equity Correlation	40.00%	40.00%
Equity - Foreign Exchange Correlation	(70.00%)	(60.00%)
Equity - Interest Rate Correlation	(7.00%)	(29.00%)
Equity Contracts | Option Model | Maximum
Fair Value Inputs
At the Money Volatility	81.00%	65.00%
Volatility Skew	0.00%	0.00%
Equity - Equity Correlation	98.00%	99.00%
Equity - Foreign Exchange Correlation	(31.00%)	(11.00%)
Equity - Interest Rate Correlation	50.00%	50.00%
Equity Contracts | Option Model | Weighted Average
Fair Value Inputs
At the Money Volatility	35.00%	32.00%
Volatility Skew	(1.00%)	(1.00%)
Equity - Equity Correlation	79.00%	71.00%
Equity - Foreign Exchange Correlation	(42.00%)	(39.00%)
Equity Contracts | Option Model | Simple Average
Fair Value Inputs
Equity - Interest Rate Correlation	19.00%	16.00%
Equity Contracts | Option Model | Median
Fair Value Inputs
Equity - Interest Rate Correlation	12.00%	8.00%
Commodity Contracts
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 1,298	$ 1,050
Commodity Contracts | Option Model | Minimum
Fair Value Inputs
Forward Power Price (per megawatt hour) | $ / MWh	2	3
Commodity Volatility	6.00%	10.00%
Cross Commodity Correlation	5.00%	43.00%
Commodity Contracts | Option Model | Maximum
Fair Value Inputs
Forward Power Price (per megawatt hour) | $ / MWh	95	91
Commodity Volatility	90.00%	92.00%
Cross Commodity Correlation	99.00%	99.00%
Commodity Contracts | Option Model | Weighted Average
Fair Value Inputs
Forward Power Price (per megawatt hour) | $ / MWh	34	32
Commodity Volatility	18.00%	18.00%
Cross Commodity Correlation	93.00%	93.00%
Principal Investments
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 769	$ 486
Principal Investments | Comparable Pricing | Minimum
Fair Value Inputs
Comparable Equity Price	43.00%	43.00%
Principal Investments | Comparable Pricing | Maximum
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Principal Investments | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Equity Price	82.00%	81.00%
Principal Investments | Discounted Cash Flow
Fair Value Inputs
Implied Weighted Average Cost of Capital		16.00%
Principal Investments | Discounted Cash Flow | Minimum
Fair Value Inputs
Implied Weighted Average Cost of Capital	13.00%
Exit Multiple	8	8
Capitalization Rate		5.00%
Equity Discount Rate		20.00%
Principal Investments | Discounted Cash Flow | Maximum
Fair Value Inputs
Implied Weighted Average Cost of Capital	16.00%
Exit Multiple	23	14
Capitalization Rate		9.00%
Equity Discount Rate		35.00%
Principal Investments | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Implied Weighted Average Cost of Capital	15.00%	16.00%
Exit Multiple	9	9
Capitalization Rate		6.00%
Equity Discount Rate		26.00%
Principal Investments | Market Approach | Minimum
Fair Value Inputs
EBITDA Multiple	6	8
Forward capacity price | $ / MWh	4	5
Principal Investments | Market Approach | Maximum
Fair Value Inputs
EBITDA Multiple	25	20
Forward capacity price | $ / MWh	9	9
Principal Investments | Market Approach | Weighted Average
Fair Value Inputs
EBITDA Multiple	12	11
Forward capacity price | $ / MWh	7	7
Other Investments
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Assets	$ 205	$ 221
Other Investments | Comparable Pricing
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Other Investments | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Other Investments | Discounted Cash Flow
Fair Value Inputs
Implied Weighted Average Cost of Capital	9.00%	10.00%
Exit Multiple	13	13
Other Investments | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Implied Weighted Average Cost of Capital	9.00%	10.00%
Exit Multiple	13	13
Other Investments | Market Approach | Minimum
Fair Value Inputs
EBITDA Multiple	6	7
Other Investments | Market Approach | Maximum
Fair Value Inputs
EBITDA Multiple	13	14
Other Investments | Market Approach | Weighted Average
Fair Value Inputs
EBITDA Multiple	12	12
Securities Sold under agreements to repurchase
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Liabilities	$ 150	$ 151
Securities Sold under agreements to repurchase | Discounted Cash Flow | Minimum
Fair Value Inputs
Funding Spread	1.17%	0.86%
Securities Sold under agreements to repurchase | Discounted Cash Flow | Maximum
Fair Value Inputs
Funding Spread	1.23%	1.16%
Securities Sold under agreements to repurchase | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Funding Spread	1.20%	1.05%
Other Secured Financings
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Liabilities	$ 441	$ 461
Other Secured Financings | Discounted Cash Flow
Fair Value Inputs
Discount Rate	4.00%
Other Secured Financings | Discounted Cash Flow | Minimum
Fair Value Inputs
Discount Rate		4.00%
Funding Spread	1.01%	0.95%
Other Secured Financings | Discounted Cash Flow | Maximum
Fair Value Inputs
Discount Rate		13.00%
Funding Spread	1.26%	1.13%
Other Secured Financings | Discounted Cash Flow | Weighted Average
Fair Value Inputs
Discount Rate	4.00%	4.00%
Funding Spread	1.14%	1.04%
Other Secured Financings | Option Model
Fair Value Inputs
Volatility Skew	(1.00%)	(1.00%)
Other Secured Financings | Option Model | Weighted Average
Fair Value Inputs
Volatility Skew	(1.00%)	(1.00%)
Long-term borrowings
Fair Value Inputs, Assets and Liabilities, Quantitative Information
Liabilities	$ 1,929	$ 1,987
Long-term borrowings | Comparable Pricing
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Long-term borrowings | Comparable Pricing | Weighted Average
Fair Value Inputs
Comparable Equity Price	100.00%	100.00%
Long-term borrowings | Correlation Model | Minimum
Fair Value Inputs
Credit Correlation	33.00%	40.00%
Long-term borrowings | Correlation Model | Maximum
Fair Value Inputs
Credit Correlation	61.00%	60.00%
Long-term borrowings | Correlation Model | Weighted Average
Fair Value Inputs
Credit Correlation	44.00%	52.00%
Long-term borrowings | Option Model
Fair Value Inputs
Interest Rate Volatility Skew		50.00%
Interest Rate - Foreign Exchange Correlation	53.00%
Equity volatility discount rate		10.00%
Long-term borrowings | Option Model | Minimum
Fair Value Inputs
At the Money Volatility	6.00%	20.00%
Interest Rate - Credit Spread Correlation	(52.00%)
Volatility Skew	(2.00%)	(1.00%)
Equity - Equity Correlation	50.00%	40.00%
Equity - Foreign Exchange Correlation	(50.00%)	(70.00%)
Interest Rate Curve Correlation	40.00%
Interest Rate - Equity Correlation	7.00%
Long-term borrowings | Option Model | Maximum
Fair Value Inputs
At the Money Volatility	48.00%	50.00%
Interest Rate - Credit Spread Correlation	3.00%
Volatility Skew	0.00%	0.00%
Equity - Equity Correlation	98.00%	97.00%
Equity - Foreign Exchange Correlation	11.00%	(11.00%)
Interest Rate Curve Correlation	87.00%
Interest Rate - Equity Correlation	44.00%
Long-term borrowings | Option Model | Weighted Average
Fair Value Inputs
At the Money Volatility	29.00%	29.00%
Interest Rate Volatility Skew		50.00%
Volatility Skew	(1.00%)	(1.00%)
Equity - Equity Correlation	75.00%	77.00%
Equity - Foreign Exchange Correlation	(25.00%)	(39.00%)
Equity volatility discount rate		10.00%
Long-term borrowings | Option Model | Simple Average
Fair Value Inputs
Interest Rate - Credit Spread Correlation	(24.00%)
Interest Rate - Foreign Exchange Correlation	53.00%
Interest Rate Curve Correlation	73.00%
Interest Rate - Equity Correlation	26.00%
Long-term borrowings | Option Model | Median
Fair Value Inputs
Interest Rate - Credit Spread Correlation	(23.00%)
Interest Rate - Foreign Exchange Correlation	53.00%
Interest Rate Curve Correlation	78.00%
Interest Rate - Equity Correlation	26.00%

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Fair Value Disclosures (Fair Value of Investments Measured at Net Asset Value) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value of Investments that Calculate Net Asset Value
Fair Value	$ 3,246	$ 3,843
Commitment	510	670
Private Equity Funds
Fair Value of Investments that Calculate Net Asset Value
Fair Value	1,698	1,917
Commitment	395	538
Real Estate Funds
Fair Value of Investments that Calculate Net Asset Value
Fair Value	1,228	1,337
Commitment	111	128
Hedge Funds
Fair Value of Investments that Calculate Net Asset Value
Fair Value	320	589
Commitment	$ 4	$ 4

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Fair Value Disclosures (Fair Value of Equity Fund and Hedge Fund) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value of Investments that Calculate Net Asset Value
Fair Value, Investments	$ 3,246	$ 3,843
Private Equity Funds
Fair Value of Investments that Calculate Net Asset Value
Fair value of investment to be liquidated (less than 5 years)	128
Fair value of investment to be liquidated (5-10 years)	911
Fair value of investment to be liquidated (Over 10 years)	659
Fair Value, Investments	1,698	1,917
Real Estate Funds
Fair Value of Investments that Calculate Net Asset Value
Fair value of investment to be liquidated (less than 5 years)	94
Fair value of investment to be liquidated (5-10 years)	669
Fair value of investment to be liquidated (Over 10 years)	465
Fair Value, Investments	1,228	1,337
Hedge Funds
Fair Value of Investments that Calculate Net Asset Value
Fair Value, Investments	$ 320	$ 589
Percent of investments redeemable at least quarterly	55.00%
Percent of investments redeemable every six months	20.00%
Percent of investments redeemable greater than six months	19.00%

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Fair Value Disclosures (Net Gains (Losses) Due to Changes in Fair Value for Items Measured at Fair Value Pursuant to the Fair Value Option Election) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Securities purchased under agreements to resell
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	$ 1	$ 3	$ 3	$ 2
Deposits
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(2)	0	(4)	0
Short-term borrowings
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(9)	(2)	36	(42)
Securities Sold under agreements to repurchase
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(6)	4	(17)	1
Long-term borrowings
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(1,419)	14	(2,523)	819
Trading | Securities purchased under agreements to resell
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(1)	(2)	(1)	(3)
Trading | Deposits
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(1)	0	(3)	0
Trading | Short-term borrowings
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(9)	(2)	36	(42)
Trading | Securities Sold under agreements to repurchase
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(3)	6	(12)	4
Trading | Long-term borrowings
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(1,289)	152	(2,254)	1,089
Interest Income (Expense) | Securities purchased under agreements to resell
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	2	5	4	5
Interest Income (Expense) | Deposits
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(1)	0	(1)	0
Interest Income (Expense) | Short-term borrowings
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	0	0	0	0
Interest Income (Expense) | Securities Sold under agreements to repurchase
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	(3)	(2)	(5)	(3)
Interest Income (Expense) | Long-term borrowings
Fair Value Option Quantitative Disclosures
Gains (losses) due to changes in fair value	$ (130)	$ (138)	$ (269)	$ (270)

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Fair Value Disclosures (Short-term and Long-term Borrowings) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term and long-term borrowing, fair value	$ 38,315	$ 34,693
Equity
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term and long-term borrowing, fair value	19,696	17,789
Interest Rates
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term and long-term borrowing, fair value	16,728	14,255
Credit and Foreign Exchange Contracts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term and long-term borrowing, fair value	1,570	2,266
Commodities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term and long-term borrowing, fair value	$ 321	$ 383

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Fair Value Disclosures (Gains (Losses) Due to Changes in Instrument Specific Credit Risk) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Short-term and Long-term Borrowings | Trading revenues
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	$ 0	$ 182	$ 41	$ 307
Short-term and Long-term Borrowings | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	226	0	545	0
Securities sold under agreements to repurchase | Trading revenues
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	0	0	0	0
Securities sold under agreements to repurchase | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	(1)	0	3	0
Loans and other debt | Trading revenues
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	(14)	(6)	(114)	71
Loans and other debt | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	0	0	0	0
Lending Commitments | Trading revenues
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	2	(1)	3	8
Lending Commitments | OCI
Fair Value disclosure
Gains (losses) due to changes in instrument specific credit risk	$ 0	$ 0	$ 0	$ 0

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Fair Value Disclosures (Net Difference between Contractual Principal Amount and Fair Value) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value Disclosures
Loans and other debt	$ 15,046	$ 14,095
Loans 90 or more days past due and/or on non-accrual status	12,867	11,651
Short-term and long-term debt borrowings	311	508
Aggregate fair value of loans in non-accrual status including all loans 90 or more days past due	1,717	1,853
Amounts past due 90 days or greater (unpaid principal balance)	$ 514	$ 885

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Fair Value Disclosures (Assets Measured at Fair Value on a Nonrecurring Basis) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Assets
Loans	$ 77,283		$ 77,283		$ 72,559
Intangible assets	2,833		2,833		2,984
Other assets	51,526		51,526		51,087
Liabilities
Other liabilities and accrued expenses	14,112		14,112		18,711
Liabilities	750,498		750,498		711,281
Fair Value
Other assets - Other investments	80,293		80,293		71,947
Intangible assets	3		3		$ 5
Nonrecurring
Assets
Loans	6,700	$ 3,244	6,700	$ 3,244
Other assets - Other investments	82	0	82	0
Other assets - Premises, equipment and software costs	0	0	0	0
Total carrying value	6,782	3,244	6,782	3,244
Liabilities
Other liabilities and accrued expenses	402	283	402	283
Liabilities	402	283	402	283
Nonrecurring | Loans
Fair Value
Gains (losses) in fair value adjustment	(34)	47	(131)	8
Nonrecurring | Other Investments
Fair Value
Gains (losses) in fair value adjustment	(38)	0	(40)	(2)
Nonrecurring | Premises, Equipment and Software Costs
Fair Value
Gains (losses) in fair value adjustment	(22)	(2)	(27)	(22)
Nonrecurring | Assets Total
Fair Value
Gains (losses) in fair value adjustment	(94)	45	(198)	(16)
Nonrecurring | Other liabilities and accrued expenses
Fair Value
Gains (losses) in fair value adjustment	13	(45)	24	(48)
Nonrecurring | Liabilities Total
Fair Value
Gains (losses) in fair value adjustment	13	(45)	24	(48)
Nonrecurring | Level 1
Fair Value
Loans	0	0	0	0
Other assets - Other investments	0	0	0	0
Other assets - Premises, equipment and software costs	0	0	0	0
Total assets	0	0	0	0
Other Liabilities and accrued expenses	0	0	0	0
Total liabilities	0	0	0	0
Nonrecurring | Level 2
Fair Value
Loans	4,276	2,458	4,276	2,458
Other assets - Other investments	0	0	0	0
Other assets - Premises, equipment and software costs	0	0	0	0
Total assets	4,276	2,458	4,276	2,458
Other Liabilities and accrued expenses	331	244	331	244
Total liabilities	331	244	331	244
Nonrecurring | Level 3
Fair Value
Loans	2,424	786	2,424	786
Other assets - Other investments	82	0	82	0
Other assets - Premises, equipment and software costs	0	0	0	0
Total assets	2,506	786	2,506	786
Other Liabilities and accrued expenses	71	39	71	39
Total liabilities	$ 71	$ 39	$ 71	$ 39

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Fair Value Disclosures (Financial Instruments Not Measured at FV) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Financial Assets:
Cash and due from banks	$ 27,597	$ 19,827	$ 19,145
Interest bearing deposits with banks	28,536	34,256	$ 27,214
Securities purchased under agreements to resell	97,589	87,657
Securities borrowed	131,281	142,416
Customer and other receivables	52,827	45,407
Loans	77,283	72,559
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	32,771	31,469
Financial Liabilities
Deposits	152,693	156,034
Short-term borrowings	880	2,173
Securities sold under agreement to repurchase	50,328	36,692
Securities loaned	17,241	19,358
Other secured financings	9,901	9,464
Customer and other payables	201,189	186,626
Long-term borrowings	163,492	153,768
Additional Disclosures
Lending commitment notional amount	93,800	99,500
lending commitment fair value liability	1,841	2,172
Carrying Value
Financial Assets:
Cash and due from banks	27,597	19,827
Interest bearing deposits with banks	28,536	34,256
Investment securities - HTM securities	12,418	5,224
Securities purchased under agreements to resell	97,034	86,851
Securities borrowed	131,281	142,416
Customer and other receivables	48,910	41,676
Loans	93,165	85,759
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	32,771	31,469
Financial Liabilities
Deposits	152,598	155,909
Short-term borrowings	369	525
Securities sold under agreement to repurchase	49,629	36,009
Securities loaned	17,241	19,358
Other secured financings	6,980	6,610
Customer and other payables	197,978	183,895
Long-term borrowings	125,688	120,723
Fair Value
Financial Assets:
Cash and due from banks	27,597	19,827
Interest bearing deposits with banks	28,536	34,256
Investment securities - HTM securities	12,567	5,188
Securities purchased under agreements to resell	97,042	86,837
Securities borrowed	131,282	142,414
Customer and other receivables	48,815	41,576
Loans	94,151	86,423
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	32,771	31,469
Financial Liabilities
Deposits	152,788	156,163
Short-term borrowings	369	525
Securities sold under agreement to repurchase	49,692	36,060
Securities loaned	17,262	19,382
Other secured financings	6,991	6,610
Customer and other payables	197,978	183,895
Long-term borrowings	127,189	123,219
Fair Value | Level 1
Financial Assets:
Cash and due from banks	27,597	19,827
Interest bearing deposits with banks	28,536	34,256
Investment securities - HTM securities	3,758	998
Securities purchased under agreements to resell	0	0
Securities borrowed	0	0
Customer and other receivables	0	0
Loans	0	0
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	32,771	31,469
Financial Liabilities
Deposits	0	0
Short-term borrowings	0	0
Securities sold under agreement to repurchase	0	0
Securities loaned	0	0
Other secured financings	0	0
Customer and other payables	0	0
Long-term borrowings	0	0
Fair Value | Level 2
Financial Assets:
Cash and due from banks	0	0
Interest bearing deposits with banks	0	0
Investment securities - HTM securities	8,809	4,190
Securities purchased under agreements to resell	95,140	86,186
Securities borrowed	131,156	142,266
Customer and other receivables	44,033	36,752
Loans	25,289	19,241
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	0	0
Financial Liabilities
Deposits	152,788	156,163
Short-term borrowings	369	525
Securities sold under agreement to repurchase	48,033	34,150
Securities loaned	17,262	19,192
Other secured financings	5,596	5,333
Customer and other payables	197,978	183,895
Long-term borrowings	127,189	123,219
Additional Disclosures
lending commitment fair value liability	1,610	1,791
Fair Value | Level 3
Financial Assets:
Cash and due from banks	0	0
Interest bearing deposits with banks	0	0
Investment securities - HTM securities	0	0
Securities purchased under agreements to resell	1,902	651
Securities borrowed	126	148
Customer and other receivables	4,782	4,824
Loans	68,862	67,182
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	0	0
Financial Liabilities
Deposits	0	0
Short-term borrowings	0	0
Securities sold under agreement to repurchase	1,659	1,910
Securities loaned	0	190
Other secured financings	1,395	1,277
Customer and other payables	0	0
Long-term borrowings	0	0
Additional Disclosures
lending commitment fair value liability	$ 231	$ 381

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Derivative Instruments and Hedging Activities (Fair Value, Notional and Offsetting of Derivative Assets and Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Derivative Assets
Total derivatives	$ 614,594	$ 471,578
Cash collateral netting	(60,447)	(51,372)
Counterparty netting	(515,989)	(391,593)
Net amounts presented in the Consolidated Statements of Financial Condition	38,158	28,613
Amounts not offset against financial instruments collateral	(12,011)	(9,190)
Amounts not offset against other cash collateral	(23)	(9)
Net exposure	26,124	19,414
Derivative Liabilities
Total derivatives	593,642	457,350
Cash collateral netting	(40,330)	(36,283)
Counterparty netting	(515,989)	(391,593)
Net amounts presented in the Consolidated Statements of Financial Condition	37,323	29,474
Amounts not offset against financial instruments collateral	(12,023)	(5,789)
Amounts not offset against other cash collateral	(51)	(5)
Net exposure	25,249	23,680
Derivatives, Notional Amount
Derivative assets	15,501,469	14,749,210
Derivative liabilities	14,195,125	14,074,223
Bilateral OTC
Derivative Assets
Total derivatives	414,639	340,573
Cash collateral netting	(60,352)	(50,335)
Counterparty netting	(321,553)	(265,707)
Net amounts presented in the Consolidated Statements of Financial Condition	32,734	24,531
Amounts not offset against financial instruments collateral	(12,011)	(9,190)
Amounts not offset against other cash collateral	(23)	(9)
Net exposure	20,700	15,332
Derivative Liabilities
Total derivatives	393,389	324,671
Cash collateral netting	(38,378)	(33,332)
Counterparty netting	(321,553)	(265,707)
Net amounts presented in the Consolidated Statements of Financial Condition	33,458	25,632
Amounts not offset against financial instruments collateral	(11,509)	(5,384)
Amounts not offset against other cash collateral	(10)	(5)
Net exposure	21,939	20,243
Derivatives, Notional Amount
Derivative assets	6,677,620	7,273,921
Derivative liabilities	6,406,054	6,864,262
Cleared OTC
Derivative Assets
Total derivatives	175,277	106,623
Cash collateral netting	(95)	(1,037)
Counterparty netting	(173,222)	(104,294)
Net amounts presented in the Consolidated Statements of Financial Condition	1,960	1,292
Amounts not offset against financial instruments collateral	0	0
Amounts not offset against other cash collateral	0	0
Net exposure	1,960	1,292
Derivative Liabilities
Total derivatives	175,454	108,063
Cash collateral netting	(1,952)	(2,951)
Counterparty netting	(173,222)	(104,294)
Net amounts presented in the Consolidated Statements of Financial Condition	280	818
Amounts not offset against financial instruments collateral	0	0
Amounts not offset against other cash collateral	(41)	0
Net exposure	239	818
Derivatives, Notional Amount
Derivative assets	6,823,193	5,936,757
Derivative liabilities	6,690,856	5,837,356
Exchange Traded
Derivative Assets
Total derivatives	24,678	24,382
Cash collateral netting	0	0
Counterparty netting	(21,214)	(21,592)
Net amounts presented in the Consolidated Statements of Financial Condition	3,464	2,790
Amounts not offset against financial instruments collateral	0	0
Amounts not offset against other cash collateral	0	0
Net exposure	3,464	2,790
Derivative Liabilities
Total derivatives	24,799	24,616
Cash collateral netting	0	0
Counterparty netting	(21,214)	(21,592)
Net amounts presented in the Consolidated Statements of Financial Condition	3,585	3,024
Amounts not offset against financial instruments collateral	(514)	(405)
Amounts not offset against other cash collateral	0	0
Net exposure	3,071	2,619
Derivatives, Notional Amount
Derivative assets	2,000,656	1,538,532
Derivative liabilities	1,098,215	1,372,605
Designated as Accounting Hedges
Derivative Assets
Total derivatives	7,211	4,434
Derivative Liabilities
Total derivatives	515	332
Derivatives, Notional Amount
Derivative assets	95,102	78,524
Derivative liabilities	9,069	18,488
Designated as Accounting Hedges | Bilateral OTC
Derivative Assets
Total derivatives	3,413	2,991
Derivative Liabilities
Total derivatives	492	76
Derivatives, Notional Amount
Derivative assets	36,798	42,995
Derivative liabilities	8,348	8,164
Designated as Accounting Hedges | Cleared OTC
Derivative Assets
Total derivatives	3,798	1,443
Derivative Liabilities
Total derivatives	23	256
Derivatives, Notional Amount
Derivative assets	58,304	35,529
Derivative liabilities	721	10,324
Designated as Accounting Hedges | Exchange Traded
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Designated as Accounting Hedges | Interest Rate Contracts
Derivative Assets
Total derivatives	7,123	4,267
Derivative Liabilities
Total derivatives	0	270
Derivatives, Notional Amount
Derivative assets	92,248	72,361
Derivative liabilities	32	13,429
Designated as Accounting Hedges | Interest Rate Contracts | Bilateral OTC
Derivative Assets
Total derivatives	3,325	2,825
Derivative Liabilities
Total derivatives	0	20
Derivatives, Notional Amount
Derivative assets	34,003	36,999
Derivative liabilities	0	3,560
Designated as Accounting Hedges | Interest Rate Contracts | Cleared OTC
Derivative Assets
Total derivatives	3,798	1,442
Derivative Liabilities
Total derivatives	0	250
Derivatives, Notional Amount
Derivative assets	58,245	35,362
Derivative liabilities	32	9,869
Designated as Accounting Hedges | Interest Rate Contracts | Exchange Traded
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Designated as Accounting Hedges | Foreign Exchange Contracts
Derivative Assets
Total derivatives	88	167
Derivative Liabilities
Total derivatives	515	62
Derivatives, Notional Amount
Derivative assets	2,854	6,163
Derivative liabilities	9,037	5,059
Designated as Accounting Hedges | Foreign Exchange Contracts | Bilateral OTC
Derivative Assets
Total derivatives	88	166
Derivative Liabilities
Total derivatives	492	56
Derivatives, Notional Amount
Derivative assets	2,795	5,996
Derivative liabilities	8,348	4,604
Designated as Accounting Hedges | Foreign Exchange Contracts | Cleared OTC
Derivative Assets
Total derivatives	0	1
Derivative Liabilities
Total derivatives	23	6
Derivatives, Notional Amount
Derivative assets	59	167
Derivative liabilities	689	455
Designated as Accounting Hedges | Foreign Exchange Contracts | Exchange Traded
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges
Derivative Assets
Total derivatives	607,383	467,144
Derivative Liabilities
Total derivatives	593,127	457,018
Derivatives, Notional Amount
Derivative assets	15,406,367	14,670,686
Derivative liabilities	14,186,056	14,055,735
Not Designated as Accounting Hedges | Bilateral OTC
Derivative Assets
Total derivatives	411,226	337,582
Derivative Liabilities
Total derivatives	392,897	324,595
Derivatives, Notional Amount
Derivative assets	6,640,822	7,230,926
Derivative liabilities	6,397,706	6,856,098
Not Designated as Accounting Hedges | Cleared OTC
Derivative Assets
Total derivatives	171,479	105,180
Derivative Liabilities
Total derivatives	175,431	107,807
Derivatives, Notional Amount
Derivative assets	6,764,889	5,901,228
Derivative liabilities	6,690,135	5,827,032
Not Designated as Accounting Hedges | Exchange Traded
Derivative Assets
Total derivatives	24,678	24,382
Derivative Liabilities
Total derivatives	24,799	24,616
Derivatives, Notional Amount
Derivative assets	2,000,656	1,538,532
Derivative liabilities	1,098,215	1,372,605
Not Designated as Accounting Hedges | Interest Rate Contracts
Derivative Assets
Total derivatives	456,451	321,777
Derivative Liabilities
Total derivatives	437,766	307,139
Derivatives, Notional Amount
Derivative assets	12,192,069	11,315,172
Derivative liabilities	10,974,102	10,790,071
Not Designated as Accounting Hedges | Interest Rate Contracts | Bilateral OTC
Derivative Assets
Total derivatives	287,757	220,289
Derivative Liabilities
Total derivatives	265,270	203,004
Derivatives, Notional Amount
Derivative assets	3,940,102	4,348,002
Derivative liabilities	3,654,941	4,030,039
Not Designated as Accounting Hedges | Interest Rate Contracts | Cleared OTC
Derivative Assets
Total derivatives	168,366	101,276
Derivative Liabilities
Total derivatives	172,084	103,852
Derivatives, Notional Amount
Derivative assets	6,615,199	5,748,525
Derivative liabilities	6,558,339	5,682,322
Not Designated as Accounting Hedges | Interest Rate Contracts | Exchange Traded
Derivative Assets
Total derivatives	328	212
Derivative Liabilities
Total derivatives	412	283
Derivatives, Notional Amount
Derivative assets	1,636,768	1,218,645
Derivative liabilities	760,822	1,077,710
Not Designated as Accounting Hedges | Credit Contracts
Derivative Assets
Total derivatives	16,461	22,919
Derivative Liabilities
Total derivatives	17,821	23,665
Derivatives, Notional Amount
Derivative assets	567,515	725,032
Derivative liabilities	605,635	693,415
Not Designated as Accounting Hedges | Credit Contracts | Bilateral OTC
Derivative Assets
Total derivatives	13,734	19,310
Derivative Liabilities
Total derivatives	14,888	19,942
Derivatives, Notional Amount
Derivative assets	434,478	585,731
Derivative liabilities	489,656	562,027
Not Designated as Accounting Hedges | Credit Contracts | Cleared OTC
Derivative Assets
Total derivatives	2,727	3,609
Derivative Liabilities
Total derivatives	2,933	3,723
Derivatives, Notional Amount
Derivative assets	133,037	139,301
Derivative liabilities	115,979	131,388
Not Designated as Accounting Hedges | Credit Contracts | Exchange Traded
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Foreign Exchange Contracts
Derivative Assets
Total derivatives	76,417	64,788
Derivative Liabilities
Total derivatives	78,110	65,288
Derivatives, Notional Amount
Derivative assets	1,889,300	1,928,407
Derivative liabilities	1,863,900	1,883,992
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Bilateral OTC
Derivative Assets
Total derivatives	75,891	64,438
Derivative Liabilities
Total derivatives	77,614	65,034
Derivatives, Notional Amount
Derivative assets	1,851,368	1,907,290
Derivative liabilities	1,837,572	1,868,015
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Cleared OTC
Derivative Assets
Total derivatives	386	295
Derivative Liabilities
Total derivatives	414	232
Derivatives, Notional Amount
Derivative assets	16,653	13,402
Derivative liabilities	15,817	13,322
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Exchange Traded
Derivative Assets
Total derivatives	140	55
Derivative Liabilities
Total derivatives	82	22
Derivatives, Notional Amount
Derivative assets	21,279	7,715
Derivative liabilities	10,511	2,655
Not Designated as Accounting Hedges | Equity Contracts
Derivative Assets
Total derivatives	42,529	40,289
Derivative Liabilities
Total derivatives	46,549	46,132
Derivatives, Notional Amount
Derivative assets	600,492	546,629
Derivative liabilities	604,611	562,000
Not Designated as Accounting Hedges | Equity Contracts | Bilateral OTC
Derivative Assets
Total derivatives	22,043	20,212
Derivative Liabilities
Total derivatives	25,633	25,708
Derivatives, Notional Amount
Derivative assets	341,039	316,770
Derivative liabilities	342,625	332,734
Not Designated as Accounting Hedges | Equity Contracts | Cleared OTC
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Equity Contracts | Exchange Traded
Derivative Assets
Total derivatives	20,486	20,077
Derivative Liabilities
Total derivatives	20,916	20,424
Derivatives, Notional Amount
Derivative assets	259,453	229,859
Derivative liabilities	261,986	229,266
Not Designated as Accounting Hedges | Commodity Contracts
Derivative Assets
Total derivatives	15,509	17,152
Derivative Liabilities
Total derivatives	12,779	14,751
Derivatives, Notional Amount
Derivative assets	155,856	149,762
Derivative liabilities	132,991	122,143
Not Designated as Accounting Hedges | Commodity Contracts | Bilateral OTC
Derivative Assets
Total derivatives	11,785	13,114
Derivative Liabilities
Total derivatives	9,390	10,864
Derivatives, Notional Amount
Derivative assets	72,700	67,449
Derivative liabilities	68,095	59,169
Not Designated as Accounting Hedges | Commodity Contracts | Cleared OTC
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Commodity Contracts | Exchange Traded
Derivative Assets
Total derivatives	3,724	4,038
Derivative Liabilities
Total derivatives	3,389	3,887
Derivatives, Notional Amount
Derivative assets	83,156	82,313
Derivative liabilities	64,896	62,974
Not Designated as Accounting Hedges | Other Contracts
Derivative Assets
Total derivatives	16	219
Derivative Liabilities
Total derivatives	102	43
Derivatives, Notional Amount
Derivative assets	1,135	5,684
Derivative liabilities	4,817	4,114
Not Designated as Accounting Hedges | Other Contracts | Bilateral OTC
Derivative Assets
Total derivatives	16	219
Derivative Liabilities
Total derivatives	102	43
Derivatives, Notional Amount
Derivative assets	1,135	5,684
Derivative liabilities	4,817	4,114
Not Designated as Accounting Hedges | Other Contracts | Cleared OTC
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	0	0
Not Designated as Accounting Hedges | Other Contracts | Exchange Traded
Derivative Assets
Total derivatives	0	0
Derivative Liabilities
Total derivatives	0	0
Derivatives, Notional Amount
Derivative assets	0	0
Derivative liabilities	$ 0	$ 0

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Derivative Instruments and Hedging Activities (Gains or Losses on Derivative Instruments, Related Hedge Items and Hedge Ineffectiveness) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Designated as Accounting Hedges | Interest Expense
Derivatives
Gains (Losses) on Fair Value Hedges Recognized	$ (24.0)	$ (38.0)	$ (163.0)	$ (123.0)
Designated as Accounting Hedges | Interest Expense | Derivatives
Derivatives
Gains (Losses) on Fair Value Hedges Recognized	969.0	(1,899.0)	3,119.0	(1,141.0)
Designated as Accounting Hedges | Interest Expense | Borrowings
Derivatives
Gains (Losses) on Fair Value Hedges Recognized	(993.0)	1,861.0	(3,282.0)	1,018.0
Not Designated as Accounting Hedges
Derivatives
Gains (Losses) Recognized in Income	2,746.0	2,791.0	4,811.0	6,316.0
Debt valuation adjustment	0.0	182.0	0.0	307.0
Total	2,746.0	2,973.0	4,811.0	6,623.0
Not Designated as Accounting Hedges | Interest Rate Contracts
Derivatives
Gains (Losses) Recognized in Income	320.0	355.0	626.0	925.0
Not Designated as Accounting Hedges | Foreign Exchange Contracts
Derivatives
Gains (Losses) Recognized in Income	362.0	170.0	599.0	515.0
Not Designated as Accounting Hedges | Equity security and index contracts
Derivatives
Gains (Losses) Recognized in Income	1,615.0	1,746.0	2,945.0	3,341.0
Not Designated as Accounting Hedges | Commodity and other contracts
Derivatives
Gains (Losses) Recognized in Income	20.0	140.0	(124.0)	816.0
Not Designated as Accounting Hedges | Credit Contracts
Derivatives
Gains (Losses) Recognized in Income	429.0	380.0	765.0	719.0
Net Investment Hedges | Designated as Accounting Hedges | Foreign Exchange Contracts
Derivatives
Gain (Losses) Recognized in OCI (effective portion)	(112.0)	(81.0)	(336.0)	181.0
Gain (loss) recognized in interest income related to amounts excluded from hedge effectiveness testing	$ (19.0)	$ (36.0)	$ (39.0)	$ (80.0)

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Derivative Instruments and Hedging Activities (Fair Value of OTC Derivatives in a Gain Position) (Details) - OTC - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Credit Derivatives
Years to maturity, less than 1	$ 24,088	$ 20,236
Years to maturity, 1 - 3	16,499	17,840
Years to maturity, 3 - 5	12,080	10,582
Years to maturity, over 5	65,875	49,174
Cross-maturity and cash collateral netting	(83,871)	(72,018)
Net exposure post-cash collateral	34,671	25,814
Net exposure post-collateral	22,660	16,624
AAA
Credit Derivatives
Years to maturity, less than 1	137	203
Years to maturity, 1 - 3	396	453
Years to maturity, 3 - 5	1,312	827
Years to maturity, over 5	4,360	3,665
Cross-maturity and cash collateral netting	(4,953)	(4,319)
Net exposure post-cash collateral	1,252	829
Net exposure post-collateral	1,175	715
AA
Credit Derivatives
Years to maturity, less than 1	3,156	2,689
Years to maturity, 1 - 3	1,502	2,000
Years to maturity, 3 - 5	1,814	1,876
Years to maturity, over 5	12,226	9,223
Cross-maturity and cash collateral netting	(12,717)	(10,981)
Net exposure post-cash collateral	5,981	4,807
Net exposure post-collateral	3,771	2,361
A
Credit Derivatives
Years to maturity, less than 1	11,078	9,748
Years to maturity, 1 - 3	7,607	8,191
Years to maturity, 3 - 5	5,336	4,774
Years to maturity, over 5	28,058	20,918
Cross-maturity and cash collateral netting	(38,694)	(34,916)
Net exposure post-cash collateral	13,385	8,715
Net exposure post-collateral	7,784	5,448
BBB
Credit Derivatives
Years to maturity, less than 1	5,794	3,614
Years to maturity, 1 - 3	4,489	4,863
Years to maturity, 3 - 5	2,622	1,948
Years to maturity, over 5	15,861	11,801
Cross-maturity and cash collateral netting	(19,993)	(15,086)
Net exposure post-cash collateral	8,773	7,140
Net exposure post-collateral	6,808	4,934
Non-investment grade
Credit Derivatives
Years to maturity, less than 1	3,923	3,982
Years to maturity, 1 - 3	2,505	2,333
Years to maturity, 3 - 5	996	1,157
Years to maturity, over 5	5,370	3,567
Cross-maturity and cash collateral netting	(7,514)	(6,716)
Net exposure post-cash collateral	5,280	4,323
Net exposure post-collateral	$ 3,122	$ 3,166

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Derivative Instruments and Hedging Activities (Credit Risk Related Contingencies) (Details) $ in Millions	Jun. 30, 2016 USD ($)
Derivatives
Aggregate fair value of derivative contracts that contain credit-risk-related contingent features that are in a net liability position	$ 28,999
Posted collateral	24,217
Bilateral arrangement
Derivatives
Amount of additional collateral or termination payments that could be called by counterparties	1,481
One-notch Downgrade
Derivatives
Amount of additional collateral or termination payments that could be called by counterparties	1,075
Two-notch Downgrade
Derivatives
Amount of additional collateral or termination payments that could be called by counterparties	$ 1,233

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Derivative Instruments and Hedging Activities (Credit Derivatives and Other Credit Derivatives) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Protection Sold
Credit Derivatives
Derivative notional amount	$ 567,634	$ 689,979
Credit risk derivative (assets) / liability, fair value	379	761
Protection Sold | Less than 1 Year
Credit Derivatives
Derivative notional amount	211,171	208,713
Protection Sold | 1 - 3 Years
Credit Derivatives
Derivative notional amount	200,984	298,137
Protection Sold | 3 - 5 Years
Credit Derivatives
Derivative notional amount	123,957	149,173
Protection Sold | Over 5 Years
Credit Derivatives
Derivative notional amount	31,522	33,956
Protection Sold | Credit Default Swaps
Credit Derivatives
Derivative notional amount	567,290	689,519
Credit risk derivative (assets) / liability, fair value	396	785
Protection Sold | Credit Default Swaps | Less than 1 Year
Credit Derivatives
Derivative notional amount	211,128	208,694
Protection Sold | Credit Default Swaps | 1 - 3 Years
Credit Derivatives
Derivative notional amount	200,959	298,030
Protection Sold | Credit Default Swaps | 3 - 5 Years
Credit Derivatives
Derivative notional amount	123,957	149,171
Protection Sold | Credit Default Swaps | Over 5 Years
Credit Derivatives
Derivative notional amount	31,246	33,624
Protection Sold | Single Name Credit Default Swaps
Credit Derivatives
Derivative notional amount	347,624	420,806
Credit risk derivative (assets) / liability, fair value	463	1,980
Protection Sold | Single Name Credit Default Swaps | Investment grade
Credit Derivatives
Derivative notional amount	247,107	299,670
Credit risk derivative (assets) / liability, fair value	(1,079)	(1,831)
Protection Sold | Single Name Credit Default Swaps | Non-investment grade
Credit Derivatives
Derivative notional amount	100,517	121,136
Credit risk derivative (assets) / liability, fair value	1,542	3,811
Protection Sold | Single Name Credit Default Swaps | Less than 1 Year
Credit Derivatives
Derivative notional amount	135,104	122,597
Protection Sold | Single Name Credit Default Swaps | Less than 1 Year | Investment grade
Credit Derivatives
Derivative notional amount	92,734	84,543
Protection Sold | Single Name Credit Default Swaps | Less than 1 Year | Non-investment grade
Credit Derivatives
Derivative notional amount	42,370	38,054
Protection Sold | Single Name Credit Default Swaps | 1 - 3 Years
Credit Derivatives
Derivative notional amount	132,696	194,728
Protection Sold | Single Name Credit Default Swaps | 1 - 3 Years | Investment grade
Credit Derivatives
Derivative notional amount	94,348	138,467
Protection Sold | Single Name Credit Default Swaps | 1 - 3 Years | Non-investment grade
Credit Derivatives
Derivative notional amount	38,348	56,261
Protection Sold | Single Name Credit Default Swaps | 3 - 5 Years
Credit Derivatives
Derivative notional amount	67,309	88,186
Protection Sold | Single Name Credit Default Swaps | 3 - 5 Years | Investment grade
Credit Derivatives
Derivative notional amount	48,928	63,754
Protection Sold | Single Name Credit Default Swaps | 3 - 5 Years | Non-investment grade
Credit Derivatives
Derivative notional amount	18,381	24,432
Protection Sold | Single Name Credit Default Swaps | Over 5 Years
Credit Derivatives
Derivative notional amount	12,515	15,295
Protection Sold | Single Name Credit Default Swaps | Over 5 Years | Investment grade
Credit Derivatives
Derivative notional amount	11,097	12,906
Protection Sold | Single Name Credit Default Swaps | Over 5 Years | Non-investment grade
Credit Derivatives
Derivative notional amount	1,418	2,389
Protection Sold | Total Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	219,666	268,713
Credit risk derivative (assets) / liability, fair value	(67)	(1,195)
Protection Sold | Total Index and Basket Credit Default Swaps | Investment grade
Credit Derivatives
Derivative notional amount	111,005	143,742
Credit risk derivative (assets) / liability, fair value	(1,222)	(1,977)
Protection Sold | Total Index and Basket Credit Default Swaps | Non-investment grade
Credit Derivatives
Derivative notional amount	108,661	124,971
Credit risk derivative (assets) / liability, fair value	1,155	782
Protection Sold | Total Index and Basket Credit Default Swaps | Less than 1 Year
Credit Derivatives
Derivative notional amount	76,024	86,097
Protection Sold | Total Index and Basket Credit Default Swaps | Less than 1 Year | Investment grade
Credit Derivatives
Derivative notional amount	24,110	33,507
Protection Sold | Total Index and Basket Credit Default Swaps | Less than 1 Year | Non-investment grade
Credit Derivatives
Derivative notional amount	51,914	52,590
Protection Sold | Total Index and Basket Credit Default Swaps | 1 - 3 Years
Credit Derivatives
Derivative notional amount	68,263	103,302
Protection Sold | Total Index and Basket Credit Default Swaps | 1 - 3 Years | Investment grade
Credit Derivatives
Derivative notional amount	39,948	59,403
Protection Sold | Total Index and Basket Credit Default Swaps | 1 - 3 Years | Non-investment grade
Credit Derivatives
Derivative notional amount	28,315	43,899
Protection Sold | Total Index and Basket Credit Default Swaps | 3 - 5 Years
Credit Derivatives
Derivative notional amount	56,648	60,985
Protection Sold | Total Index and Basket Credit Default Swaps | 3 - 5 Years | Investment grade
Credit Derivatives
Derivative notional amount	42,887	45,505
Protection Sold | Total Index and Basket Credit Default Swaps | 3 - 5 Years | Non-investment grade
Credit Derivatives
Derivative notional amount	13,761	15,480
Protection Sold | Total Index and Basket Credit Default Swaps | Over 5 Years
Credit Derivatives
Derivative notional amount	18,731	18,329
Protection Sold | Total Index and Basket Credit Default Swaps | Over 5 Years | Investment grade
Credit Derivatives
Derivative notional amount	4,060	5,327
Protection Sold | Total Index and Basket Credit Default Swaps | Over 5 Years | Non-investment grade
Credit Derivatives
Derivative notional amount	14,671	13,002
Protection Sold | Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	176,009	199,688
Credit risk derivative (assets) / liability, fair value	726	(102)
Protection Sold | Tranched Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	43,657	69,025
Credit risk derivative (assets) / liability, fair value	(793)	(1,093)
Protection Sold | Single Name, and Non-tranched Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	521,900	619,500
Protection Sold | Other Credit Contracts
Credit Derivatives
Derivative notional amount	344	460
Credit risk derivative (assets) / liability, fair value	(17)	(24)
Protection Sold | Other Credit Contracts | Less than 1 Year
Credit Derivatives
Derivative notional amount	43	19
Protection Sold | Other Credit Contracts | 1 - 3 Years
Credit Derivatives
Derivative notional amount	25	107
Protection Sold | Other Credit Contracts | 3 - 5 Years
Credit Derivatives
Derivative notional amount	0	2
Protection Sold | Other Credit Contracts | Over 5 Years
Credit Derivatives
Derivative notional amount	276	332
Protection Purchased | Credit Default Swaps
Credit Derivatives
Derivative notional amount	605,860	728,928
Credit risk derivative (assets) / liability, fair value	964	(39)
Protection Purchased | Single Name Credit Default Swaps
Credit Derivatives
Derivative notional amount	338,727	405,361
Credit risk derivative (assets) / liability, fair value	(453)	(2,079)
Protection Purchased | Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	143,734	173,936
Credit risk derivative (assets) / liability, fair value	(771)	(82)
Protection Purchased | Tranched Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	123,399	149,631
Credit risk derivative (assets) / liability, fair value	2,188	2,122
Protection Purchased | Single Name, and Non-tranched Index and Basket Credit Default Swaps
Credit Derivatives
Derivative notional amount	$ 480,100	$ 577,700

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Investment Securities (Schedule of Investment Securities) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Investment securities
Total Investment securities - Amortized Cost	$ 79,802	$ 72,493
Total Investment securities, Gross unrealized gains	684	44
Total Investment securities, Gross unrealized losses	193	590
Total Investment securities, fair value	80,293	71,947
AFS securities
Total AFS securities, fair value	$ 67,726	$ 66,759
FFELP Student Loan Asset-backed Securities
Investment securities
Percent of principal balance and interest guaranteed by the U.S. Department of Education	95.00%	95.00%
AFS securities
AFS securities
Available-for-sale Securities, Amortized Cost, total	$ 67,384	$ 67,269
Total AFS securities, Gross unrealized gains	535	43
Total AFS securities, Gross unrealized loss	193	553
Total AFS securities, fair value	67,726	66,759
AFS Debt Securities
AFS securities
AFS debt securities, Amortized Cost, total	67,369	67,254
AFS debt securities, Gross unrealized gains	535	43
AFS debt securities, Gross unrealized losses	185	545
AFS debt securities, Fair value	67,719	66,752
AFS Debt Securities | U.S. Government and Agency Securities
AFS securities
AFS debt securities, Amortized Cost, total	53,144	52,658
AFS debt securities, Gross unrealized gains	421	34
AFS debt securities, Gross unrealized losses	30	299
AFS debt securities, Fair value	53,535	52,393
AFS Debt Securities | U.S. Treasury Securities
AFS securities
AFS debt securities, Amortized Cost, total	29,923	31,555
AFS debt securities, Gross unrealized gains	213	5
AFS debt securities, Gross unrealized losses	8	143
AFS debt securities, Fair value	30,128	31,417
AFS Debt Securities | U.S. Agency Securities
AFS securities
AFS debt securities, Amortized Cost, total	23,221	21,103
AFS debt securities, Gross unrealized gains	208	29
AFS debt securities, Gross unrealized losses	22	156
AFS debt securities, Fair value	23,407	20,976
AFS Debt Securities | Corporate and Other Debt
AFS securities
AFS debt securities, Amortized Cost, total	14,225	14,596
AFS debt securities, Gross unrealized gains	114	9
AFS debt securities, Gross unrealized losses	155	246
AFS debt securities, Fair value	14,184	14,359
AFS Debt Securities | Agency
AFS securities
AFS debt securities, Amortized Cost, total	2,139	1,906
AFS debt securities, Gross unrealized gains	5	1
AFS debt securities, Gross unrealized losses	31	60
AFS debt securities, Fair value	2,113	1,847
AFS Debt Securities | Non-Agency
AFS securities
AFS debt securities, Amortized Cost, total	2,159	2,220
AFS debt securities, Gross unrealized gains	36	3
AFS debt securities, Gross unrealized losses	10	25
AFS debt securities, Fair value	2,185	2,198
AFS Debt Securities | Auto Loan Asset-backed Securities
AFS securities
AFS debt securities, Amortized Cost, total	2,071	2,556
AFS debt securities, Gross unrealized gains	7	0
AFS debt securities, Gross unrealized losses	0	9
AFS debt securities, Fair value	2,078	2,547
AFS Debt Securities | Corporate Bonds
AFS securities
AFS debt securities, Amortized Cost, total	4,009	3,780
AFS debt securities, Gross unrealized gains	66	5
AFS debt securities, Gross unrealized losses	2	30
AFS debt securities, Fair value	4,073	3,755
AFS Debt Securities | Collateralized Loan Obligations
AFS securities
AFS debt securities, Amortized Cost, total	502	502
AFS debt securities, Gross unrealized gains	0	0
AFS debt securities, Gross unrealized losses	7	7
AFS debt securities, Fair value	495	495
AFS Debt Securities | FFELP Student Loan Asset-backed Securities
AFS securities
AFS debt securities, Amortized Cost, total	3,345	3,632
AFS debt securities, Gross unrealized gains	0	0
AFS debt securities, Gross unrealized losses	105	115
AFS debt securities, Fair value	3,240	3,517
AFS Equity Securities
AFS securities
AFS equity securities, Amortized cost, total	15	15
AFS equity securities, Gross unrealized gains	0	0
AFS equity securities, Gross unrealized losses	8	8
AFS equity securities, Fair value	7	7
HTM securities
HTM securities:
HTM securities, amortized cost, total	12,418	5,224
HTM - Gross Unrealized Gains	149	1
HTM - Gross Unrealized Losses	0	37
HTM - Fair Value	12,567	5,188
HTM securities | U.S. Treasury Securities
HTM securities:
HTM securities, amortized cost, total	3,705	1,001
HTM - Gross Unrealized Gains	53	0
HTM - Gross Unrealized Losses	0	3
HTM - Fair Value	3,758	998
HTM securities | U.S. Agency Securities
HTM securities:
HTM securities, amortized cost, total	8,713	4,223
HTM - Gross Unrealized Gains	96	1
HTM - Gross Unrealized Losses	0	34
HTM - Fair Value	$ 8,809	$ 4,190

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Investment Securities (Schedule of Investment Securities in an Unrealized Loss Position) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Investment Securities
Investment securities - Fair Value, Less than 12 Months	$ 9,923	$ 54,185
Investment securities - Fair Value, 12 Months or Longer	6,541	6,021
Investment securities - Fair Value, Total	16,464	60,206
Investment securities - Gross Unrealized Loss, Less than 12 Months	39	481
Investment Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Loss	154	109
Investment securities - Gross Unrealized Loss, Total	193	590
AFS securities
Investment Securities
AFS - Fair Value, Less than 12 Months	9,851	49,610
AFS - Fair Value, 12 Months or Longer	6,541	6,021
AFS - Fair Value, Total	16,392	55,631
AFS - Gross Unrealized Losses, Less than 12 Months	39	444
AFS - Gross Unrealized Losses, 12 Months or Longer	154	109
AFS - Gross Unrealized Losses, Total	193	553
AFS Debt Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	9,844	49,603
AFS - Fair Value, 12 Months or Longer	6,541	6,021
AFS - Fair Value, Total	16,385	55,624
AFS - Gross Unrealized Losses, Less than 12 Months	31	436
AFS - Gross Unrealized Losses, 12 Months or Longer	154	109
AFS - Gross Unrealized Losses, Total	185	545
AFS Debt Securities | U.S. Government and Agency Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	8,759	40,236
AFS - Fair Value, 12 Months or Longer	1,225	2,816
AFS - Fair Value, Total	9,984	43,052
AFS - Gross Unrealized Losses, Less than 12 Months	18	261
AFS - Gross Unrealized Losses, 12 Months or Longer	12	38
AFS - Gross Unrealized Losses, Total	30	299
AFS Debt Securities | U.S. Treasury Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	3,028	25,994
AFS - Fair Value, 12 Months or Longer	0	2,177
AFS - Fair Value, Total	3,028	28,171
AFS - Gross Unrealized Losses, Less than 12 Months	8	126
AFS - Gross Unrealized Losses, 12 Months or Longer	0	17
AFS - Gross Unrealized Losses, Total	8	143
AFS Debt Securities | U.S. Agency Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	5,731	14,242
AFS - Fair Value, 12 Months or Longer	1,225	639
AFS - Fair Value, Total	6,956	14,881
AFS - Gross Unrealized Losses, Less than 12 Months	10	135
AFS - Gross Unrealized Losses, 12 Months or Longer	12	21
AFS - Gross Unrealized Losses, Total	22	156
AFS Debt Securities | Corporate and Other Debt
Investment Securities
AFS - Fair Value, Less than 12 Months	1,085	9,367
AFS - Fair Value, 12 Months or Longer	5,316	3,205
AFS - Fair Value, Total	6,401	12,572
AFS - Gross Unrealized Losses, Less than 12 Months	13	175
AFS - Gross Unrealized Losses, 12 Months or Longer	142	71
AFS - Gross Unrealized Losses, Total	155	246
AFS Debt Securities | Agency
Investment Securities
AFS - Fair Value, Less than 12 Months	31	1,185
AFS - Fair Value, 12 Months or Longer	1,181	422
AFS - Fair Value, Total	1,212	1,607
AFS - Gross Unrealized Losses, Less than 12 Months	0	44
AFS - Gross Unrealized Losses, 12 Months or Longer	31	16
AFS - Gross Unrealized Losses, Total	31	60
AFS Debt Securities | Non-Agency
Investment Securities
AFS - Fair Value, Less than 12 Months	216	1,479
AFS - Fair Value, 12 Months or Longer	625	305
AFS - Fair Value, Total	841	1,784
AFS - Gross Unrealized Losses, Less than 12 Months	0	21
AFS - Gross Unrealized Losses, 12 Months or Longer	10	4
AFS - Gross Unrealized Losses, Total	10	25
AFS Debt Securities | Auto Loan Asset-backed Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	83	1,644
AFS - Fair Value, 12 Months or Longer	204	881
AFS - Fair Value, Total	287	2,525
AFS - Gross Unrealized Losses, Less than 12 Months	0	7
AFS - Gross Unrealized Losses, 12 Months or Longer	0	2
AFS - Gross Unrealized Losses, Total	0	9
AFS Debt Securities | Corporate Bonds
Investment Securities
AFS - Fair Value, Less than 12 Months	172	2,149
AFS - Fair Value, 12 Months or Longer	175	525
AFS - Fair Value, Total	347	2,674
AFS - Gross Unrealized Losses, Less than 12 Months	1	19
AFS - Gross Unrealized Losses, 12 Months or Longer	1	11
AFS - Gross Unrealized Losses, Total	2	30
AFS Debt Securities | Collateralized Loan Obligations
Investment Securities
AFS - Fair Value, Less than 12 Months	0	352
AFS - Fair Value, 12 Months or Longer	494	143
AFS - Fair Value, Total	494	495
AFS - Gross Unrealized Losses, Less than 12 Months	0	5
AFS - Gross Unrealized Losses, 12 Months or Longer	7	2
AFS - Gross Unrealized Losses, Total	7	7
AFS Debt Securities | FFELP Student Loan Asset-backed Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	583	2,558
AFS - Fair Value, 12 Months or Longer	2,637	929
AFS - Fair Value, Total	3,220	3,487
AFS - Gross Unrealized Losses, Less than 12 Months	12	79
AFS - Gross Unrealized Losses, 12 Months or Longer	93	36
AFS - Gross Unrealized Losses, Total	105	115
AFS Equity Securities
Investment Securities
AFS - Fair Value, Less than 12 Months	7	7
AFS - Fair Value, 12 Months or Longer	0	0
AFS - Fair Value, Total	7	7
AFS - Gross Unrealized Losses, Less than 12 Months	8	8
AFS - Gross Unrealized Losses, 12 Months or Longer	0	0
AFS - Gross Unrealized Losses, Total	8	8
HTM securities
Investment Securities
HTM - Fair Value, Less than 12 Months	72	4,575
HTM - Fair Value, 12 Months or Longer	0	0
HTM - Fair Value, Total	72	4,575
HTM - Gross Unrealized Losses, Less than 12 Months	0	37
HTM - Gross Unrealized Losses, 12 Months or Longer	0	0
HTM - Gross Unrealized Losses, Total	0	37
HTM securities | U.S. Treasury Securities
Investment Securities
HTM - Fair Value, Less than 12 Months		898
HTM - Fair Value, 12 Months or Longer		0
HTM - Fair Value, Total		898
HTM - Gross Unrealized Losses, Less than 12 Months		3
HTM - Gross Unrealized Losses, 12 Months or Longer		0
HTM - Gross Unrealized Losses, Total		3
HTM securities | U.S. Agency Securities
Investment Securities
HTM - Fair Value, Less than 12 Months	72	3,677
HTM - Fair Value, 12 Months or Longer	0	0
HTM - Fair Value, Total	72	3,677
HTM - Gross Unrealized Losses, Less than 12 Months	0	34
HTM - Gross Unrealized Losses, 12 Months or Longer	0	0
HTM - Gross Unrealized Losses, Total	$ 0	$ 34

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Investment Securities (Schedule of Amortized Cost and Fair Value of Available for Sale Debt Securities by Contractual Date) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Amortized Cost
Total Investment securities - Amortized Cost	$ 79,802	$ 72,493
Fair Value
Available-for-sale Securities, Total	67,726	66,759
Investment securities, fair value	$ 80,293	71,947
Annualized Average Yield
Total Investment securities, Annualized average yield	1.40%
AFS securities
Amortized Cost
Available-for-sale Securities, Amortized Cost, total	$ 67,384	67,269
Fair Value
Available-for-sale Securities, Total	$ 67,726	66,759
Annualized Average Yield
Annualized average yield, total	1.30%
AFS Debt Securities
Amortized Cost
AFS debt securities, Amortized Cost, total	$ 67,369	67,254
Fair Value
AFS debt securities, Fair value, total	$ 67,719	66,752
Annualized Average Yield
Annualized average yield, total	1.30%
AFS Debt Securities | U.S. Government and Agency Securities
Amortized Cost
AFS debt securities, Amortized Cost, total	$ 53,144	52,658
Fair Value
AFS debt securities, Fair value, total	$ 53,535	52,393
Annualized Average Yield
Annualized average yield, total	1.20%
AFS Debt Securities | U.S. Treasury Securities
Amortized Cost
AFS debt securities, amortized cost, due within 1 year	$ 2,698
AFS debt securities, amortized cost, after 1 year through 5 years	22,137
AFS debt securities, Amortized cost, after 5 years through 10 years	5,088
AFS debt securities, Amortized Cost, total	29,923	31,555
Fair Value
AFS debt securities, due within 1 year	2,702
AFS debt securities, after 1 year through 5 years	22,317
AFS debt securities, after 5 years through 10 years	5,109
AFS debt securities, Fair value, total	$ 30,128	31,417
Annualized Average Yield
Annualized average yield, due within 1 year	0.70%
Annualized average yield, after 1 year through 5 years	1.00%
Annualized average yield, after 5 years through 10 years	1.40%
AFS Debt Securities | U.S. Agency Securities
Amortized Cost
AFS debt securities, amortized cost, due within 1 year	$ 200
AFS debt securities, amortized cost, after 1 year through 5 years	2,629
AFS debt securities, Amortized cost, after 5 years through 10 years	1,327
AFS debt securities, amortized cost, after 10 years	19,065
AFS debt securities, Amortized Cost, total	23,221	21,103
Fair Value
AFS debt securities, due within 1 year	200
AFS debt securities, after 1 year through 5 years	2,632
AFS debt securities, after 5 years through 10 years	1,357
AFS debt securities, after 10 years	19,218
AFS debt securities, Fair value, total	$ 23,407	20,976
Annualized Average Yield
Annualized average yield, due within 1 year	0.70%
Annualized average yield, after 1 year through 5 years	0.50%
Annualized average yield, after 5 years through 10 years	1.90%
Annualized average yield, after 10 years	1.60%
AFS Debt Securities | Corporate and Other Debt
Amortized Cost
AFS debt securities, Amortized Cost, total	$ 14,225	14,596
Fair Value
AFS debt securities, Fair value, total	$ 14,184	14,359
Annualized Average Yield
Annualized average yield, total	1.50%
AFS Debt Securities | Agency
Amortized Cost
AFS debt securities, amortized cost, due within 1 year	$ 73
AFS debt securities, amortized cost, after 1 year through 5 years	404
AFS debt securities, Amortized cost, after 5 years through 10 years	639
AFS debt securities, amortized cost, after 10 years	1,023
AFS debt securities, Amortized Cost, total	2,139	1,906
Fair Value
AFS debt securities, due within 1 year	74
AFS debt securities, after 1 year through 5 years	406
AFS debt securities, after 5 years through 10 years	641
AFS debt securities, after 10 years	992
AFS debt securities, Fair value, total	$ 2,113	1,847
Annualized Average Yield
Annualized average yield, due within 1 year	0.80%
Annualized average yield, after 1 year through 5 years	1.00%
Annualized average yield, after 5 years through 10 years	1.30%
Annualized average yield, after 10 years	1.60%
AFS Debt Securities | Non-Agency
Amortized Cost
AFS debt securities, amortized cost, after 10 years	$ 2,159
AFS debt securities, Amortized Cost, total	2,159	2,220
Fair Value
AFS debt securities, after 10 years	2,185
AFS debt securities, Fair value, total	$ 2,185	2,198
Annualized Average Yield
Annualized average yield, after 10 years	1.90%
AFS Debt Securities | Auto Loan Asset-backed Securities
Amortized Cost
AFS debt securities, amortized cost, due within 1 year	$ 4
AFS debt securities, amortized cost, after 1 year through 5 years	1,902
AFS debt securities, Amortized cost, after 5 years through 10 years	165
AFS debt securities, Amortized Cost, total	2,071	2,556
Fair Value
AFS debt securities, due within 1 year	4
AFS debt securities, after 1 year through 5 years	1,909
AFS debt securities, after 5 years through 10 years	165
AFS debt securities, Fair value, total	$ 2,078	2,547
Annualized Average Yield
Annualized average yield, due within 1 year	0.90%
Annualized average yield, after 1 year through 5 years	1.30%
Annualized average yield, after 5 years through 10 years	1.60%
AFS Debt Securities | Corporate Bonds
Amortized Cost
AFS debt securities, amortized cost, due within 1 year	$ 638
AFS debt securities, amortized cost, after 1 year through 5 years	2,655
AFS debt securities, Amortized cost, after 5 years through 10 years	716
AFS debt securities, Amortized Cost, total	4,009	3,780
Fair Value
AFS debt securities, due within 1 year	640
AFS debt securities, after 1 year through 5 years	2,695
AFS debt securities, after 5 years through 10 years	738
AFS debt securities, Fair value, total	$ 4,073	3,755
Annualized Average Yield
Annualized average yield, due within 1 year	1.30%
Annualized average yield, after 1 year through 5 years	1.80%
Annualized average yield, after 5 years through 10 years	2.60%
AFS Debt Securities | Collateralized Loan Obligations
Amortized Cost
AFS debt securities, Amortized cost, after 5 years through 10 years	$ 502
AFS debt securities, Amortized Cost, total	502	502
Fair Value
AFS debt securities, after 5 years through 10 years	495
AFS debt securities, Fair value, total	$ 495	495
Annualized Average Yield
Annualized average yield, after 5 years through 10 years	1.50%
AFS Debt Securities | FFELP Student Loan Asset-backed Securities
Amortized Cost
AFS debt securities, amortized cost, after 1 year through 5 years	$ 59
AFS debt securities, Amortized cost, after 5 years through 10 years	922
AFS debt securities, amortized cost, after 10 years	2,364
AFS debt securities, Amortized Cost, total	3,345	3,632
Fair Value
AFS debt securities, after 1 year through 5 years	59
AFS debt securities, after 5 years through 10 years	897
AFS debt securities, after 10 years	2,284
AFS debt securities, Fair value, total	$ 3,240	3,517
Annualized Average Yield
Annualized average yield, after 1 year through 5 years	0.60%
Annualized average yield, after 5 years through 10 years	0.90%
Annualized average yield, after 10 years	0.90%
AFS Equity Securities
Amortized Cost
AFS equity securities, Amortized cost	$ 15	15
Fair Value
AFS equity securities, Fair value	$ 7	7
Annualized Average Yield
Annualized average yield, total	0.00%
HTM securities
Amortized Cost
HTM securities, amortized cost, total	$ 12,418	5,224
Fair Value
HTM securities, Fair value, total	$ 12,567	5,188
Annualized Average Yield
HTM securities, Annualized average yield, total	1.80%
HTM securities | U.S. Treasury Securities
Amortized Cost
HTM securities, amortized cost, due within 1 year	$ 200
HTM securities, amortized cost, after 1 year through 5 years	1,408
HTM securities, amortized cost, after 5 year through 10 years	1,693
HTM securities, amortized cost, after 10 years	404
HTM securities, amortized cost, total	3,705	1,001
Fair Value
HTM securities, due within 1 year	201
HTM securities, after 1 year through 5 years	1,422
HTM securities, after 5 years through 10 years	1,719
HTM securities, after 10 years	416
HTM securities, Fair value, total	$ 3,758	998
Annualized Average Yield
HTM securities, Annualized average yield, due within 1 year	0.70%
HTM securities, Annualized average yield, after 1 years through 5 years	1.10%
HTM securities, Annualized average yield, after 5 years through 10 years	1.70%
HTM securities, Annualized average yield, after 10 year	2.50%
HTM securities | U.S. Agency Securities
Amortized Cost
HTM securities, amortized cost, after 10 years	$ 8,713
HTM securities, amortized cost, total	8,713	4,223
Fair Value
HTM securities, after 10 years	8,809
HTM securities, Fair value, total	$ 8,809	$ 4,190
Annualized Average Yield
HTM securities, Annualized average yield, after 10 year	2.00%

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Investment Securities (Schedule of Gross Realized Gains and Gross Realized (Losses) on Sales of AFS Securities) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Available-for-sale Securities [Abstract]
Gross realized gains	$ 71	$ 40	$ 85	$ 69
Gross realized (losses)	(1)	(10)	(3)	(14)
Total	$ 70	$ 30	$ 82	$ 55

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Collateralized Transactions (Narrative) (Details) - USD ($) $ in Billions	Jun. 30, 2016	Dec. 31, 2015
Collateralized Agreements
Customer margin loans outstanding	$ 23.2	$ 25.3
Fair value of financial instruments received as collateral where the Company is permitted to sell or repledge the securities	528.0	522.6
Fair value of financial instruments received as collateral where the Company has sold or repledged	407.0	398.1
Trading assets	$ 41.1	$ 35.0

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Collateralized Transactions (Balance Sheet Offsetting) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Securities Purchased under Agreements to Resell
Gross Amounts	$ 162,813	$ 135,714
Amounts Offset	(65,224)	(48,057)
Net Amounts Presented	97,589	87,657
Amounts Not Offset	(91,746)	(84,752)
Net Exposure	5,843	2,905
Securities Borrowed
Gross Amounts	138,436	147,445
Amounts Offset	(7,155)	(5,029)
Net Amounts Presented	131,281	142,416
Amounts Not Offset	(124,773)	(134,250)
Net Exposure	6,508	8,166
Securities Sold under Agreements to Repurchase
Gross Amounts	115,552	84,749
Amounts Offset	(65,224)	(48,057)
Net Amounts presented	50,328	36,692
Amounts Not Offset	(42,541)	(31,604)
Net Exposure	7,787	5,088
Securities Loaned
Gross Amounts	24,396	24,387
Amounts Offset	(7,155)	(5,029)
Net Amounts Presented	17,241	19,358
Amounts Not Offset	(16,724)	(18,881)
Net Exposure	517	477
Securities purchased under agreements to resell, which are either not subject to master netting agreements or collateral agreements, or are subject to such agreements but the entity has not determined the agreements to be legally enforceable	5,500	2,600
Securities borrowed, which are either not subject to master netting agreements or collateral agreements, or are subject to such agreements but the entity has not determined the agreements to be legally enforceable	3,700	3,000
Securities sold under agreements to repurchase, which are either not subject to master netting agreements or collateral agreements, or are subject to such agreements but the entity has not determined the agreements to be legally enforceable	7,200	$ 4,900
Securities loaned, which are either not subject to master netting agreements or collateral agreements, or are subject to such agreements but the entity has not determined the agreements to be legally enforceable	$ 400

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Collateralized Transactions (Secured Financing Transactions) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Securities Financing Transaction
Securities sold under agreements to repurchase	$ 115,552	$ 84,749
Securities loaned	24,396	24,387
Gross amount of secured financing included in the above offseting disclosure	139,948	109,136
Obligation to return securities received as collateral	18,738	19,316
Total	158,686	128,452
U.S. Government and Agency Securities
Securities Financing Transaction
Securities sold under agreements to repurchase	39,920	36,609
Securities loaned	182	0
State And Municipal Securities
Securities Financing Transaction
Securities sold under agreements to repurchase	2,104	173
Other Sovereign Government Obligations
Securities Financing Transaction
Securities sold under agreements to repurchase	42,329	24,820
Securities loaned	7,454	7,336
Asset-backed Securities
Securities Financing Transaction
Securities sold under agreements to repurchase	745	441
Corporate and Other Debt
Securities Financing Transaction
Securities sold under agreements to repurchase	8,638	4,020
Securities loaned	123	71
Obligation to return securities received as collateral	0	3
Corporate Equities
Securities Financing Transaction
Securities sold under agreements to repurchase	21,515	18,473
Securities loaned	16,602	16,972
Obligation to return securities received as collateral	18,737	19,313
Other
Securities Financing Transaction
Securities sold under agreements to repurchase	301	213
Securities loaned	35	8
Obligation to return securities received as collateral	1	0
Overnight and Open
Securities Financing Transaction
Securities sold under agreements to repurchase	38,732	20,410
Securities loaned	13,085	12,247
Gross amount of secured financing included in the above offseting disclosure	51,817	32,657
Obligation to return securities received as collateral	18,738	19,316
Total	70,555	51,973
Less than 30 days
Securities Financing Transaction
Securities sold under agreements to repurchase	30,586	25,245
Securities loaned	50	478
Gross amount of secured financing included in the above offseting disclosure	30,636	25,723
Obligation to return securities received as collateral	0	0
Total	30,636	25,723
30-90 days
Securities Financing Transaction
Securities sold under agreements to repurchase	20,309	13,221
Securities loaned	1,336	2,156
Gross amount of secured financing included in the above offseting disclosure	21,645	15,377
Obligation to return securities received as collateral	0	0
Total	21,645	15,377
Over 90 days
Securities Financing Transaction
Securities sold under agreements to repurchase	25,925	25,873
Securities loaned	9,925	9,506
Gross amount of secured financing included in the above offseting disclosure	35,850	35,379
Obligation to return securities received as collateral	0	0
Total	$ 35,850	$ 35,379

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Collateralized Transactions (Cash And Securities Deposited With Clearing Organizations Or Segregated Under Federal And Other Regulations Or Requirements) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Collateralized Transactions
Securities	$ 23,710	$ 14,390
Other assets - Cash deposited with clearing organizations or segregated under federal and other regulations or requirements	32,771	31,469
Total	$ 56,481	$ 45,859

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Loans and Allowance for Credit Losses (Outstanding Loans and Credit Quality) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Loans Held for Investments
Loans held for investments, gross	$ 77,606	$ 72,784	$ 66,593
Allowance for loan losses	(323)	(225)	(169)	$ (149)
Loans held for investment, net	77,283	72,559
Loans Held for Sale
Loans held for sale, gross	15,882	13,200
Loans held for sale, net	15,882	13,200
Total Loans
Total loans, gross	93,488	85,984
Allowance for loan losses	(323)	(225)
Total loans, net	93,165	85,759
Total loans, net of allowance, made to foreign borrowers	8,104	9,789
Loans at fixed interest rate	10,102	8,471
Loans at floating or adjustable interest rate	83,063	77,288
Pass
Loans Held for Investments
Loans held for investments, gross	75,338	71,235
Special Mention
Loans Held for Investments
Loans held for investments, gross	763	300
Substandard
Loans Held for Investments
Loans held for investments, gross	1,349	1,237
Doubtful
Loans Held for Investments
Loans held for investments, gross	156	12
Loss
Loans Held for Investments
Loans held for investments, gross	0	0
Corporate
Loans Held for Investments
Loans held for investments, gross	24,186	23,554	22,500
Allowance for loan losses	(252)	(166)	(135)	(118)
Loans Held for Sale
Loans held for sale, gross	14,448	11,924
Total Loans
Total loans, gross	38,634	35,478
Corporate | Pass
Loans Held for Investments
Loans held for investments, gross	22,183	22,040
Corporate | Special Mention
Loans Held for Investments
Loans held for investments, gross	539	300
Corporate | Substandard
Loans Held for Investments
Loans held for investments, gross	1,308	1,202
Corporate | Doubtful
Loans Held for Investments
Loans held for investments, gross	156	12
Corporate | Loss
Loans Held for Investments
Loans held for investments, gross	0	0
Consumer
Loans Held for Investments
Loans held for investments, gross	23,337	21,528	19,464
Allowance for loan losses	(4)	(5)	(2)	(2)
Loans Held for Sale
Loans held for sale, gross	0	0
Total Loans
Total loans, gross	23,337	21,528
Consumer | Pass
Loans Held for Investments
Loans held for investments, gross	23,337	21,528
Consumer | Special Mention
Loans Held for Investments
Loans held for investments, gross	0	0
Consumer | Substandard
Loans Held for Investments
Loans held for investments, gross	0	0
Consumer | Doubtful
Loans Held for Investments
Loans held for investments, gross	0	0
Consumer | Loss
Loans Held for Investments
Loans held for investments, gross	0	0
Residential Real Estate
Loans Held for Investments
Loans held for investments, gross	22,668	20,863	18,241
Allowance for loan losses	(18)	(17)	(9)	(8)
Loans Held for Sale
Loans held for sale, gross	84	104
Total Loans
Total loans, gross	22,752	20,967
Residential Real Estate | Pass
Loans Held for Investments
Loans held for investments, gross	22,627	20,828
Residential Real Estate | Special Mention
Loans Held for Investments
Loans held for investments, gross	0	0
Residential Real Estate | Substandard
Loans Held for Investments
Loans held for investments, gross	41	35
Residential Real Estate | Doubtful
Loans Held for Investments
Loans held for investments, gross	0	0
Residential Real Estate | Loss
Loans Held for Investments
Loans held for investments, gross	0	0
Wholesale Real Estate
Loans Held for Investments
Loans held for investments, gross	7,415	6,839	6,388
Allowance for loan losses	(49)	(37)	$ (23)	$ (21)
Loans Held for Sale
Loans held for sale, gross	1,350	1,172
Total Loans
Total loans, gross	8,765	8,011
Wholesale Real Estate | Pass
Loans Held for Investments
Loans held for investments, gross	7,191	6,839
Wholesale Real Estate | Special Mention
Loans Held for Investments
Loans held for investments, gross	224	0
Wholesale Real Estate | Substandard
Loans Held for Investments
Loans held for investments, gross	0	0
Wholesale Real Estate | Doubtful
Loans Held for Investments
Loans held for investments, gross	0	0
Wholesale Real Estate | Loss
Loans Held for Investments
Loans held for investments, gross	$ 0	$ 0

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Loans and Allowance for Credit Losses (Impaired Loans) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Impaired Loans
Impaired loans with allowance	$ 244.0	$ 39.0
Impaired loans without allowance	368.0	106.0
Impaired loans unpaid principal balance	625.0	149.0
Impaired loans	612.0	145.0
Past due 90 days loans and on nonaccrual	21.0	22.0
Allowance for loan losses	323.0	225.0	$ 169.0	$ 149.0
Troubled Debt Restructuring
Allowance of TDR	12.1	5.1
Americas
Impaired Loans
Impaired loans	589.0	108.0
Past due 90 days loans and on nonaccrual	21.0	22.0
Allowance for loan losses	277.0	183.0
EMEA
Impaired Loans
Impaired loans	23.0	12.0
Past due 90 days loans and on nonaccrual	0.0	0.0
Allowance for loan losses	43.0	34.0
Asia-Pacific
Impaired Loans
Impaired loans	0.0	25.0
Past due 90 days loans and on nonaccrual	0.0	0.0
Allowance for loan losses	3.0	8.0
Loans and other debt
Troubled Debt Restructuring
Troubled Debt Restructuring	137.2	44.0
Lending commitments
Troubled Debt Restructuring
Troubled Debt Restructuring	$ 18.7	$ 34.8

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Loans and Allowance for Credit Losses (Loans and Lending-related Commitments) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Allowance for loan losses rollforward
Beginning balance			$ 225	$ 149
Gross charge-offs			0	(1)
Gross recoveries			0	1
Net recoveries/ (charge-offs)			0	0
Provision for (release of) loan losses	$ 16	$ 4	128	30
Other			(30)	(10)
Ending balance	323	169	323	169
Loans, additional information
Allowance, inherent	218	164	218	164
Allowance, specific	105	5	105	5
Loans, inherent	76,994	66,545	76,994	66,545
Loans, specific	612	48	612	48
Total Loans	77,606	66,593	77,606	66,593	$ 72,784
Allowance for lending-related commitments rollforward
Beginning balance			185	149
Provision for lending-related commitments	(13)	(29)	3	8
Other			(1)
Ending balance	187	157	187	157
Lending-related commitments, additional information
Allowance, inherent	179	157	179	157
Allowance, specific	8	0	8	0
Lending-related commitments, inherent	69,207	70,330	69,207	70,330
Lending-related commitments, specific	64	0	64	0
Total lending-related commitments evaluated for impairment	69,271	70,330	69,271	70,330
Corporate
Allowance for loan losses rollforward
Beginning balance			166	118
Gross charge-offs			0	0
Gross recoveries			0	1
Net recoveries/ (charge-offs)			0	1
Provision for (release of) loan losses			116	26
Other			(30)	(10)
Ending balance	252	135	252	135
Loans, additional information
Allowance, inherent	147	130	147	130
Allowance, specific	105	5	105	5
Loans, inherent	23,604	22,479	23,604	22,479
Loans, specific	582	21	582	21
Total Loans	24,186	22,500	24,186	22,500	23,554
Allowance for lending-related commitments rollforward
Beginning balance			180	147
Provision for lending-related commitments			1	6
Other			0
Ending balance	181	153	181	153
Lending-related commitments, additional information
Allowance, inherent	173	153	173	153
Allowance, specific	8	0	8	0
Lending-related commitments, inherent	63,120	65,183	63,120	65,183
Lending-related commitments, specific	64	0	64	0
Total lending-related commitments evaluated for impairment	63,184	65,183	63,184	65,183
Consumer
Allowance for loan losses rollforward
Beginning balance			5	2
Gross charge-offs			0	0
Gross recoveries			0	0
Net recoveries/ (charge-offs)			0	0
Provision for (release of) loan losses			(1)	0
Other			0	0
Ending balance	4	2	4	2
Loans, additional information
Allowance, inherent	4	2	4	2
Allowance, specific	0	0	0	0
Loans, inherent	23,337	19,464	23,337	19,464
Loans, specific	0	0	0	0
Total Loans	23,337	19,464	23,337	19,464	21,528
Allowance for lending-related commitments rollforward
Beginning balance			1	0
Provision for lending-related commitments			0	0
Other			(1)
Ending balance	0	0	0	0
Lending-related commitments, additional information
Allowance, inherent	0	0	0	0
Allowance, specific	0	0	0	0
Lending-related commitments, inherent	5,264	4,235	5,264	4,235
Lending-related commitments, specific	0	0	0	0
Total lending-related commitments evaluated for impairment	5,264	4,235	5,264	4,235
Residential Real Estate
Allowance for loan losses rollforward
Beginning balance			17	8
Gross charge-offs			0	(1)
Gross recoveries			0	0
Net recoveries/ (charge-offs)			0	(1)
Provision for (release of) loan losses			1	2
Other			0	0
Ending balance	18	9	18	9
Loans, additional information
Allowance, inherent	18	9	18	9
Allowance, specific	0	0	0	0
Loans, inherent	22,638	18,214	22,638	18,214
Loans, specific	30	27	30	27
Total Loans	22,668	18,241	22,668	18,241	20,863
Allowance for lending-related commitments rollforward
Beginning balance			0	0
Provision for lending-related commitments			0	0
Other			0
Ending balance	0	0	0	0
Lending-related commitments, additional information
Allowance, inherent	0	0	0	0
Allowance, specific	0	0	0	0
Lending-related commitments, inherent	327	289	327	289
Lending-related commitments, specific	0	0	0	0
Total lending-related commitments evaluated for impairment	327	289	327	289
Wholesale Real Estate
Allowance for loan losses rollforward
Beginning balance			37	21
Gross charge-offs			0	0
Gross recoveries			0	0
Net recoveries/ (charge-offs)			0	0
Provision for (release of) loan losses			12	2
Other			0	0
Ending balance	49	23	49	23
Loans, additional information
Allowance, inherent	49	23	49	23
Allowance, specific	0	0	0	0
Loans, inherent	7,415	6,388	7,415	6,388
Loans, specific	0	0	0	0
Total Loans	7,415	6,388	7,415	6,388	$ 6,839
Allowance for lending-related commitments rollforward
Beginning balance			4	2
Provision for lending-related commitments			2	2
Other			0
Ending balance	6	4	6	4
Lending-related commitments, additional information
Allowance, inherent	6	4	6	4
Allowance, specific	0	0	0	0
Lending-related commitments, inherent	496	623	496	623
Lending-related commitments, specific	0	0	0	0
Total lending-related commitments evaluated for impairment	$ 496	$ 623	$ 496	$ 623

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Loans and Allowance for Credit Losses (Employee Loans) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Employee Loans
Employee loans outstanding	$ 4,877	$ 4,923
Allowance for employee loans	$ 100	$ 108
Employee Retainment and Recruitment Program | Minimum
Employee Loans
Employee loan repayment terms	1 year
Employee Retainment and Recruitment Program | Maximum
Employee Loans
Employee loan repayment terms	12 years

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Equity Method Investments (Narratives) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Equity Method Investments
Equity method investment	$ 3,235		$ 3,235		$ 3,144
Income (loss) from equity method investments	(14)	$ 45	1	$ 83
MUMSS
Equity Method Investments
Income (loss) from equity method investments	$ 23	$ 71	$ 57	140
Payments of Dividends by Joint Venture				291
Dividends received from equity method investment				$ 116
MUMSS | MUFG
Equity Method Investments
Voting interest held by noncontrolling interest	60.00%	60.00%	60.00%	60.00%

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Deposits (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Deposits [Abstract]
Savings and demand deposits	$ 151,014	$ 153,346
Time deposits	1,679	2,688
Total	152,693	$ 156,034
Maturities of Interest-bearing Deposits
Savings deposits payable upon demand	151,008
Time deposits maturing in 2016	1,043
Time deposits maturing in 2017	578
Time deposits maturing in 2018	$ 11

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Long-Term Borrowings and Other Secured Financings (Other Narratives) (Details) - USD ($) $ in Billions	6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Long-term Borrowings
Notes issued, principal amount	$ 20.6	$ 22.9
Notes matured or retired	$ 15.9	$ 13.0
Weighted average maturity of long-term borrowings	6 years 4 months		6 years 1 month

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Long-Term Borrowings and Other Secured Financings (Components of Long-term Borrowings) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Components of Long-term Borrowings
Senior debt	$ 149,519	$ 140,494
Subordinated debt	11,120	10,404
Junior subordinated debentures	2,853	2,870
Total	$ 163,492	$ 153,768

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Long-Term Borrowings and Other Secured Financings (Other Secured Financings) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Components of other secured financings
Secured financings with original maturities greater than one year	$ 8,159	$ 7,629
Secured financings with original maturities one year or less	1,444	1,435
Failed sales	298	400
Total other secured financings	$ 9,901	$ 9,464

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Commitments, Guarantees and Contingencies (Narrative - Contingencies) (Details) - USD ($) $ in Millions	Jun. 25, 2016	Jan. 25, 2011	Jul. 15, 2010	Jun. 30, 2016	Jan. 23, 2015	Apr. 28, 2014	Jul. 08, 2013	May 03, 2013	Jan. 10, 2013	Sep. 28, 2012	Aug. 08, 2012	Aug. 07, 2012
China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al.
Contingencies
Damages sought			$ 228
Estimate of possible loss, maximum				$ 240
Credit default swap asset			275
Loss in period			$ 12
The Bank of New York Mellon Trust, National Association v. Morgan Stanley Mortgage Capital Inc.
Contingencies
Damages sought		$ 81
Estimate of possible loss, maximum				81
Morgan Stanley Mortgage Loan Trusts v Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Estimate of possible loss, maximum				527
Morgan Stanley Mortgage Loan Trust 2006-4SL v. Morgan Stanley Mortgage Capital Inc.
Contingencies
Estimate of possible loss, maximum				149
Original principal balance of loans in trust												$ 303
Morgan Stanley Mortgage Loan Trust 2006-14SL v Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Original principal balance of loans in trust											$ 354
Morgan Stanley Mortgage Loan Trust 2007-4SL v Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Original principal balance of loans in trust											$ 305
Morgan Stanley Mortgage Loan Trust 2006-13ARX v. Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Estimate of possible loss, maximum				170
Original principal balance of loans in trust										$ 609
Morgan Stanley Mortgage Loan Trust 2006-10SL v. Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Estimate of possible loss, maximum				197
Original principal balance of loans in trust									$ 300
Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al.
Contingencies
Estimate of possible loss, minimum				258
Mortgage pass through certificate backed by securitization trusts original amount								$ 644
Mortgage pass through certificate backed by securitization trusts unpaid amount	$ 258
Mortgage pass through certificate incurred losses	$ 84
Deutsche Bank National Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Estimate of possible loss, maximum				292
Original principal balance of loans in trust						$ 735
US Bank National Association 2007-2AX v. Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Estimate of possible loss, maximum				240
Original principal balance of loans in trust							$ 650
Deutsche Bank National Trust Company 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC
Contingencies
Estimate of possible loss, maximum				$ 277
Original principal balance of loans in trust					$ 1,050

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Commitments, Guarantees and Contingencies (Commitments) (Details) $ in Millions	Jun. 30, 2016 USD ($)
Commitment, Fiscal Year Maturity
Less than 1	$ 91,797
1-3 years	24,812
3-5 years	47,489
Over 5 years	2,142
Total	166,240
Letters of Credit and Other Financial Guarantees Obtained to Satisfy Collateral Requirements
Commitment, Fiscal Year Maturity
Less than 1	125
1-3 years	0
3-5 years	1
Over 5 years	42
Total	168
Investment Activities
Commitment, Fiscal Year Maturity
Less than 1	598
1-3 years	93
3-5 years	16
Over 5 years	290
Total	997
Lending Commitments | Corporate
Commitment, Fiscal Year Maturity
Less than 1	15,625
1-3 years	24,405
3-5 years	47,248
Over 5 years	1,501
Total	88,779
Commitments participated to third parties	3,900
Lending Commitments | Consumer
Commitment, Fiscal Year Maturity
Less than 1	5,255
1-3 years	5
3-5 years	0
Over 5 years	4
Total	5,264
Lending Commitments | Residential real estate
Commitment, Fiscal Year Maturity
Less than 1	52
1-3 years	43
3-5 years	87
Over 5 years	236
Total	418
Lending Commitments | Wholesale real estate
Commitment, Fiscal Year Maturity
Less than 1	127
1-3 years	266
3-5 years	137
Over 5 years	69
Total	599
Forward Starting Reverse Repurchase Agreements and Securities Borrowing Agreements
Commitment, Fiscal Year Maturity
Less than 1	69,990
1-3 years	0
3-5 years	0
Over 5 years	0
Total	69,990
Commitments due in the next three business days	59,700
Underwriting Commitments
Commitment, Fiscal Year Maturity
Less than 1	25
1-3 years	0
3-5 years	0
Over 5 years	0
Total	$ 25

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Commitments, Guarantees and Contingencies (Obligations under Guarantee Arrangements) (Details) $ in Millions	Jun. 30, 2016 USD ($)
Credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	$ 567,290
Carrying Amount (Asset)/Liability	396
Collateral/Recourse	0
Other Credit Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	344
Carrying Amount (Asset)/Liability	(17)
Collateral/Recourse	0
Non-credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	2,556,379
Carrying Amount (Asset)/Liability	81,420
Collateral/Recourse	0
Standby Letters of Credit and Other Financial Guarantees Issued
Guarantor Obligations
Maximum Potential Payout/Notional	9,032
Carrying Amount (Asset)/Liability	(123)
Collateral/Recourse	6,831
Market Value Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	424
Carrying Amount (Asset)/Liability	2
Collateral/Recourse	6
Liquidity Facilities
Guarantor Obligations
Maximum Potential Payout/Notional	3,001
Carrying Amount (Asset)/Liability	(5)
Collateral/Recourse	5,406
Whole Loan Sales Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	23,398
Carrying Amount (Asset)/Liability	9
Collateral/Recourse	0
Securitizations Representations and Warranties
Guarantor Obligations
Maximum Potential Payout/Notional	62,180
Carrying Amount (Asset)/Liability	103
Collateral/Recourse	0
General Partner Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	435
Carrying Amount (Asset)/Liability	85
Collateral/Recourse	0
Less than 1 Year | Credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	211,128
Less than 1 Year | Other Credit Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	43
Less than 1 Year | Non-credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	1,087,106
Less than 1 Year | Standby Letters of Credit and Other Financial Guarantees Issued
Guarantor Obligations
Maximum Potential Payout/Notional	803
Less than 1 Year | Market Value Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	63
Less than 1 Year | Liquidity Facilities
Guarantor Obligations
Maximum Potential Payout/Notional	3,001
Less than 1 Year | Whole Loan Sales Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	0
Less than 1 Year | Securitizations Representations and Warranties
Guarantor Obligations
Maximum Potential Payout/Notional	0
Less than 1 Year | General Partner Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	35
1 - 3 Years | Credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	200,959
1 - 3 Years | Other Credit Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	25
1 - 3 Years | Non-credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	638,791
1 - 3 Years | Standby Letters of Credit and Other Financial Guarantees Issued
Guarantor Obligations
Maximum Potential Payout/Notional	1,091
1 - 3 Years | Market Value Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	250
1 - 3 Years | Liquidity Facilities
Guarantor Obligations
Maximum Potential Payout/Notional	0
1 - 3 Years | Whole Loan Sales Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	0
1 - 3 Years | Securitizations Representations and Warranties
Guarantor Obligations
Maximum Potential Payout/Notional	0
1 - 3 Years | General Partner Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	39
3 - 5 Years | Credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	123,957
3 - 5 Years | Other Credit Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	0
3 - 5 Years | Non-credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	290,370
3 - 5 Years | Standby Letters of Credit and Other Financial Guarantees Issued
Guarantor Obligations
Maximum Potential Payout/Notional	1,250
3 - 5 Years | Market Value Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	96
3 - 5 Years | Liquidity Facilities
Guarantor Obligations
Maximum Potential Payout/Notional	0
3 - 5 Years | Whole Loan Sales Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	2
3 - 5 Years | Securitizations Representations and Warranties
Guarantor Obligations
Maximum Potential Payout/Notional	0
3 - 5 Years | General Partner Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	53
Over 5 Years | Credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	31,246
Over 5 Years | Other Credit Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	276
Over 5 Years | Non-credit Derivative Contracts
Guarantor Obligations
Maximum Potential Payout/Notional	540,112
Over 5 Years | Standby Letters of Credit and Other Financial Guarantees Issued
Guarantor Obligations
Maximum Potential Payout/Notional	5,888
Over 5 Years | Market Value Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	15
Over 5 Years | Liquidity Facilities
Guarantor Obligations
Maximum Potential Payout/Notional	0
Over 5 Years | Whole Loan Sales Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	23,396
Over 5 Years | Securitizations Representations and Warranties
Guarantor Obligations
Maximum Potential Payout/Notional	62,180
Over 5 Years | General Partner Guarantees
Guarantor Obligations
Maximum Potential Payout/Notional	308
Primary and Secondary Lending Commitments
Guarantor Obligations
Standby letters of credit	$ 700

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Variable Interest Entities and Securitization Activities (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity
Additional maximum exposure to losses	$ 76	$ 72
Securities issued by SPEs	12,700	12,900
Noncontrolling interests related to consolidated VIEs	$ 257	$ 37

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Variable Interest Entities and Securitization Activities (Consolidated VIEs) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity
VIE assets	$ 3,075	$ 2,600
VIE liabilities	460	436
Credit-linked Notes
Variable Interest Entity
VIE assets	901	900
VIE liabilities	0	0
Other Structured Financings
Variable Interest Entity
VIE assets	924	787
VIE liabilities	240	13
Mortgage and Asset-Backed Securitizations
Variable Interest Entity
VIE assets	319	668
VIE liabilities	191	423
Other
Variable Interest Entity
VIE assets	931	245
VIE liabilities	$ 29	$ 0

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Variable Interest Entities and Securitization Activities (Consolidated VIEs Assets and Liabilities, Generally Not Available to the Company) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015
Assets
Cash and due from banks	$ 27,597	$ 19,827	$ 19,145
Trading assets, fair value	256,794	239,505
Customer and other receivables	52,827	45,407
Goodwill	6,581	6,584
Intangible assets	2,833	2,984
Other Assets	51,526	51,087
Total assets	828,873	787,465
Liabilities
Other secured financings	2,921	2,854
Other liabilities and accrued expenses	14,112	18,711
Total liabilities	750,498	711,281
Consolidated VIEs
Assets
Cash and due from banks	62	14
Trading assets, fair value	1,973	1,842
Customer and other receivables	3	3
Goodwill	18	0
Intangible assets	141	0
Other Assets	878	741
Total assets	3,075	2,600
Liabilities
Other secured financings	430	431
Other liabilities and accrued expenses	30	5
Total liabilities	$ 460	$ 436

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Variable Interest Entities and Securitization Activities (Non-Consolidated VIEs) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Mortgage and Asset-Backed Securities
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	$ 115,088	$ 126,872
Maximum exposure to loss	13,282	13,855
Carrying value of exposure to loss - Assets	12,670	13,361
Carrying value of exposure to loss - Liabilities	0	0
Mortgage and Asset-Backed Securities | Debt and equity interests
Variable Interest Entity
Maximum exposure to loss	12,670	13,361
Carrying value of exposure to loss - Assets	12,670	13,361
Mortgage and Asset-Backed Securities | Derivative and other contracts
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss - Assets	0	0
Carrying value of exposure to loss - Liabilities	0	0
Mortgage and Asset-Backed Securities | Commitments, guarantees and other
Variable Interest Entity
Maximum exposure to loss	612	494
Carrying value of exposure to loss - Liabilities	0	0
Residential Mortgage
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	3,708	13,787
Residential Mortgage | Debt and equity interests
Variable Interest Entity
Carrying value of exposure to loss - Assets	410	1,012
Commercial Mortgage
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	55,158	57,313
Commercial Mortgage | Debt and equity interests
Variable Interest Entity
Carrying value of exposure to loss - Assets	2,576	2,871
U.S. Agency Collateralized Mortgage Obligations
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	20,853	13,236
U.S. Agency Collateralized Mortgage Obligations | Debt and equity interests
Variable Interest Entity
Carrying value of exposure to loss - Assets	3,766	2,763
Other Consumer or Commercial Loans
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	35,369	42,536
Other Consumer or Commercial Loans | Debt and equity interests
Variable Interest Entity
Carrying value of exposure to loss - Assets	5,918	6,715
Collateralized Debt Obligations
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	6,825	8,805
Maximum exposure to loss	1,305	1,490
Carrying value of exposure to loss - Assets	955	1,259
Carrying value of exposure to loss - Liabilities	0	0
Collateralized Debt Obligations | Debt and equity interests
Variable Interest Entity
Maximum exposure to loss	955	1,259
Carrying value of exposure to loss - Assets	955	1,259
Collateralized Debt Obligations | Derivative and other contracts
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss - Assets	0	0
Carrying value of exposure to loss - Liabilities	0	0
Collateralized Debt Obligations | Commitments, guarantees and other
Variable Interest Entity
Maximum exposure to loss	350	231
Carrying value of exposure to loss - Liabilities	0	0
Municipal Tender Option Bonds
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	4,999	4,654
Maximum exposure to loss	3,032	2,835
Carrying value of exposure to loss - Assets	8	6
Carrying value of exposure to loss - Liabilities	0	0
Municipal Tender Option Bonds | Debt and equity interests
Variable Interest Entity
Maximum exposure to loss	31	1
Carrying value of exposure to loss - Assets	3	1
Municipal Tender Option Bonds | Derivative and other contracts
Variable Interest Entity
Maximum exposure to loss	3,001	2,834
Carrying value of exposure to loss - Assets	5	5
Carrying value of exposure to loss - Liabilities	0	0
Municipal Tender Option Bonds | Commitments, guarantees and other
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss - Liabilities	0	0
Other Structured Financings
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	4,081	2,201
Maximum exposure to loss	2,075	1,490
Carrying value of exposure to loss - Assets	1,324	685
Carrying value of exposure to loss - Liabilities	2	3
Other Structured Financings | Debt and equity interests
Variable Interest Entity
Maximum exposure to loss	1,712	1,129
Carrying value of exposure to loss - Assets	1,324	685
Other Structured Financings | Derivative and other contracts
Variable Interest Entity
Maximum exposure to loss	0	0
Carrying value of exposure to loss - Assets	0	0
Carrying value of exposure to loss - Liabilities	0	0
Other Structured Financings | Commitments, guarantees and other
Variable Interest Entity
Maximum exposure to loss	363	361
Carrying value of exposure to loss - Liabilities	2	3
Other
Variable Interest Entity
VIE assets that the Company does not consolidate (unpaid principal balance)	39,281	20,775
Maximum exposure to loss	5,079	4,143
Carrying value of exposure to loss - Assets	4,733	3,867
Carrying value of exposure to loss - Liabilities	41	15
Other | Debt and equity interests
Variable Interest Entity
Maximum exposure to loss	4,706	3,854
Carrying value of exposure to loss - Assets	4,706	3,854
Other | Derivative and other contracts
Variable Interest Entity
Maximum exposure to loss	73	67
Carrying value of exposure to loss - Assets	27	13
Carrying value of exposure to loss - Liabilities	31	15
Other | Commitments, guarantees and other
Variable Interest Entity
Maximum exposure to loss	300	222
Carrying value of exposure to loss - Liabilities	$ 10	$ 0

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Variable Interest Entities and Securitization Activities (Transfers of Assets with Continuing Involvement 1) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity
Derivative assets (fair value)	$ 38,158	$ 28,613
Derivative liabilities (fair value)	37,323	29,474
Special Purpose Entities
Variable Interest Entity
Retained interests (fair value)	1,890	2,246
Interests purchased in the secondary market (fair value)	274	320
Derivative assets (fair value)	497	494
Derivative liabilities (fair value)	449	449
Special Purpose Entities | Investment Grade
Variable Interest Entity
Retained interests (fair value)	798	887
Interests purchased in the secondary market (fair value)	174	187
Special Purpose Entities | Noninvestment Grade
Variable Interest Entity
Retained interests (fair value)	1,092	1,359
Interests purchased in the secondary market (fair value)	100	133
Special Purpose Entities | Residential Mortgage
Variable Interest Entity
SPE assets (unpaid principal balance)	21,239	22,440
Retained interests (fair value)	54	160
Interests purchased in the secondary market (fair value)	53	60
Derivative assets (fair value)	0	0
Derivative liabilities (fair value)	0	0
Special Purpose Entities | Residential Mortgage | Investment Grade
Variable Interest Entity
Retained interests (fair value)	0	0
Interests purchased in the secondary market (fair value)	0	0
Special Purpose Entities | Residential Mortgage | Noninvestment Grade
Variable Interest Entity
Retained interests (fair value)	54	160
Interests purchased in the secondary market (fair value)	53	60
Special Purpose Entities | Commercial Mortgage Loans (CMBS)
Variable Interest Entity
SPE assets (unpaid principal balance)	51,025	72,760
Retained interests (fair value)	107	301
Interests purchased in the secondary market (fair value)	79	151
Derivative assets (fair value)	291	343
Derivative liabilities (fair value)	0	0
Special Purpose Entities | Commercial Mortgage Loans (CMBS) | Investment Grade
Variable Interest Entity
Retained interests (fair value)	43	238
Interests purchased in the secondary market (fair value)	32	88
Special Purpose Entities | Commercial Mortgage Loans (CMBS) | Noninvestment Grade
Variable Interest Entity
Retained interests (fair value)	64	63
Interests purchased in the secondary market (fair value)	47	63
Special Purpose Entities | U.S. Agency Collateralized Mortgage Obligations
Variable Interest Entity
SPE assets (unpaid principal balance)	11,116	17,978
Retained interests (fair value)	755	649
Interests purchased in the secondary market (fair value)	142	99
Derivative assets (fair value)	0	0
Derivative liabilities (fair value)	0	0
Special Purpose Entities | U.S. Agency Collateralized Mortgage Obligations | Investment Grade
Variable Interest Entity
Retained interests (fair value)	755	649
Interests purchased in the secondary market (fair value)	142	99
Special Purpose Entities | U.S. Agency Collateralized Mortgage Obligations | Noninvestment Grade
Variable Interest Entity
Retained interests (fair value)	0	0
Interests purchased in the secondary market (fair value)	0	0
Special Purpose Entities | Credit-Linked Notes and Other
Variable Interest Entity
SPE assets (unpaid principal balance)	11,668	12,235
Retained interests (fair value)	974	1,136
Interests purchased in the secondary market (fair value)	0	10
Derivative assets (fair value)	206	151
Derivative liabilities (fair value)	449	449
Special Purpose Entities | Credit-Linked Notes and Other | Investment Grade
Variable Interest Entity
Retained interests (fair value)	0	0
Interests purchased in the secondary market (fair value)	0	0
Special Purpose Entities | Credit-Linked Notes and Other | Noninvestment Grade
Variable Interest Entity
Retained interests (fair value)	974	1,136
Interests purchased in the secondary market (fair value)	$ 0	$ 10

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Variable Interest Entities and Securitization Activities (Transfers of Assets with Continuing Involvement 2) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity
Derivative assets (fair value)	$ 38,158	$ 28,613
Derivative liabilities (fair value)	37,323	29,474
Special Purpose Entities
Variable Interest Entity
Retained interests (fair value)	1,890	2,246
Interests purchased in the secondary market (fair value)	274	320
Derivative assets (fair value)	497	494
Derivative liabilities (fair value)	449	449
Special Purpose Entities | Level 1
Variable Interest Entity
Retained interests (fair value)	0	0
Interests purchased in the secondary market (fair value)	0	0
Derivative assets (fair value)	0	0
Derivative liabilities (fair value)	0	0
Special Purpose Entities | Level 2
Variable Interest Entity
Retained interests (fair value)	813	903
Interests purchased in the secondary market (fair value)	259	299
Derivative assets (fair value)	482	466
Derivative liabilities (fair value)	102	110
Special Purpose Entities | Level 3
Variable Interest Entity
Retained interests (fair value)	1,077	1,343
Interests purchased in the secondary market (fair value)	15	21
Derivative assets (fair value)	15	28
Derivative liabilities (fair value)	347	339
Special Purpose Entities | Investment Grade
Variable Interest Entity
Retained interests (fair value)	798	887
Interests purchased in the secondary market (fair value)	174	187
Special Purpose Entities | Investment Grade | Level 1
Variable Interest Entity
Retained interests (fair value)	0	0
Interests purchased in the secondary market (fair value)	0	0
Special Purpose Entities | Investment Grade | Level 2
Variable Interest Entity
Retained interests (fair value)	798	886
Interests purchased in the secondary market (fair value)	174	187
Special Purpose Entities | Investment Grade | Level 3
Variable Interest Entity
Retained interests (fair value)	0	1
Interests purchased in the secondary market (fair value)	0	0
Special Purpose Entities | Noninvestment Grade
Variable Interest Entity
Retained interests (fair value)	1,092	1,359
Interests purchased in the secondary market (fair value)	100	133
Special Purpose Entities | Noninvestment Grade | Level 1
Variable Interest Entity
Retained interests (fair value)	0	0
Interests purchased in the secondary market (fair value)	0	0
Special Purpose Entities | Noninvestment Grade | Level 2
Variable Interest Entity
Retained interests (fair value)	15	17
Interests purchased in the secondary market (fair value)	85	112
Special Purpose Entities | Noninvestment Grade | Level 3
Variable Interest Entity
Retained interests (fair value)	1,077	1,342
Interests purchased in the secondary market (fair value)	$ 15	$ 21

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Variable Interest Entities and Securitization Activities (Proceeds from retained interests in securitization transactions) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Securitization Activities and Variable Interest Entities [Abstract]
Proceeds received from new securitization transactions	$ 4,163	$ 6,273	$ 6,876	$ 11,164
Proceeds from retained interests in securitization transactions	502	658	1,133	1,606
Collateralized Loan Obligations | Special Purpose Entities
Variable Interest Entity
Maturities, payments and sales	$ 0	$ 621	$ 31	$ 966

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Variable Interest Entities and Securitization Activities (Bilateral OTD equity derivatives) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity
Fair value of derivative assets recognized in the condensed consolidated balance sheet	$ 38,158	$ 28,613
Fair value of derivative liabilities recognized in the condensed consolidated balance sheet	37,323	29,474
Equity Securities And Over The Counter
Variable Interest Entity
Carrying value of assets derecognized at the time of sale and gross cash proceeds	9,524	7,878
Fair value of assets sold	9,692	7,935
Fair value of derivative assets recognized in the condensed consolidated balance sheet	218	97
Fair value of derivative liabilities recognized in the condensed consolidated balance sheet	$ 50	$ 40

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Variable Interest Entities and Securitization Activities (Failed Sales) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity
Assets, carrying value	$ 298	$ 400
Liabilities, carrying value	$ 298	$ 400

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Regulatory Requirements (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
MS&Co.
Regulatory Requirements
Net capital	$ 10,353	$ 10,254
Amount of capital that exceeds the minimum required	8,397	8,458
Net capital, minimum amount required to hold	1,000
Net capital, minimum amount required to hold in accordance with the market and credit risk standards	500
Amount by which if net capital falls below, the company is required to notify the SEC	5,000
MSSB LLC
Regulatory Requirements
Net capital	3,752	3,613
Amount of capital that exceeds the minimum required	$ 3,595	$ 3,459

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Regulatory Requirements (Capital Measures) (Details) - U.S. Basel III - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Advanced Approach transitional rules
Balance
Common Equity Tier 1 capital, amount	$ 59,796	$ 59,409
Tier 1 capital, amount	66,782	66,722
Total capital, amount	79,830	79,403
Tier 1 leverage capital, amount	0	0
Assets
RWAs	355,982	384,162
Adjusted average total assets	$ 804,511	$ 803,574
Ratio
Common Equity Tier 1 capital, ratio	16.80%	15.50%
Tier 1 capital ratio	18.80%	17.40%
Total capital ratio	22.40%	20.70%
Minimum Regulatory Capital Ratio
Minimum Common Equity Tier 1 capital, required	5.90%	4.50%
Minimum Tier 1 capital ratio, required	7.40%	6.00%
Minimum total capital ratio, required	9.40%	8.00%
Minimum Tier 1 leverage ratio, required	4.00%	4.00%
Standardized Approach transitional rules
Ratio
Tier 1 leverage ratio	8.30%	8.30%

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Regulatory Requirements (Significant U.S. Bank Operating Subsidiaries' Capital) (Details) - U.S. Basel III - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Advanced Approach transitional rules
Regulatory Requirements
Common Equity Tier 1 capital, amount	$ 59,796	$ 59,409
Tier 1 capital, amount	66,782	66,722
Total capital, amount	79,830	79,403
Tier 1 leverage capital, amount	$ 0	$ 0
Ratio
Common Equity Tier 1 capital, ratio	16.80%	15.50%
Tier 1 capital ratio	18.80%	17.40%
Total capital ratio	22.40%	20.70%
Standardized Approach transitional rules
Ratio
Tier 1 leverage ratio	8.30%	8.30%
MSBNA
Required Capital Ratio
Common Equity Tier 1 capital ratio, required	6.50%	6.50%
Tier 1 capital ratio, required	8.00%	8.00%
Total capital ratio, required	10.00%	10.00%
Tier 1 leverage ratio, required	5.00%	5.00%
MSBNA | Standardized Approach transitional rules
Regulatory Requirements
Common Equity Tier 1 capital, amount	$ 14,523	$ 13,333
Tier 1 capital, amount	14,523	13,333
Total capital, amount	16,321	15,097
Tier 1 leverage capital, amount	$ 14,523	$ 13,333
Ratio
Common Equity Tier 1 capital, ratio	16.80%	15.10%
Tier 1 capital ratio	16.80%	15.10%
Total capital ratio	18.90%	17.10%
Tier 1 leverage ratio	10.90%	10.20%
MSPBNA
Required Capital Ratio
Common Equity Tier 1 capital ratio, required	6.50%	6.50%
Tier 1 capital ratio, required	8.00%	8.00%
Total capital ratio, required	10.00%	10.00%
Tier 1 leverage ratio, required	5.00%	5.00%
MSPBNA | Standardized Approach transitional rules
Regulatory Requirements
Common Equity Tier 1 capital, amount	$ 5,153	$ 4,197
Tier 1 capital, amount	5,153	4,197
Total capital, amount	5,186	4,225
Tier 1 leverage capital, amount	$ 5,153	$ 4,197
Ratio
Common Equity Tier 1 capital, ratio	28.00%	26.50%
Tier 1 capital ratio	28.00%	26.50%
Total capital ratio	28.20%	26.70%
Tier 1 leverage ratio	11.40%	10.50%

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Total Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Treasury Shares
Authorized repurchase amount of outstanding common stock	$ 3,500		$ 3,500
Common stock repurchased	$ 625	$ 625	$ 1,250	$ 875
Common Stock, Dividends, Per Share, Declared	$ 0.15	$ 0.15	$ 0.3	$ 0.25
Nonredeemable Noncontrolling Interests
Noncontrolling interests	$ 1,259		$ 1,259		$ 1,002
Reduction in nonredeemable noncontrolling interests primarily related to deconsolidation of certain legal entities associated with a real estate fund				$ 191
Preferred Stock
Dividends, Preferred Stock	$ 156	$ 141	$ 234	$ 219

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Total Equity (Preferred Stock Outstanding) (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Class of Stock
Preferred stock carrying value	$ 7,520	$ 7,520
Series A Preferred Stock
Class of Stock
Preferred stock shares outstanding	44,000,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,100	1,100
Series C Preferred Stock
Class of Stock
Preferred stock shares outstanding	519,882,000,000
Liquidation preference per share	$ 1,000
Preferred stock carrying value	$ 408	408
Series C Preferred Stock | MUFG
Class of Stock
Preferred Stock Shares Issued	1,160,791
Preferred Stock, Value, Issued	$ 911
Preferred Stock Redemption Amount	$ 503
Preferred Stock Redemption Shares	640,909
Convert to common shares	$ 705
Series E Preferred Stock
Class of Stock
Preferred stock shares outstanding	34,500,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 862	862
Series F Preferred Stock
Class of Stock
Preferred stock shares outstanding	34,000,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 850	850
Series G Preferred Stock
Class of Stock
Preferred stock shares outstanding	20,000,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 500	500
Series H Preferred Stock
Class of Stock
Preferred stock shares outstanding	52,000,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,300	1,300
Series I Preferred Stock
Class of Stock
Preferred stock shares outstanding	40,000,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,000	1,000
Series J Preferred Stock
Class of Stock
Preferred stock shares outstanding	60,000,000,000
Liquidation preference per share	$ 25,000
Preferred stock carrying value	$ 1,500	$ 1,500

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Total Equity (Components of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Beginning balance	$ (1,238)	$ (1,266)	$ (1,656)	$ (1,248)
Cumulative adjustment for accounting change related to DVA			(312)
Other comprehensive income (loss) before reclassifications	378	(162)	1,142	(167)
Amounts reclassified from AOCI	(45)	(19)	(79)	(32)
Net other comprehensive income (loss) during the period	333	(181)	1,063	(199)
Ending balance	(905)	(1,447)	(905)	(1,447)
Provision for (benefit from) income taxes resulting from reclassification related to AFS securities	(26)	(11)	(30)	(20)
Provision for (benefit from) income taxes resulting from reclassification related to DVA			(15)
Debt Valuation Adjustment
Beginning balance	(110)	0	0	0
Cumulative adjustment for accounting change related to DVA			(312)
Other comprehensive income (loss) before reclassifications	143	0	371	0
Amounts reclassified from AOCI	0	0	(26)	0
Net other comprehensive income (loss) during the period	143	0	345	0
Ending balance	33	0	33	0
Foreign Currency Translation Adjustments
Beginning balance	(831)	(883)	(963)	(663)
Cumulative adjustment for accounting change related to DVA			0
Other comprehensive income (loss) before reclassifications	52	50	184	(170)
Amounts reclassified from AOCI	0	0	0	0
Net other comprehensive income (loss) during the period	52	50	184	(170)
Ending balance	(779)	(833)	(779)	(833)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale
Beginning balance	76	127	(319)	(73)
Cumulative adjustment for accounting change related to DVA			0
Other comprehensive income (loss) before reclassifications	188	(208)	590	7
Amounts reclassified from AOCI	(45)	(20)	(52)	(35)
Net other comprehensive income (loss) during the period	143	(228)	538	(28)
Ending balance	219	(101)	219	(101)
Pension, Postretirement and Other Related Adjustments
Beginning balance	(373)	(510)	(374)	(512)
Cumulative adjustment for accounting change related to DVA			0
Other comprehensive income (loss) before reclassifications	(5)	(4)	(3)	(4)
Amounts reclassified from AOCI	0	1	(1)	3
Net other comprehensive income (loss) during the period	(5)	(3)	(4)	(1)
Ending balance	$ (378)	$ (513)	$ (378)	$ (513)

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Earnings Per Common Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic EPS:
Income from continuing operations	$ 1,650	$ 1,833	$ 2,810	$ 4,301
Income (loss) from discontinued operations	(4)	(2)	(7)	(7)
Net income	1,646	1,831	2,803	4,294
Net income applicable to noncontrolling interests	64	24	87	93
Net income applicable to Morgan Stanley	1,582	1,807	2,716	4,201
Less: Preferred dividends	(156)	(141)	(234)	(219)
Less: Allocation of (earnings) loss to participating RSUs	(1)	(1)	(1)	(3)
Earnings applicable to Morgan Stanley common shareholders	$ 1,425	$ 1,665	$ 2,481	$ 3,979
Weighted average common shares outstanding	1,866	1,919	1,875	1,922
Earnings per basic common share:
Income from continuing operations	$ 0.77	$ 0.87	$ 1.33	$ 2.07
Income (loss) from discontinued operations	(0.01)	0	(0.01)	0
Earnings (loss) per basic common share	$ 0.76	$ 0.87	$ 1.32	$ 2.07
Diluted EPS:
Earnings applicable to Morgan Stanley common shareholders	$ 1,425	$ 1,665	$ 2,481	$ 3,979
Weighted average common shares outstanding	1,866	1,919	1,875	1,922
Effect of dilutive securities:
Stock options and RSUs	33	41	32	40
Weighted average common shares outstanding and common stock equivalents	1,899	1,960	1,907	1,962
Earnings per diluted common share:
Income from continuing operations	$ 0.75	$ 0.85	$ 1.3	$ 2.03
Income (loss) from discontinued operations	0	0	0	0
Earnings (loss) per diluted common share	$ 0.75	$ 0.85	$ 1.3	$ 2.03
Antidilutive securities outstanding	14	12	15	12

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Earnings Per Common Share (Antidilutive Securities Excluded from the Computation of Diluted EPS) (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Antidilutive securities outstanding	14	12	15	12

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Interest Income and Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest income:
Trading assets	$ 526	$ 555	$ 1,109	$ 1,149
Investment securities	237	238	473	438
Loans	680	529	1,327	1,004
Interest bearing deposits with banks	52	22	105	45
Interest income securities purchased under agreements to resell and securities borrowed	(120)	(200)	(198)	(305)
Customer receivables and Other	292	242	598	539
Total Interest income	1,667	1,386	3,414	2,870
Interest expense:
Deposits	15	17	37	35
Short-term borrowings	7	5	14	9
Long-term borrowings	844	915	1,804	1,841
Securities sold under agreements to repurchase and Securities loaned	259	235	513	543
Customer payables and Other	(371)	(484)	(766)	(852)
Total Interest expense	754	688	1,602	1,576
Net interest	$ 913	$ 698	$ 1,812	$ 1,294

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Employee Benefit Plans (Net Periodic Benefit Expense) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Components of Net Periodic Benefit Expense (Income)
Service cost, benefits earned during the period	$ 4	$ 5	$ 8	$ 10
Interest cost on projected benefit obligation	39	38	77	77
Expected return on plan assets	(30)	(29)	(60)	(59)
Net amortization of prior service cost	(5)	(5)	(9)	(10)
Net amortization of actuarial loss	3	7	6	13
Net periodic benefit expense	$ 11	$ 16	$ 22	$ 31

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Income Taxes (Reconciliation of the Effective Income Tax Rate) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)
Repatriation of non-U.S. earnings at a cost lower than originally estimated due to an internal restructuring to simplify the Company's legal entity organization in the U.K.
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation
Aggregate discrete net tax expense (benefit) from continuing operations	$ (564)

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Segment and Geographic Information (Selected Financial Information by Segments) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Segment Reporting Information
Total non-interest revenues	$ 7,996	$ 9,045	$ 14,889	$ 18,356
Interest income	1,667	1,386	3,414	2,870
Interest expense	754	688	1,602	1,576
Net interest	913	698	1,812	1,294
Net revenues	8,909	9,743	16,701	19,650
Income (loss) from continuing operations before income taxes	2,483	2,727	4,221	5,582
Provision for income taxes	833	894	1,411	1,281
Income from continuing operations	1,650	1,833	2,810	4,301
Discontinued operations:
Income (loss) from discontinued operations, net of income taxes	(4)	(2)	(7)	(7)
Net income (loss)	1,646	1,831	2,803	4,294
Net income applicable to noncontrolling interests	64	24	87	93
Net income (loss) applicable to Morgan Stanley	1,582	1,807	2,716	4,201
Segment Reporting Information, Additional Information
Performance-based fee revenue at risk	421		421		$ 422
Reduction of fees	12	50	35	100
Intersegment Eliminations
Segment Reporting Information
Total non-interest revenues	(63)	(55)	(130)	(109)
Interest income	(222)	(119)	(443)	(243)
Interest expense	(222)	(119)	(443)	(243)
Net interest	0	0	0	0
Net revenues	(63)	(55)	(130)	(109)
Income (loss) from continuing operations before income taxes	0	0	0	0
Provision for income taxes	0	0	0	0
Income from continuing operations	0	0	0	0
Discontinued operations:
Income (loss) from discontinued operations, net of income taxes	0	0	0	0
Net income (loss)	0	0	0	0
Net income applicable to noncontrolling interests	0	0	0	0
Net income (loss) applicable to Morgan Stanley	0	0	0	0
Institutional Securities
Segment Reporting Information
Total non-interest revenues	4,496	5,205	8,141	10,751
Interest income	966	723	2,019	1,593
Interest expense	884	756	1,868	1,714
Net interest	82	(33)	151	(121)
Net revenues	4,578	5,172	8,292	10,630
Income (loss) from continuing operations before income taxes	1,506	1,622	2,414	3,435
Provision for income taxes	453	511	728	517
Income from continuing operations	1,053	1,111	1,686	2,918
Discontinued operations:
Income (loss) from discontinued operations, net of income taxes	(4)	(2)	(7)	(7)
Net income (loss)	1,049	1,109	1,679	2,911
Net income applicable to noncontrolling interests	61	22	100	74
Net income (loss) applicable to Morgan Stanley	988	1,087	1,579	2,837
Segment Reporting Information, Additional Information
Other Income tax benefit				564
Wealth Management
Segment Reporting Information
Total non-interest revenues	2,982	3,138	5,819	6,283
Interest income	920	782	1,834	1,519
Interest expense	91	45	174	93
Net interest	829	737	1,660	1,426
Net revenues	3,811	3,875	7,479	7,709
Income (loss) from continuing operations before income taxes	859	885	1,645	1,740
Provision for income taxes	343	324	636	644
Income from continuing operations	516	561	1,009	1,096
Discontinued operations:
Income (loss) from discontinued operations, net of income taxes	0	0	0	0
Net income (loss)	516	561	1,009	1,096
Net income applicable to noncontrolling interests	0	0	0	0
Net income (loss) applicable to Morgan Stanley	516	561	1,009	1,096
Investment Management
Segment Reporting Information
Total non-interest revenues	581	757	1,059	1,431
Interest income	3	0	4	1
Interest expense	1	6	3	12
Net interest	2	(6)	1	(11)
Net revenues	583	751	1,060	1,420
Income (loss) from continuing operations before income taxes	118	220	162	407
Provision for income taxes	37	59	47	120
Income from continuing operations	81	161	115	287
Discontinued operations:
Income (loss) from discontinued operations, net of income taxes	0	0	0	0
Net income (loss)	81	161	115	287
Net income applicable to noncontrolling interests	3	2	(13)	19
Net income (loss) applicable to Morgan Stanley	$ 78	$ 159	$ 128	$ 268

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Segment and Geographic Information (Assets by Segments) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Segment Reporting Information
Assets		$ 828,873	$ 787,465
Reduction in nonredeemable noncontrolling interests primarily related to deconsolidation of certain legal entities associated with a real estate fund	$ 191
Institutional Securities
Segment Reporting Information
Assets		641,373	602,714
Wealth Management
Segment Reporting Information
Assets		182,801	179,708
Investment Management
Segment Reporting Information
Assets		$ 4,699	$ 5,043

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Segment and Geographic Information (Net Revenues by Geographic Area) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information
Net Revenues	$ 8,909	$ 9,743	$ 16,701	$ 19,650
Americas
Segment Reporting Information
Net Revenues	6,538	6,777	12,290	13,707
EMEA
Segment Reporting Information
Net Revenues	1,312	1,436	2,441	3,198
Asia-Pacific
Segment Reporting Information
Net Revenues	$ 1,059	$ 1,530	$ 1,970	$ 2,745

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Billions			1 Months Ended		3 Months Ended		6 Months Ended
	Jul. 25, 2016	Jul. 20, 2016	Aug. 03, 2016	Jul. 29, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Subsequent Event
Dividends declared per common share					$ 0.15	$ 0.15	$ 0.3	$ 0.25
Subsequent Event
Subsequent Event
Dividends declared per common share		$ 0.2
Dividends declared date		Jul. 20, 2016
Dividend payable date		Aug. 15, 2016
Shareholders of record, date		Jul. 29, 2016
Increase in long-term borrowings				$ 3.4
Impact on EPS
Trust preferred securities redemption, total			$ 2.8
Subsequent Event | Senior Debt
Subsequent Event
Debt issuances	$ 3.0