Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MS | ||
Entity Registrant Name | MORGAN STANLEY | ||
Entity Central Index Key | 895,421 | ||
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 Public Float | $ 77,833,014,763 | ||
Entity Common Stock, Shares Outstanding | 1,791,846,388 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Investment banking | $ 6,003 | $ 4,933 | $ 5,594 |
Trading | 11,116 | 10,209 | 10,114 |
Investments | 820 | 160 | 541 |
Commissions and fees | 4,061 | 4,109 | 4,554 |
Asset management | 11,797 | 10,697 | 10,766 |
Other | 848 | 825 | 493 |
Total non-interest revenues | 34,645 | 30,933 | 32,062 |
Interest income | 8,997 | 7,016 | 5,835 |
Interest expense | 5,697 | 3,318 | 2,742 |
Net interest | 3,300 | 3,698 | 3,093 |
Net revenues | 37,945 | 34,631 | 35,155 |
Non-interest expenses | |||
Compensation and benefits | 17,166 | 15,878 | 16,016 |
Occupancy and equipment | 1,329 | 1,308 | 1,382 |
Brokerage, clearing and exchange fees | 2,093 | 1,920 | 1,892 |
Information processing and communications | 1,791 | 1,787 | 1,767 |
Marketing and business development | 609 | 587 | 681 |
Professional services | 2,169 | 2,128 | 2,298 |
Other | 2,385 | 2,175 | 2,624 |
Total non-interest expenses | 27,542 | 25,783 | 26,660 |
Income from continuing operations before income taxes | 10,403 | 8,848 | 8,495 |
Provision for income taxes | 4,168 | 2,726 | 2,200 |
Income from continuing operations | 6,235 | 6,122 | 6,295 |
Income (loss) from discontinued operations, net of income taxes | (19) | 1 | (16) |
Net income | 6,216 | 6,123 | 6,279 |
Net income applicable to noncontrolling interests | 105 | 144 | 152 |
Net income applicable to Morgan Stanley | 6,111 | 5,979 | 6,127 |
Preferred stock dividends and other | 523 | 471 | 456 |
Earnings applicable to Morgan Stanley common shareholders | $ 5,588 | $ 5,508 | $ 5,671 |
Earnings per basic common share | |||
Income from continuing operations | $ 3.15 | $ 2.98 | $ 2.98 |
Income (loss) from discontinued operations | (0.01) | 0 | (0.01) |
Earnings per basic common share | 3.14 | 2.98 | 2.97 |
Earnings per diluted common share | |||
Income from continuing operations | 3.08 | 2.92 | 2.91 |
Income (loss) from discontinued operations | (0.01) | 0 | (0.01) |
Earnings per diluted common share | 3.07 | 2.92 | 2.9 |
Dividends declared per common share | $ 0.9 | $ 0.7 | $ 0.55 |
Average common shares outstanding | |||
Basic | 1,780 | 1,849 | 1,909 |
Diluted | 1,821 | 1,887 | 1,953 |
Consolidated Comprehensive Inco
Consolidated Comprehensive Income Statements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Comprehensive Income Statements | |||
Net income | $ 6,216 | $ 6,123 | $ 6,279 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 251 | (11) | (304) |
Change in net unrealized gains (losses) on available-for-sale securities | 41 | (269) | (246) |
Pension, postretirement and other | (117) | (100) | 138 |
Change in net debt valuation adjustment | (588) | (296) | 0 |
Total other comprehensive income (loss) | (413) | (676) | (412) |
Comprehensive income | 5,803 | 5,447 | 5,867 |
Net income applicable to noncontrolling interests | 105 | 144 | 152 |
Other comprehensive income (loss) applicable to noncontrolling interests | 4 | (1) | (4) |
Comprehensive income applicable to Morgan Stanley | $ 5,694 | $ 5,304 | $ 5,719 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and due from banks | $ 24,816 | $ 22,017 |
Interest bearing deposits with banks | 21,348 | 21,364 |
Restricted cash | 34,231 | 33,979 |
Trading assets at fair value ($169,735 and $152,548 were pledged to various parties) | 298,282 | 262,154 |
Investment securities (includes $55,203 and $63,170 at fair value) | 78,802 | 80,092 |
Securities purchased under agreements to resell (includes $0 and $302 at fair value) | 84,258 | 101,955 |
Securities borrowed | 124,010 | 125,236 |
Customer and other receivables | 56,187 | 46,460 |
Held for investment (net of allowance of $224 and $274) | 92,953 | 81,704 |
Held for sale | 11,173 | 12,544 |
Goodwill | 6,597 | 6,577 |
Intangible assets (net of accumulated amortization of $2,730 and $2,421) | 2,448 | 2,721 |
Other assets | 16,628 | 18,146 |
Total assets | 851,733 | 814,949 |
Liabilities | ||
Deposits (includes $204 and $63 at fair value) | 159,436 | 155,863 |
Trading liabilities at fair value | 131,295 | 128,194 |
Securities sold under agreements to repurchase (includes $800 and $729 at fair value) | 56,424 | 54,628 |
Securities loaned | 13,592 | 15,844 |
Other secured financings (includes $3,863 and $5,041 at fair value) | 11,271 | 11,118 |
Customer and other payables | 191,510 | 190,513 |
Other liabilities and accrued expenses | 17,157 | 15,896 |
Borrowings (includes $46,912 and $39,142 at fair value) | 192,582 | 165,716 |
Total liabilities | 773,267 | 737,772 |
Commitments and contingent liabilities | ||
Equity | ||
Preferred stock | 8,520 | 7,520 |
Common stock, $0.01 par value: Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,788,086,805 and 1,852,481,601 | 20 | 20 |
Additional paid-in capital | 23,545 | 23,271 |
Retained earnings | 57,577 | 53,679 |
Employee stock trusts | 2,907 | 2,851 |
Accumulated other comprehensive income (loss) | (3,060) | (2,643) |
Common stock held in treasury at cost, $0.01 par value (250,807,174 and 186,412,378 shares) | (9,211) | (5,797) |
Common stock issued to employee stock trusts | (2,907) | (2,851) |
Total Morgan Stanley shareholders' equity | 77,391 | 76,050 |
Noncontrolling interests | 1,075 | 1,127 |
Total equity | 78,466 | 77,177 |
Total liabilities and equity | $ 851,733 | $ 814,949 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Trading assets pledged to various parties | $ 169,735 | $ 152,548 |
Investment securities at fair value | 55,203 | 63,170 |
Securities purchased under agreement to resell at fair value | 0 | 302 |
Allowance for loans held for investment | 224 | 274 |
Intangible assets, accumulated amortization | 2,730 | 2,421 |
Deposits at fair value | 204 | 63 |
Securities sold under agreement to repurchase at fair value | 800 | 729 |
Other secured financings at fair value | 3,863 | 5,041 |
Borrowings at fair value | $ 46,912 | $ 39,142 |
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 | 1,788,086,805 | 1,852,481,601 |
Common stock held in treasury, shares | 250,807,174 | 186,412,378 |
Consolidated Statements of Chan
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 | 6,127 | 0 | 0 | 0 | 6,127 | 0 | 0 | 0 | 0 | 0 | |
Net income applicable to noncontrolling interests | 152 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 152 | |
Dividends | (1,548) | 0 | 0 | 0 | (1,548) | 0 | 0 | 0 | 0 | 0 | |
Shares issued under employee plans and related tax effects | 1,401 | 0 | 0 | (79) | 0 | 282 | 0 | 1,480 | (282) | 0 | |
Repurchases of common stock and employee tax withholdings | (2,773) | 0 | 0 | 0 | 0 | 0 | 0 | (2,773) | 0 | 0 | |
Net change in Accumulated other comprehensive income (loss) | (412) | 0 | 0 | 0 | 0 | 0 | (408) | 0 | 0 | (4) | |
Issuance of preferred stock | 1,493 | 1,500 | 0 | (7) | 0 | 0 | 0 | 0 | 0 | 0 | |
Deconsolidation of certain legal entities associated with a real estate fund | (191) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (191) | |
Other net increases (decreases) | (169) | 0 | 0 | (10) | 0 | 0 | 0 | 0 | 0 | (159) | |
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 | [1] | 0 | 0 | 0 | 0 | 312 | 0 | (312) | 0 | 0 | 0 |
Net adjustment for accounting change related to consolidation | [2] | 106 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 106 |
Net income applicable to Morgan Stanley | 5,979 | 0 | 0 | 0 | 5,979 | 0 | 0 | 0 | 0 | 0 | |
Net income applicable to noncontrolling interests | 144 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 144 | |
Dividends | (1,816) | 0 | 0 | 0 | (1,816) | 0 | 0 | 0 | 0 | 0 | |
Shares issued under employee plans and related tax effects | 1,303 | 0 | 0 | (892) | 0 | 442 | 0 | 2,195 | (442) | 0 | |
Repurchases of common stock and employee tax withholdings | (3,933) | 0 | 0 | 0 | 0 | 0 | 0 | (3,933) | 0 | 0 | |
Net change in Accumulated other comprehensive income (loss) | (676) | 0 | 0 | 0 | 0 | 0 | (675) | 0 | 0 | (1) | |
Other net increases (decreases) | (114) | 0 | 0 | 10 | 0 | 0 | 0 | 0 | 0 | (124) | |
Balance at at Dec. 31, 2016 | 77,177 | 7,520 | 20 | 23,271 | 53,679 | 2,851 | (2,643) | (5,797) | (2,851) | 1,127 | |
Cumulative adjustment for accounting changes | [3] | 10 | 0 | 0 | 45 | (35) | 0 | 0 | 0 | 0 | 0 |
Net income applicable to Morgan Stanley | 6,111 | 0 | 0 | 0 | 6,111 | 0 | 0 | 0 | 0 | 0 | |
Net income applicable to noncontrolling interests | 105 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 105 | |
Dividends | (2,178) | 0 | 0 | 0 | (2,178) | 0 | 0 | 0 | 0 | 0 | |
Shares issued under employee plans | 1,184 | 0 | 0 | 306 | 0 | 56 | 0 | 878 | (56) | 0 | |
Repurchases of common stock and employee tax withholdings | (4,292) | 0 | 0 | 0 | 0 | 0 | 0 | (4,292) | 0 | 0 | |
Net change in Accumulated other comprehensive income (loss) | (413) | 0 | 0 | 0 | 0 | 0 | (417) | 0 | 0 | 4 | |
Issuance of preferred stock | 994 | 1,000 | 0 | (6) | 0 | 0 | 0 | 0 | 0 | 0 | |
Other net increases (decreases) | (232) | 0 | 0 | (71) | 0 | 0 | 0 | 0 | 0 | (161) | |
Balance at at Dec. 31, 2017 | $ 78,466 | $ 8,520 | $ 20 | $ 23,545 | $ 57,577 | $ 2,907 | $ (3,060) | $ (9,211) | $ (2,907) | $ 1,075 | |
[1] | DVA—represents the change in fair value resulting from fluctuations in our credit spreads and other credit factors related to liabilities carried at fair value under the fair value option, primarily related to certain Borrowings (structured notes) . 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 unrealized DVA amount, net of noncontrolling interests and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOC I . See Note 15 for further information. | ||||||||||
[2] | In accordance with the accounting update Amendments t o the Consolidation Analysis , a net adjustment was recorded as of January 1, 2016 to both consolidate and deconsolidate certain entities under the new guidance. | ||||||||||
[3] | The cumulative adjustment relates to the adoption of the following accounting updates on January 1, 2017 : Improvements to Employee Share-Based Payment Accounting , for which the Firm recorded a cumulative catch-up adjustment to reflect its election to account for forfeitures as they occur (see Note 2 for further information) ; and Intra -Entity Transfers of Assets Other Than Inventory , for which the Firm recorded a cumulative catch-up adjustment to reflect the tax impact from an intercompany sale of assets . |
Consolidated Cash Flow Statemen
Consolidated Cash Flow Statements $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Cash flows from operating activities | |||
Net income | $ 6,216 | $ 6,123 | $ 6,279 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||
Deferred income taxes | 2,747 | 1,579 | 1,189 |
(Income) loss from equity method investments | 34 | 79 | (114) |
Stock-based compensation expense | 1,026 | 1,136 | 1,104 |
Depreciation and amortization | 1,753 | 1,736 | 1,433 |
Net gain on sale of available-for-sale securities | (35) | (112) | (84) |
Impairment charges | 91 | 130 | 69 |
Provision for credit losses on lending activities | 29 | 144 | 123 |
Other operating adjustments | 63 | (199) | 322 |
Changes in assets and liabilities: | |||
Trading assets, net of Trading liabilities | (27,588) | (24,079) | 30,212 |
Securities borrowed | 1,226 | 17,180 | (5,708) |
Securities loaned | (2,252) | (3,514) | (5,861) |
Customer and other receivables and other assets | (9,315) | (371) | (434) |
Customer and other payables and other liabilities | 2,007 | 1,913 | 4,633 |
Securities purchased under agreements to resell | 17,697 | (14,298) | (4,369) |
Securities sold under agreements to repurchase | 1,796 | 17,936 | (33,257) |
Net cash provided by (used for) operating activities | (4,505) | 5,383 | (4,463) |
Cash flows from investing activities | |||
Other assets-Premises, equipment and software, net | (1,629) | (1,276) | (1,373) |
Business dispositions, net of cash disposed | 0 | 0 | 998 |
Changes in loans, net | (12,125) | (9,604) | (15,816) |
Investment securities: | |||
Purchases | (23,962) | (50,911) | (47,291) |
Proceeds from sales | 18,131 | 33,716 | 37,926 |
Proceeds from paydowns and maturities | 7,445 | 8,367 | 5,663 |
Other investing activities | (251) | 200 | (102) |
Net cash provided by (used for) investing activities | (12,391) | (19,508) | (19,995) |
Cash flows from financing activities | |||
Noncontrolling interests | (83) | (96) | (96) |
Other secured financings | (1,573) | 1,333 | (2,370) |
Deposits | 3,573 | (171) | 22,490 |
Proceeds from: | |||
Derivatives financing activities | 73 | 0 | 512 |
Issuance of preferred stock, net of issuance costs | 994 | 0 | 1,493 |
Issuance of Borrowings | 55,416 | 43,626 | 34,182 |
Payments for: | |||
Borrowings | (35,825) | (31,596) | (27,377) |
Derivatives financing activities | (73) | (120) | (452) |
Repurchases of common stock and employee tax withholdings | (4,292) | (3,933) | (2,773) |
Cash dividends | (2,085) | (1,746) | (1,455) |
Other financing activities | 136 | 66 | 0 |
Net cash provided by (used for) financing activities | 16,261 | 7,363 | 24,154 |
Effect of exchange rate changes on cash and cash equivalents | 3,670 | (1,430) | (1,735) |
Net increase (decrease) in cash and cash equivalents | 3,035 | (8,192) | (2,039) |
Cash and cash equivalents, at beginning of period | 77,360 | 85,552 | 87,591 |
Cash and cash equivalents, at end of period | 80,395 | 77,360 | 85,552 |
Cash and cash equivalents: | |||
Cash and due from banks | 24,816 | 22,017 | 19,827 |
Interest bearing deposits with banks | 21,348 | 21,364 | 34,256 |
Restricted cash | 34,231 | 33,979 | 31,469 |
Cash and cash equivalents, at end of period | 80,395 | 77,360 | 85,552 |
Supplemental Disclosure of Cash Flow Information | |||
Cash payments for interest | 5,377 | 2,834 | 2,672 |
Cash payments for income taxes, net of refunds | $ 1,390 | $ 831 | $ 677 |
Introduction and Basis of Prese
Introduction and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Introduction and Basis of Presentation | |
Introduction and Basis of Presentation | 1 . Introduction and Basis of Presentation The Firm Morgan Stanley, an FHC , 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 Company”) together with its consolidated subsidiaries . See the “Glossary of Common Acronyms” for definitions of certain acronyms used throughout the 2017 Form 10-K. A descr iption of the clients and principal products and services of each of the Firm’s business segments is as follows: Institutional Securities provides investment banking, sales and trading, lending and other services to corporations, governments, financial i nstitutions, and high to ultra-high net worth clients. Investment banking services consist of capital raising and financial advisory services, including services relating to the underwriting of debt, equity and other securities, as well as advice on merger s and acquisitions, restructurings, real estate and project finance. Sales and trading services include sales, financing and market-making activities in equity and fixed income products, including foreign exchange and commodities, as well as prime brokerag e services. Lending services include originating and/or purchasing corporate loans, commercial and residential mortgage lending, asset-backed lending, financing extended to equities and commodities customers, and loans to municipalities. Other activities i nclude 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, financ ial 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 clas ses, and public and private markets to a diverse group of clients across institutional and intermediary channels. Strategies and products include equity, fixed income, liquidity and alternative/other products. Institutional clients include defined benefit/ defined contribution plans, 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-affiliat ed distributors. Basis of Financial Information The consolidated financial statements (“financial statements”) are prepared in accordance with 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 financial statements and related disclosures. Th e Firm believes that the estimates utilized in the preparation of its financial statements are prudent and reasonable. Actual results could differ materially from these estimates. Intercompany balances and transactions have been eliminated. Certain reclass ifications have been made to prior periods to conform to the current presentation. Consolidation The 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 VIEs (see Note 13 ). 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 inter ests for such subsidiaries is presented as Net income applicable to noncontrolling interests in the consolidated income statements (“income statements”) . The portion of shareholders’ equity that is attributable to noncontrolling interests for such subsidia ries is presented as noncontrolling interests, a component of total equity, in the consolidated balance sheets ( “balance sheets”) . For entities where (1) the total equity investment at risk is sufficient to enable the entity to finance its activities wit hout additional subordinated financial support and (2) the equity holders bear the economic residual risks and returns of the entity and have the power to direct the activities of the entity that most significantly affect its economic performance, the Firm consolidates those entities it controls either through a majority voting interest or otherwise. For VIEs ( i.e. , entities that do not meet these criteria), the Firm consolidates those entities where it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE . For investments in entities in which the Firm does not have a controlling financial interest but has significant influence over operating and financial decisions, it applies the equity method of accounting with net gains and losses recorded within Other revenues (see Note 8 ) unless the Firm has elected to measure the investme nt at fair value , in which case net gains and losses are recorded within Investments revenues (see Note 3 ). Equity and partnership interests held by entities qualifying for accountin g purposes as investment companies are carried at fair value. The Firm’s significant regulated U.S. and international subsidiaries include Morgan Stanley & Co. LLC (“ MS&Co. ”) , Morgan Stanley Smith Barney LLC (“ MSSB LLC ”) , Morgan Stanley & Co. Internatio nal plc (“ MSIP ”) , Morgan Stanley MUFG Securities Co., Ltd. (“ MSMS ”) , Morgan Stanley Bank, N.A. (“ MSBNA ”) and Morgan Stanley Private Bank, National Association (“ MSPBNA ”). Consolidated Cash Flow Statements Presentation For purposes of the consolidated cash flow statements ( “ cash flow statements ”) , cash and cash equivalents consist of Cash and due from banks, Interest bearing deposits with banks and Restricted cash. Cash and cash equivalents includes highly liquid investments with original maturities of three months or less that are held for investment purposes and are readily convertible to known amounts of cash. Restricted cash represents cash subject to withdrawal or usage restrictions and includes cash in banks subject to withdrawal restrictions, restricted deposits held as compensating balances, and cash segregated in compliance with federal or other regulations. Dispositions The Firm completed the sale of its global oil merchanting unit of the commodities division to Castleton Commodities Inter national LLC on November 1, 2015. The Firm recognized an impairment charge of approximately $ 71 million in Other revenues. The transaction did not meet the criteria for discontinued operations and did not have a material impact on the Firm’s financial resu lts. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2 . Significant Accounting Policies Revenue Recognition Investment Banking Underwriting revenues and advisory fees from mergers, acquisitions and restructuring transactions are recorded when services for the transactions are determined to be substantially completed, generally as set forth under the terms of the engagement. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenues. Underwriting revenues are presented net of related expenses. Non-reimbursed expenses associated with advisory transactions are recorded within Non-interest expenses. Commissions and Fees Comm ission and fee revenues are recognized on trade date. Commission and fee revenues primarily arise from agency transactions in listed and OTC equity securities; services related to sales and trading activities; and sales of mutual funds, futures, insurance products and options. Asset Management Asset management revenues are recognized over the relevant contract period. Sales commissions paid by the Firm in connection with the sale of certain classes of shares of its open-end mutual fund products are accounted for as deferred commission assets. The Firm periodically tests deferred commission assets for recoverability based on cash flows expected to be received in future periods. In ce rtain management fee arrangements, the Firm is entitled to receive performance-based fees (which also may be referred to as incentive fees and which include carried interest) when the return on assets under management exceeds certain benchmark returns or o ther performance targets. In such arrangements, performance fee revenues are accrued (or reversed) quarterly based on measuring account or fund performance to date versus the performance benchmark stated in the investment management agreement. Performance- based fees are recorded within Investments or Asset management revenues depending on the nature of the arrangement. See Note 21 for information regarding the unrealized cumulative amount of performance-based fee revenues . See Note 12 for informati on regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received. Fair Value of Financial Instruments Instruments within Trading assets and Trading liabilities are measured at fair value, either in accordance with accounting guidance or through the fair value option election (discussed below). These financial instruments primarily represent the Firm’s trading and investment positions and include both cash and derivative products. In addition, debt and equity securities classified as AFS securities are measured at fair value. Gains and losses on instruments carried at fair value are reflected in Trading revenues, Investments revenues or Investment ba nking reven ues in the income statements, except for AFS securities (see “ Investment Securities —A FS and HTM securities ” section herein and Note 5 ) and derivatives accounted for as hedges (see “Hedge Accounting” section herein and Note 4 ). Intere st income and interest expense are r ecorded within the income statements depending on the nature of the instrument and related market conventions. When interest is included as a component of the instruments’ fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense. Dividend income is recorded in Trading revenues or Investments revenues depending on the business activity. The fair value of OTC financial instrument s, including derivative contracts related to financial instruments and commodities, is presented i n the accompanying balance sheets on a net-by-counterparty basis, when appropriate. Additionally, the Firm nets the fair value of cash collateral pa id or received against the fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting agreement. Fair Value Option The Firm has elected to measure certain eligible instruments at fai r value , including certain Securities purchased under agreements to resell, loans and lending commitments, equity method investments, Deposits (structured certificate s of deposit) , Securities sold under agreements to repurchase, Oth er secured financings an d B orrowings (primarily structured notes). Fair Value Measurement—Definition and Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability ( i.e. , the “exit price”) in an orderly transaction between market participants at the measurement date. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are set to reflect those that the Firm believes market participants would use in pricing the asset or liability at the measurement date. Where the Firm manages a group of financial assets and financial liabilities on the basis of its net exposure to either market risks or credit risk, the Firm measures the fair value of that group of f inancial instruments consistently with how market participants would price the net risk exposure at the measurement date. In determining fair value, the Firm uses various valuation approaches and establishes a hierarchy for inputs used in measuring fair v alue that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the ass et or liability that were developed based on market data obtained from sources independent of the Firm. Unobservable inputs are inputs that reflect assumptions the Firm believes other market participants would use in pricing the asset or liability that are developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows , with Level 1 being the highest and Level 3 being the lowest level : Level 1. Valuat ions based on quoted prices in active markets that the Firm has the ability to access for identical assets or liabilities. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that ar e readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2. Valuations based on one or more quoted prices in markets that are not active or for which all signifi cant inputs are observable, either directly or indirectly. Level 3. Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the product. To the extent that v aluation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Firm in determining fair value is greatest for instru ments categorized in Level 3 of the fair value hierarchy. The Firm considers prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3 of the fair value hierarchy (see Note 3 ). In certain cases, the inputs used to measure fair valu e may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. For assets and liabilities that are transferred between levels in the fair value hierarchy during the period, fair values are ascribed as if the assets or liabilities had been transferred as of the beginning of the period. Valuation Techniques Many cash instruments and OTC derivative contracts have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that a party is willing to pay for an asset. Ask prices represent the lowest price that a party is willing to accept for an asset. The Firm carries positions at the point within the bid-ask range that meet s its best estimate of fair value. For offsetting positions in the same financial instrument, th e same price within the bid-ask spread is used to measure both the long and short positions. Fair value for many cash instruments and OTC derivative contracts is derived using pricing models. Pricing models take into account the contract terms, as well as multiple inputs, including, where applicable, commodity prices, equity prices, interest rate yield curves, credit curves, correlation, creditworthiness of the counterparty, creditworthiness of the Firm, option volatility and currency rates. Where appr opriate, valuation adjustments are made to account for various factors such as liquidity risk (bid-ask adjustments), credit quality, model uncertainty and concentration risk. Adjustments for liquidity risk adjust model-derived mid-market levels of Level 2 and Level 3 financial instruments for the bid-mid or mid-ask spread required to properly reflect the exit price of a risk position. Bid-mid and mid-ask spreads are marked to levels observed in trade activity, broker quotes or other external third-party dat a. Where these spreads are unobservable for the particular position in question, spreads are derived from observable levels of similar positions. The Firm applies credit-related valuation adjustments t o its B orrowings (primarily structured notes) for whi ch the fair value option was elected and to OTC derivatives. The Firm considers the impact of changes in its own credit spreads based upon observations of the secondary bond market spreads when measuring the fair valu e for B orrowings. For OTC derivatives , the impact of changes in both the Firm’s and the counterparty’s credit rating is considered when measuring fair value. In determining the expected exposure, the Firm simulates the distribution of the future exposure to a counterparty, then applies market -based default probabilities to the future exposure, leveraging external third-party CDS spread data. Where CDS spread data are unavailable for a specific counterparty, bond market spreads, CDS spread data based on the counterparty’s credit rating or CDS s pread data that reference a comparable counterparty may be utilized. The Firm also considers collateral held and legally enforceable master netting agreements that mitigate its exposure to each counterparty. Adjustments for model uncertainty are taken fo r positions whose underlying models are reliant on significant inputs that are neither directly nor indirectly observable, hence requiring reliance on established theoretical concepts in their derivation. These adjustments are derived by making assessments of the possible degree of variability using statistical approaches and market-based information where possible. The Firm may apply a concentration adjustment to certain of its OTC derivatives portfolios to reflect the additional cost of closing out a pa rticularly large risk exposure. Where possible, these adjustments are based on observable market information, but in many instances, significant judgment is required to estimate the costs of closing out concentrated risk exposures due to the lack of liquid ity in the marketplace. The Firm applies an FVA in the fair value measurements of OTC uncollateralized or partially collateralized derivatives and in collateralized derivatives where the terms of the agreement do not permit the reuse of the collateral received. In general, FVA reflects a market funding risk premium inherent in the noted derivative instruments. The methodology for measuring FVA leverages the Firm’s existing credit-related valuation adjustment calculation methodologies, which apply to bot h assets and liabilities. See Note 3 for a description of valuation techniques applied to the major categories of financial instruments measured at fair value. Assets and Liabilities M easured at Fair Value on a Nonr ecurring Basis Certain of the Firm’s assets and liabilities are measured at fair value on a non-recurring basis. The Firm incurs losses or gains for any adjustments of these assets or liabilities to fair value. For assets and liabilities measured at fair value on a no n-recurring basis, fair value is determined by using various valuation approaches. The same hierarchy for inputs as described above, which maximizes the use of observable inputs and minimizes the use of unobservable inputs by generally requiring that the o bservable inputs be used when available, is used in measuring fair value for these items. Valuation Process The Valuation Review Group (“VRG”) within the Firm’s Financial Control Group (“FCG”) is responsible for the Firm’s fair value valuation poli cies, processes and procedures. VRG is independent of the business units and reports to the Chief Financial Officer , who has final authority over the valuation of the Firm’s financial instruments. VRG implements valuation control processes designed to vali date the fair value of the Firm’s financial instruments measured at fair value, including those derived from pricing models. Model Review. VRG, in conjunction with the Model Risk Management Department (“MRM”) , which reports to the Chief Risk Officer, independently review s valuation models’ theoretical soundness, the appropriateness of the valuation methodology and calibration techniques developed by the business units using observable inputs. Where inputs are not observable, VRG reviews the appropriat eness of the proposed valuation methodology to determine that it is consistent with how a market participant would arrive at the unobservable input. The valuation methodologies utilized in the absence of observable inputs may include extrapolation techniqu es and the use of comparable observable inputs. As part of the review, VRG develops a methodology to independently verify the fair value generated by the business unit’s valuation models. The Firm generally subjects valuations and models to a review proces s initially and on a periodic basis thereafter. Independent Price Verification. The business units are responsible for determining the fair value of financial instruments using approved valuation models and valuation methodologies. Generally on a mont hly basis, VRG independently validates the fair values of financial instruments determined using valuation models by determining the appropriateness of the inputs used by the business units and by testing compliance with the documented valuation methodolog ies approved in the model review process described above. The results of this independent price verification and any adjustments made by VRG to the fair value generated by the business units are presented to management of the Firm’s three business segmen ts ( i.e., Institutional Securities, Wealth Management and Investment Management), the C hief Financial Officer and the Chief Risk Officer on a regular basis. VRG uses recently executed transactions, other observable market data such as exchange data, brok er-dealer quotes, third-party pricing vendors and aggregation services for validating the fair value of financial instruments generated using valuation models. VRG assesses the external sources and their valuation methodologies to determine if the external providers meet the minimum standards expected of a third-party pricing source. Pricing data provided by approved external sources are evaluated using a number of approaches; for example, by corroborating the external sources’ prices to executed trades, by analyzing the methodology and assumptions used by the external source to generate a price, and/or by evaluating how active the third-party pricing source (or originating sources used by the third-party pricing source) is in the market. Based on this analy sis, VRG generates a ranking of the observable market data designed to ensure that the highest-ranked market data source is used to validate the business unit’s fair value of financial instruments. VRG reviews the models and valuation methodology used t o price new material Level 2 and Level 3 transactions, and both FCG and MRM must approve the fair value of the trade that is initially recognized. Level 3 Transactions. VRG reviews the business unit’s valuation techniques to assess whether these are cons istent with market participant assumptions. For further information on financial assets and liabilities that are measured at fair value on a recurring and non-recurring basis, see Note 3 . Offsetting of Derivative Instruments In connection with its derivative activities, the Firm generally enters into master netting agreements and collateral agreements with its counterparties. These agreements provide the Firm with the right, in the event of a default by the counterparty, to net a counterparty's righ ts and obligations under the agreement and to liquidate and set off collateral against any net amount owed by the counterparty. However, in certain circumstances, the Firm may not have such an agreement in place; the relevant insolvency regime may not support the enforceability of the master netting agreement or collateral agreement; or the Firm may not have sought legal advice to support the enforceability of the agreement. In cases where the Firm has not determined an agreement to be enforceable, the related amounts are not offset (see Note 4). The Firm’s policy is generally to receive securities and cash posted as collateral (with rights of rehypothecation), irrespective of the enforceability determination regarding the master netting and collateral agreement. In certain cases, the Firm may agree for such collateral to be posted to a third-party custodian under a control agreement that enables it to take control of such collateral in the event of a counterparty default. The enforceability of the mast er netting agreement is taken into account in the Firm’s risk management practices and application of counterparty credit limits. For information related to offsetting of derivatives and certain collateralized transactions, see Notes 4 and 6 , respectively. Hedge Accounting The Firm applies hedge accounting using various derivative financial instruments for the following types of hedges: hedges of changes in the fair value of assets and liabilities due to the risk being hedged (fair v alue hedges); and hedges of net investments in foreign operations whose functional currency is different from the reporting currency of the Parent Company (net investment hedges) . These financial instruments are included within Trading assets—Derivative an d other contracts or Trading liabilities—Derivative and other contracts in the balance sheets. For hedges where hedge accounting is being applied, the Firm performs effectiveness testing and other procedures. Fair Value Hedges—Interest Rate Risk The Fir m’s designated fair value hedges consist primarily of interest rate swaps designated as fair value hedges of changes in the benchmark interest rate of certain fixed rate senior b orrowings. The Firm uses regression analysis to perform an ongoing prospective and retrospective assessment of the effectiveness of these hedging relationships. A hedging relationship is deemed effective if the change in fair value of the hedging instrument (derivative) and the change in fair value of the hedged item (debt liability ) due to changes in the benchmark interest rate offset within a range of 80% to 125%. The Firm considers the impact of valuation adjustments related to its own credit spreads and counterparty credit spreads to determine whether they would cause the hedging relationship to be ineffective. For qualifying fair value hedges of benchmark interest rates, the changes in the fair value of the derivative and the changes in the fair value of the hedged liability provide an offset of one another and, together with a ny resulting ineffectiveness, are recorded in Interest expense. When a derivative is de-designated as a hedge, any basis adjustment remaining on the hedged liability is amortized to Interest expense over the remaining life of the liability using the effect ive interest method. Net Investment Hedges The Firm uses forward foreign exchange contracts to manage a portion of the currency exposure relating to its net investments in non-U.S. dollar functional currency operations. To the extent that the notional amounts of the hedging instruments equal the portion of the investments being hedged and the underlying exchange rate of the derivative hedging instrument relates to the exchange rate between the functional currency of the investee and the Parent Company's functional currency, no hedge ineffectiveness is recognized in earnings. If these exchange rates are not the same, the Firm uses regression analysis to assess the prospective and retrospective effectiveness of the hedge relationships, and any ineffectiven ess is recognized in Interest income. The gain or loss from revaluing hedges of net investments in foreign operations at the spot rate is reported within AOCI. The forward points on the hedging instruments are excluded from hedge effectiveness testing and are recorded in Interest income. For further information on derivative instruments and hedging activities, see Note 4 . Investment Securities —Available-for-Sale and Held-to-Maturity AFS securities are reported at fair value in the balance sheet s with unrealized gains and losses reported in AOCI, net of tax. Interest and dividend income, including amortization of premiums and accretion of discounts, is included in Interest income in the income statements. Realized gains and losses on AFS securiti es are reported in the income statements (see Note 5 ). The Firm utilizes the “first-in, first-out” method as the basis for determining the cost of AFS securities. HTM securities are reported at amortized cost in the balance sheets. Interest income, i ncluding amortization of premiums and accretion of discounts on HTM securities, is included in Interest income in the income statements. Other-than-Temporary Impairment AFS debt securities and HTM securities with a current fair value less than their amo rtized cost are analyzed as part of the Firm’s periodic assessment of temporary versus OTTI at the individual security level. A temporary impairment is recognized in AOCI. OTTI is recognized in the income statements with the exception of the non-credit por tion related to a debt security that the Firm does not intend to sell and is not likely to be required to sell, which is recognized in AOCI. For AFS debt securities that the Firm either has the intent to sell or that the Firm is likely to be required t o sell before recovery of its amortized cost basis, the impairment is considered OTTI. For those AFS debt securities that the Firm does not have the intent to sell or is not likely to be required to sell, and for all HTM securities, the Firm evaluates whether it expects to recover the entire amortized cost basis of the debt security. If the Firm does not expect to recover the entire amortized cost of those AFS debt securities or HTM securities, the impairment is considered OTTI, and the Firm determines what portion of the impairment relates to a credit loss and what portion relates to non-cre dit factors. A credit loss exists if the present value of cash flows expected to be collected (discounted at the implicit interest rate at acquisition of the security or discounted at the effective yield for securities that incorporate changes in prepaym ent assumptions) is less than the amortized cost basis of the security. Changes in prepayment assumptions alone are not considered to result in a credit loss. When determining if a credit loss exists, the Firm considers relevant information, including: the length of time and the extent to which the fair value has been less than the amortized cost basis; adverse conditions specifically related to the security, its industry or geographic area; changes in the financial condition of the issuer of the sec urity , the presence of explicit or implicit guarantees of repayment by the U.S. Government for U.S. Government and Agency securities or, in the case of an asset-backed debt security, changes in the financial condition of the underlying loan obligors; the historical and implied volatility of the fair value of the security; the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future; failure of the issuer of the security to make sch eduled interest or principal payments; the current rating and any changes to the rating of the security by a rating agency; recoveries or additional declines in fair value after the balance sheet date. When estimating the present value of expected cash flows, information includes the remaining payment terms of the security, prepayment speeds, financial condition of the issuer(s), expected defaults and the value of any underlying collateral. For AFS equity securities, the Firm considers various fa ctors, including the intent and ability to hold the equity security for a period of time sufficient to allow for any anticipated recovery in market value in evaluating whether an OTTI exists. If the equity security is considered other-than-temporarily impa ired, the entire OTTI ( i.e. , the difference between the fair value recorded in the balance sheet and the cost basis) will be recognized in the income statements. Loans The Firm accounts for loans based on the following categories: loans held for invest ment; loans held for sale; and loans at fair value. Loans Held for Investment Loans held for investment are reported at outstanding principal adjusted for any charge-offs, the allowance for loan losses, any unamortized deferred fees or costs for origi nated loans, and any unamortized premiums or discounts for purchased loans. Interest Income. Interest income on performing loans held for investment is accrued and recognized as interest income at the contractual rate of interest. Purchase price discounts or premiums, as well as net deferred loan fees or costs, are amortized into interest income over the life of the loan to produce a level rate of return. Allowance for Loan Losses. The allowance for loan losses estimates probable losses rela ted to loans specifically identified for impairment in addition to the probable losses inherent in the held for investment loan portfolio. The Firm utilizes the U.S. banking agencies’ definition of criticized exposures, which consist of the special ment ion , substandard, doubtful and loss categories as credit quality indicators. For further information on the credit quality indicators, see Note 7 . Substandard loans are regularly reviewed for impairment. Factors considered by management when determin ing impairment include payment status, fair value of collateral, and probability of collecting scheduled principal and interest payments when due. The impairment analysis required depends on the nature and type of loans. Loans classified as Doubtful or Los s are considered impaired. There are two components of the allowance for loan losses: the specific allowance component and the inherent allowance component. The specific allowance component of the allowance for loan losses is used to estimate probable losses for non-homogeneous exposures that have been specifically identified for impairment analysis by the Firm and determined to be impaired. When a loan is specifically identified for impairment, the impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or as a practical expedient, the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent. If the present value of the expected f uture cash flows (or alternatively, the observable market price of the loan or the fair value of the collateral) is less than the recorded investment in the loan, then the Firm recognizes an allowance and a charge to the provision for loan losses within Ot her revenues. The inherent allowance component of the allowance for loan losses is used to estimate the probable losses inherent in the loan portfolio and includes non-homogeneous loans that have not been identified as impaired and portfolios of smaller balance homogeneous loans. The Firm maintains methodologies by loan product for calculating an allowance for loan losses that estimates the inherent losses in the loan portfolio. Generally, inherent losses in the portfolio for non-impaired loans are estim ated using statistical analysis and judgment around the exposure at default, the probability of default and the loss given default. Qualitative and environmental factors such as economic and business conditions, nature and volume of the portfolio, and lend ing terms and volume and severity of past due loans may also be considered in the calculations. The allowance for loan losses is maintained at a level to ensure that it is reasonably likely to adequately absorb the estimated probable los ses inherent in the portfolio. When the Firm recognizes an allowance , there is also a charge to the provision for loan losses within Other revenues. Troubled Debt Restructurings . The Firm may modify the terms of certain loans for economic or legal reasons related to a bor rower’s financial difficulties by granting one or more concessions that the Firm would not otherwise consider. Such modifications are accounted for and reported as a TDR. A loan that has been modified in a TDR is generally considered to be impaired and is evaluated for the extent of impairment using the Firm’s specific allowance methodology. TDRs are also generally classified as nonaccrual and may only be returned to accrual status after considering the borrower’s sustained repayment performance for a reas onable period. Nonaccrual Loans. The Firm places loans on nonaccrual status if principal or interest is past due for a period of 90 days or more or payment of principal or interest is in doubt unless the obligation is well-secured and in the process o f collection. A loan is considered past due when a payment due according to the contractual terms of the loan agreement has not been remitted by the borrower. Substandard loans, if identified as impaired, are categorized as nonaccrual. Loans classified as Doubtful or Loss are categorized as nonaccrual. Payments received on nonaccrual loans held for investment are applied to principal if there is doubt regarding the ultimate collecti bility of principal ( i.e ., cost recovery method). If collection of the pr incipal of nonaccrual loans held for investment is not in doubt, interest income is re alized on a cash basis. If neither principal nor interest collection is in doubt, loans are on accrual status, and interest income is recognized using the effective inter est method. Loans that are on nonaccrual status may not be restored to accrual status until all delinquent principal and/or interest has been brought current after a reasonable period of performance, typically a minimum of six months. Charge-offs. Th e Firm charges off a loan in the period that it is deemed uncollectible and records a reduction in the allowance for loan losses and the balance of the loan. In general, any portion of the recorded investment in a collateral dependent loan (including any c apitalized accrued interest, net deferred loan fees or costs, and unamortized premium or discount) in excess of the fair value of the collateral that can be identified as uncollectible, and is therefore deemed a confirmed loss, is charged off against the a llowance for loan losses. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the sale or operation of the und |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures | |
Fair Value Disclosures | 3 . Fair Value s Fair Value Measurements Valuation Techniques for Assets and Liabilities Measured at Fair Value on a Recurring Basis Asset and Liability / Valuation Technique Valuation Hierarchy Classification Trading Assets and Trading Liabilities U.S. Treasury and Agency Securities U.S. Treasury Securities • Generally Level 1 • Fair value is determined using quoted market prices. U.S. Agency Securities • Level 1 - non-callable agency-issued debt securities • Non-callable agency-issued debt securities are generally valued using quoted market prices, and callable agency-issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for comparable instruments. • Generally Level 2 - callable agency-issued debt securities, agency mortgage pass-through pool securities and CMOs • The fair value of agency mortgage pass-through pool securities is model-driven based on spreads of comparable to-be-announced securities. • Level 3 - in instances where the inputs are unobservable • CMOs are generally valued using quoted market prices and trade data adjusted by subsequent changes in related indices for comparable instruments. Other Sovereign Government Obligations • Generally Level 1 • Fair value is determined using quoted prices in active markets when available. • Level 2 - if the market is less active or prices are dispersed • Level 3 - in instances where the prices are unobservable State and Municipal Securities • Generally Level 2 – if value based on observable market data for comparable instruments • Fair value is determined using recently executed transactions, market price quotations or pricing models that factor in, where applicable, interest rates, bond or CDS spreads and volatility and/or volatility skew, adjusted for any basis difference between cash and derivative instruments. RMBS, CMBS, ABS (collectively known as Mortgage- and Asset-backed securities) • Generally Level 2 - if value based on observable market data for comparable instruments • Mortgage- and asset-backed securities may be valued based on price or spread data obtained from observed transactions or independent external parties such as vendors or brokers. • Level 3 - if external prices or significant spread inputs are unobservable or if the comparability assessment involves significant subjectivity related to property type differences, cash flows, performance and other inputs • When position-specific external price data are not observable, the fair value determination may require benchmarking to comparable instruments, and/or analyzing expected credit losses, default and recovery rates, and/or applying discounted cash flow techniques. When evaluating the comparable instruments for use in the valuation of each security, security collateral-specific attributes, including payment priority, credit enhancement levels, type of collateral, delinquency rates and loss severity, are considered. In addition, for RMBS borrowers, FICO scores and the level of documentation for the loan are considered. • Market standard models, such as Intex, Trepp or others, may be deployed to model the specific collateral composition and cash flow structure of each transaction. Key inputs to these models are market spreads, forecasted credit losses, and default and prepayment rates for each asset category. • Valuation levels of RMBS and CMBS indices are used as an additional data point for benchmarking purposes or to price outright index positions. Corporate Bonds • Generally Level 2 - if value based on observable market data for comparable instruments • Fair value is determined using recently executed transactions, market price quotations, bond spreads, CDS spreads, or at the money volatility and/or volatility skew obtained from independent external parties, such as vendors and brokers, adjusted for any basis difference between cash and derivative instruments. • Level 3 – in instances where prices or significant spread inputs are unobservable • The spread data used are for the same maturity as the bond. If the spread data do not reference the issuer, then data that reference a comparable issuer are used. When position-specific external price data are not observable, fair value is determined based on either benchmarking to comparable instruments or cash flow models with yield curves, bond or single name CDS spreads and recovery rates as significant inputs. CDO • Level 2 - when either comparable market transactions are observable or credit correlation input is insignificant • The Firm holds cash CDOs that typically reference a tranche of an underlying synthetic portfolio of single name CDS spreads collateralized by corporate bonds (CLN) or cash portfolio of ABS/loans (“asset-backed CDOs”). • Level 3 - when either comparable market transactions are unobservable or the credit correlation input is significant • Credit correlation, a primary input used to determine the fair value of CLNs, is usually unobservable and derived using a benchmarking technique. Other model inputs such as credit spreads, including collateral spreads, and interest rates are typically observable. • Asset-backed CDOs are valued based on an evaluation of the market and model input parameters sourced from comparable instruments as indicated by market activity. Each asset-backed CDO position is evaluated independently taking into consideration available comparable market levels, underlying collateral performance and pricing, deal structures and liquidity. Loans and Lending Commitments • Level 2 - if value based on observable market data for comparable instruments • Fair value of corporate loans is determined using recently executed transactions, market price quotations (where observable), implied yields from comparable debt, market observable CDS spread levels obtained from independent external parties adjusted for any basis difference between cash and derivative instruments, along with proprietary valuation models and default recovery analysis where such transactions and quotations are unobservable. • Level 3 - in instances where prices or significant spread inputs are unobservable • Fair value of contingent corporate lending commitments is determined by using executed transactions on comparable loans and the anticipated market price based on pricing indications from syndicate banks and customers. The valuation of loans and lending commitments also takes into account fee income that is considered an attribute of the contract. • Fair value of mortgage loans is determined using observable prices based on transactional data or third-party pricing for comparable instruments, when available. • Where position-specific external prices are not observable, fair value is estimated based on benchmarking to prices and rates observed in the primary market for similar loan or borrower types or based on the present value of expected future cash flows using its best estimates of the key assumptions, including forecasted credit losses, prepayment rates, forward yield curves and discount rates commensurate with the risks involved or a methodology that utilizes the capital structure and credit spreads of recent comparable securitization transactions. • Fair value of equity margin loans is determined by discounting future interest cash flows, net of estimated credit losses. The estimated credit losses are derived by benchmarking to market observable CDS spreads, implied debt yields or volatility metrics of the loan collateral company. For further information on loans and lending commitments, see Note 7. Corporate Equities • Level 1 - exchange-traded securities and fund units if actively traded • Exchange-traded equity securities are generally valued based on quoted prices from the exchange. To the extent these securities are actively traded, valuation adjustments are not applied. • Level 2 - exchange-traded securities if not actively traded or if undergoing a recent mergers and acquisitions event or corporate action • Unlisted equity securities are generally valued based on an assessment of each underlying security, considering rounds of financing and third-party transactions, discounted cash flow analyses and market-based information, including comparable Firm transactions, trading multiples and changes in market outlook, among other factors. • Level 3 - unlisted equity securities and exchange-traded securities if not actively traded or if marked to an aged mergers and acquisitions event or corporate action • Listed fund units are generally marked to the exchange-traded price, while listed fund units if not actively traded and unlisted fund units are generally marked to NAV. Derivative and Other Contracts Listed Derivative Contracts • Level 1 - listed derivatives that are actively traded • Listed derivatives that are actively traded are valued based on quoted prices from the exchange. • Level 2 - listed derivatives that are not actively traded • Listed derivatives that are not actively traded are valued using the same approaches as those applied to OTC derivatives. OTC Derivative Contracts • Generally Level 2 - OTC derivative products valued using observable inputs, or where the unobservable input is not deemed significant • OTC derivative contracts include forward, swap and option contracts related to interest rates, foreign currencies, credit standing of reference entities, equity prices or commodity prices. • Level 3 – OTC derivative products for which the unobservable input is deemed significant • Depending on the product and the terms of the transaction, the fair value of OTC derivative products can be modeled using a series of techniques, including closed-form analytic formulas, such as the Black-Scholes option-pricing model, simulation models or a combination thereof. Many pricing models do not entail material subjectivity as the methodologies employed do not necessitate significant judgment, since model inputs may be observed from actively quoted markets, as is the case for generic interest rate swaps, many equity, commodity and foreign currency option contracts, and certain CDS. In the case of more established derivative products, the pricing models used by the Firm are widely accepted by the financial services industry. • More complex OTC derivative products are typically less liquid and require more judgment in the implementation of the valuation technique since direct trading activity or quotes are unobservable. This includes certain types of interest rate derivatives with both volatility and correlation exposure, equity, commodity or foreign currency derivatives that are either longer-dated or include exposure to multiple underlyings, and credit derivatives, including CDS on certain mortgage- or asset-backed securities and basket CDS. Where these inputs are unobservable, relationships to observable data points, based on historic and/or implied observations, may be employed as a technique to estimate the model input values. For further information on the valuation techniques for OTC derivative products, see Note 2. For further information on derivative instruments and hedging activities, see Note 4. Investments • Level 1 - exchange-traded direct equity investments in an active market • Investments include direct investments in equity securities, as well as various investment management funds, which include investments made in connection with certain employee deferred compensation plans. For direct investments, initially, the transaction price is generally considered by the Firm as the exit price and is its best estimate of fair value. • Level 2 - non-exchange-traded direct equity investments and investments in various investment management funds if valued based on rounds of financing or third-party transactions; exchange-traded direct equity investments if not actively traded • After initial recognition, in determining the fair value of non-exchange-traded internally and externally managed funds, the Firm generally considers the NAV of the fund provided by the fund manager to be the best estimate of fair value. For non-exchange-traded investments either held directly or held within internally managed funds, fair value after initial recognition is based on an assessment of each underlying investment, considering rounds of financing and third-party transactions, discounted cash flow analyses and market-based information, including comparable Firm transactions, trading multiples and changes in market outlook, among other factors. Exchange-traded direct equity investments are generally valued based on quoted prices from the exchange. • Level 3 - non-exchange-traded direct equity investments and investments in various investment management funds where rounds of financing or third-party transactions are not available Physical Commodities • Generally Level 2 if value based on observable inputs • The Firm trades various physical commodities, including natural gas and precious metals. • Fair value is determined using observable inputs, including broker quotations and published indices. Investment Securities—AFS Securities • AFS securities are composed of U.S. government and agency securities ( e.g. , U.S. Treasury securities, agency-issued debt, agency mortgage pass-through securities and CMOs), CMBS, FFELP student loan ABS, auto loan ABS, corporate bonds, CLO and actively traded equity securities. For further information on Valuation Hierarchy Classification, see corresponding Valuation Technique described herein. For further information on the determination of fair value, refer to the corresponding asset/liability valuation technique described herein. For further information on AFS securities, see Note 5. Deposits Certificates of Deposit • Generally Level 2 • The Firm issues FDIC-insured certificates of deposit that pay either fixed coupons or that have repayment terms linked to the performance of debt or equity securities, indices or currencies. The fair value of these certificates of deposit is determined using valuation models that incorporate observable inputs referencing identical or comparable securities, including prices to which the deposits are linked, interest rate yield curves, option volatility and currency rates, equity prices, and the impact of the Firm’s own credit spreads, adjusted for the impact of the FDIC insurance, which is based on vanilla deposit issuance rates. Securities Purchased under Agreements to Resell and Securities Sold under Agreements to Repurchase • Fair value is computed using a standard cash flow discounting methodology. • Generally Level 2 • The inputs to the valuation include contractual cash flows and collateral funding spreads, which are estimated using various benchmarks, interest rate yield curves and option volatilities. • Level 3 - in instances where the unobservable inputs are deemed significant Borrowings Structured Notes • Generally Level 2 • The Firm issues structured notes that have coupon or repayment terms linked to the performance of debt or equity securities, indices, currencies or commodities. • Level 3 - in instances where the unobservable inputs are deemed significant • Fair value of structured notes is determined using valuation models for the derivative and debt portions of the notes. These models incorporate observable inputs referencing identical or comparable securities, including prices to which the notes are linked, interest rate yield curves, option volatility and currency rates, and commodity or equity prices. • Independent, external and traded prices for the notes are considered as well. The impact of the Firm’s own credit spreads is also included based on observed secondary bond market spreads. Assets and Liabilities Measured at Fair Value on a Recurring Basis At December 31, 2017 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Assets at fair value Trading assets: U.S. Treasury and agency securities $ 22,077 $ 26,888 $ — $ — $ 48,965 Other sovereign government obligations 2 20,234 7,825 1 — 28,060 State and municipal securities — 3,592 8 — 3,600 MABS — 2,364 423 — 2,787 Corporate bonds — 15,105 456 — 15,561 CDO — 445 84 — 529 Loans and lending commitments 3 — 4,791 5,945 — 10,736 Other debt — 1,287 161 — 1,448 Corporate equities 4 149,697 492 166 — 150,355 Derivative and other contracts: Interest rate 472 178,704 1,763 — 180,939 Credit — 7,602 420 — 8,022 Foreign exchange 58 53,724 15 — 53,797 Equity 1,101 40,359 3,530 — 44,990 Commodity and other 1,126 5,390 4,147 — 10,663 Netting 1 (2,088) (216,764) (1,575) (47,171) (267,598) Total derivative and other contracts 669 69,015 8,300 (47,171) 30,813 Investments 5 297 523 1,020 — 1,840 Physical commodities — 1,024 — — 1,024 Total trading assets 5 192,974 133,351 16,564 (47,171) 295,718 Investment securities— AFS 27,522 27,681 — — 55,203 Intangible assets — 3 — — 3 Total assets at fair value $ 220,496 $ 161,035 $ 16,564 $ (47,171) $ 350,924 At December 31, 2017 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Liabilities at fair value Deposits $ — $ 157 $ 47 $ — $ 204 Trading liabilities: U.S. Treasury and agency securities 17,802 24 — — 17,826 Other sovereign government obligations 2 24,857 2,016 — — 26,873 Corporate and other debt — 7,141 3 — 7,144 Corporate equities 4 52,653 82 22 — 52,757 Derivative and other contracts: Interest rate 364 162,239 545 — 163,148 Credit — 8,166 379 — 8,545 Foreign exchange 23 55,118 127 — 55,268 Equity 1,001 44,666 2,322 — 47,989 Commodity and other 1,032 5,156 2,701 — 8,889 Netting 1 (2,088) (216,764) (1,575) (36,717) (257,144) Total derivative and other contracts 332 58,581 4,499 (36,717) 26,695 Total trading liabilities 95,644 67,844 4,524 (36,717) 131,295 Securities sold under agreements to repurchase — 650 150 — 800 Other secured financings — 3,624 239 — 3,863 Borrowings — 43,928 2,984 — 46,912 Total liabilities at fair value $ 95,644 $ 116,203 $ 7,944 $ (36,717) $ 183,074 At December 31, 2016 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Assets at fair value Trading assets: U.S. Treasury and agency securities $ 27,579 $ 20,392 $ 74 $ — $ 48,045 Other sovereign government obligations 14,005 5,497 6 — 19,508 State and municipal securities — 2,355 250 — 2,605 MABS — 1,691 217 — 1,908 Corporate bonds — 11,051 232 — 11,283 CDO — 602 63 — 665 Loans and lending commitments 3 — 3,580 5,122 — 8,702 Other debt — 1,360 180 — 1,540 Corporate equities 4 131,574 352 446 — 132,372 Derivative and other contracts: Interest rate 1,131 300,406 1,373 — 302,910 Credit — 11,727 502 — 12,229 Foreign exchange 231 74,921 13 — 75,165 Equity 1,185 35,736 1,708 — 38,629 Commodity and other 2,808 6,734 3,977 — 13,519 Netting 1 (4,378) (353,543) (1,944) (51,381) (411,246) Total derivative and other contracts 977 75,981 5,629 (51,381) 31,206 Investments 5 237 197 958 — 1,392 Physical commodities — 112 — — 112 Total trading assets 5 174,372 123,170 13,177 (51,381) 259,338 Investment securities— AFS 29,120 34,050 — — 63,170 Securities purchased under agreements to resell — 302 — — 302 Intangible assets — 3 — — 3 Total assets at fair value $ 203,492 $ 157,525 $ 13,177 $ (51,381) $ 322,813 At December 31, 2016 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Liabilities at fair value Deposits $ — $ 21 $ 42 $ — $ 63 Trading liabilities: U.S. Treasury and agency securities 11,636 61 — — 11,697 Other sovereign government obligations 20,658 2,430 — — 23,088 Corporate and other debt — 6,121 36 — 6,157 Corporate equities 4 57,847 54 35 — 57,936 Derivative and other contracts: Interest rate 1,244 285,379 953 — 287,576 Credit — 12,550 875 — 13,425 Foreign exchange 17 75,510 56 — 75,583 Equity 1,162 37,828 1,524 — 40,514 Commodity and other 2,663 6,845 2,377 — 11,885 Netting 1 (4,378) (353,543) (1,944) (39,803) (399,668) Total derivative and other contracts 708 64,569 3,841 (39,803) 29,315 Physical commodities — 1 — — 1 Total trading liabilities 90,849 73,236 3,912 (39,803) 128,194 Securities sold under agreements to repurchase — 580 149 — 729 Other secured financings — 4,607 434 — 5,041 Borrowings 47 37,081 2,014 — 39,142 Total liabilities at fair value $ 90,896 $ 115,525 $ 6,551 $ (39,803) $ 173,169 MABS—Mortgage- and a sset-backed securities 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 “Netting.” P ositions classified within the same level that are with the same counterparty are netted within that level. For further information on derivative instruments and hedging activities, see Note 4 . During 2017 , the Firm transferred from Level 2 to Leve l 1 $ 1. 2 billion and $ 1. 0 billion of Trading assets — Other sovereign government obligations and Trading liabilities — Other sovereign government obligations, respectively, due to increased market activity in these instruments. For further breakdown by type, s ee the following Loans and Lending Commitments at Fair Value table. For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes. Amounts exclude certain investments that are measured at fair value using the NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “Fair Value of Investments Measured at N et Asset Value ” herein . Loans and Lending Commitments at Fair Value $ in millions At December 31, 2017 At December 31, 2016 Corporate $ 8,358 $ 7,217 Residential real estate 799 966 Wholesale real estate 1,579 519 Total $ 10,736 $ 8,702 Unsettled Fair Value of Futures Contracts 1 $ in millions At December 31, 2017 At December 31, 2016 Customer and other receivables, net $ 831 $ 610 These contracts are primarily Level 1, actively traded , valued based on quoted prices from the exchange and are excluded from the previous recurring fair value tables . Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basi s The following tables present additional information about Level 3 assets and liabilities measured at fair value on a recurring basis . Level 3 instruments may be hedged with instruments cla ssified in Level 1 and Level 2. As a result, the realized and unrealized gains (losses) fo r assets and liabilities within the Level 3 category presented in the following tables do not reflect the relat ed 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, 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 . Total realized and unrealized gains (losses) are primarily included in Trading reven ues in the income statements . Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2017 $ in millions Beginning Balance at December 31, 2016 Realized and Unrealized Gains (Losses) Purchases 1 Sales and Issuances 2 Settlements 1 Net Transfers Ending Balance at December 31, 2017 Unrealized Gains (Losses) Assets at fair value Trading assets: U.S. Treasury and agency securities $ 74 $ (1) $ — $ (240) $ — $ 167 $ — $ — Other sovereign government obligations 6 — — (5) — — 1 — State and municipal securities 250 3 6 (83) — (168) 8 — MABS 217 47 289 (158) (37) 65 423 (7) Corporate bonds 232 22 381 (218) — 39 456 (4) CDO 63 22 40 (31) (9) (1) 84 15 Loans and lending commitments 5,122 182 3,616 (1,561) (1,463) 49 5,945 131 Other debt 180 38 66 (171) — 48 161 12 Corporate equities 446 (54) 173 (632) — 233 166 (6) Net derivative and other contracts 3 : Interest rate 420 322 29 (18) 608 (143) 1,218 341 Credit (373) (43) — (1) 455 3 41 (18) Foreign exchange (43) (108) — (1) 31 9 (112) (89) Equity 184 136 988 (524) 396 28 1,208 159 Commodity and other 1,600 515 24 (57) (343) (293) 1,446 20 Total net derivative and other contracts 1,788 822 1,041 (601) 1,147 (396) 3,801 413 Investments 958 96 102 (57) (78) (1) 1,020 88 Liabilities at fair value Deposits $ 42 $ (3) $ — $ 12 $ (3) $ (7) $ 47 $ (3) Trading liabilities: Corporate and other debt 36 — (63) 11 — 19 3 — Corporate equities 35 1 (76) 9 — 55 22 — Securities sold under agreements to repurchase 149 — — 1 — — 150 — Other secured financings 434 (35) — 64 (251) (43) 239 (28) Borrowings 2,014 (196) — 1,968 (424) (770) 2,984 (173) Loan originations and consolid ations of VIEs are included in P urchases and deconsolid ations of VIEs are included in S ettlements. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and B orrowings primarily represent issuances. Amounts for other line items primarily represent sales. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts . Amounts are presen ted before counterparty netting. Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2016 $ in millions Beginning Balance at December 31, 2015 Realized and Unrealized Gains (Losses) Purchases 1 Sales and Issuances 2 Settlements 1 Net Transfers Ending Balance at December 31, 2016 Unrealized Gains (Losses) Assets at fair value Trading assets: U.S. Treasury and agency securities $ — $ (4) $ 72 $ — $ — $ 6 $ 74 $ (4) Other sovereign government obligations 4 1 4 (7) — 4 6 — State and municipal securities 19 — 249 (18) — — 250 — MABS 438 (69) 82 (323) — 89 217 (77) Corporate bonds 267 9 310 (357) — 3 232 (20) CDO 430 11 14 (300) — (92) 63 (5) Loans and lending commitments 5,936 (79) 2,261 (954) (1,863) (179) 5,122 (80) Other debt 448 20 26 (51) — (263) 180 (13) Corporate equities 434 (2) 242 (154) — (74) 446 — Net derivative and other contracts 3 : Interest rate 260 529 1 — (83) (287) 420 463 Credit (844) (176) — (4) 623 28 (373) (167) Foreign exchange 141 (27) — — (220) 63 (43) (23) Equity (2,031) 539 809 (337) 1,073 131 184 376 Commodity and other 1,050 544 24 (114) (44) 140 1,600 304 Total net derivative and other contracts (1,424) 1,409 834 (455) 1,349 75 1,788 953 Investments 707 (32) 398 (75) (59) 19 958 (50) Intangible assets 5 — — — — (5) — — Liabilities at fair value Deposits $ 19 $ — $ — $ 23 $ — $ — $ 42 $ — Trading liabilities: Corporate and other debt 4 (4) (99) 145 — (18) 36 — Corporate equities 18 17 (10) 89 — (45) 35 — Securities sold under agreements to repurchase 151 2 — — — — 149 2 Other secured financings 461 (5) — 79 (45) (66) 434 (5) Borrowings 1,988 (19) — 648 (305) (336) 2,014 (30) Loan originations and consolidations of VIEs are included in P urchases and deconsolidations of VIEs are included in S ettlements. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and B orrowings primarily represent issuances. Amounts for other line items primarily represent sales. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts . Amounts are presen ted before counterparty netting. Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2015 $ in millions Beginning Balance at December 31, 2014 Realized and Unrealized Gains (Losses) Purchases 1 Sales and Issuances 2 Settlements 1 Net Transfers Ending Balance at December 31, 2015 Unrealized Gains (Losses) Assets at fair value Trading assets: Other sovereign government obligations $ 41 $ (1) $ 2 $ (30) $ — $ (8) $ 4 $ — State and municipal securities — 2 3 — — 14 19 2 MABS 347 (13) 226 (136) — 14 438 (20) Corporate bonds 386 (44) 374 (381) (53) (15) 267 (44) CDOs 1,152 123 325 (798) (344) (28) 430 (19) Loans and lending commitments 5,874 (42) 3,216 (207) (2,478) (427) 5,936 (76) Other debt 285 (23) 131 (5) (81) 141 448 (9) Corporate equities 272 (1) 374 (333) — 122 434 11 Net derivative and other contracts 3 : Interest rate (173) (51) 58 (54) 207 273 260 20 Credit (743) (172) 19 (121) 196 (23) (844) (179) Foreign exchange 151 53 4 (2) (18) (47) 141 52 Equity (2,165) 166 81 (311) 22 176 (2,031) 62 Commodity and other 1,146 433 35 (222) (116) (226) 1,050 402 Total net derivative and other contracts (1,784) 429 197 (710) 291 153 (1,424) 357 Investments 1,158 (1) 33 (139) (188) (156) 707 (1) Intangible assets 6 — — — (1) — 5 — Liabilities at fair value Deposits $ — $ (1) $ — $ 18 $ — $ — $ 19 $ (1) Trading liabilities: Corporate and other debt 121 5 (20) 13 (104) (1) 4 5 Corporate equities 45 79 (86) 33 — 105 18 79 Securities sold under agreements to repurchase 153 2 — — — — 151 2 Other secured financings 149 192 — 327 (232) 409 461 181 Borrowings 1,934 61 — 882 (364) (403) 1,988 52 Loan originations and consolid ations of VIEs are included in P urchases and deconsolid ations of VIEs are included in S ettlements. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and B orrowings primarily represent issuances. Amounts for other line items primarily represent sales. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts . Amounts are presen ted before counterparty netting. Significant Unobservable Inputs Used in Recurring and Nonrecurring 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 and nonrecurring 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. There are no predictable relationships between multiple signifi cant unobservable inputs attributable to a given valuation technique. A single amount is disclosed when there is no significant difference between the minimum, maximum and average (weighted average or simple average/median ). Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements Predominant Valuation Techniques/ Significant Unobservable Inputs Range (Weighted Average or Simple Average/Median) 1 $ in millions, except inputs At December 31, 2017 At December 31, 2016 Recurring Fair Value Measurement Assets at fair value U.S. Treasury and agency securities ($— and $74) Comparable pricing: Comparable bond price N/A 96 to 105 points (102 points) State and municipal securities ($8 and $250) Comparable pricing: Comparable bond price N/M 53 to 100 points (91 points) MABS ($423 and $217) Comparable pricing: Comparable bond price 0 to 95 points (26 points) 0 to 86 points (27 points) Predominant Valuation Techniques/ Significant Unobservable Inputs Range (Weighted Average or Simple Average/Median) 1 $ in millions, except inputs At December 31, 2017 At December 31, 2016 Corporate bonds ($456 and $232) Comparable pricing: Comparable bond price 3 to 134 points (59 points) 3 to 130 points (70 points) Discounted cash flow: Recovery rate 6% to 36% (27%) N/A CDO ($84 and $63) Comparable pricing: Comparable bond price 16 to 101 points (67 points) 0 to 103 points (50 points) Loans and lending commitments ($5,945 and $5,122) Expected recovery: Asset coverage N/M 43% to 100% (83%) Margin loan model: Discount rate 0% to 3% (1%) 2% to 8% (3%) Volatility skew 7% to 41% (22%) 21% to 63% (33%) Comparable pricing: Comparable loan price 55 to 102 points (95 points) 45 to 100 points (84 points) Discounted cash flow: WACC N/M 5% Capitalization rate N/M 4% to 10% (4%) Other debt ($161 and $180) Option model: At the money volatility 17% to 52% (52%) 16% to 52% (52%) Discounted cash flow: Discount rate 7% to 20% (14%) 7% to 12% (11%) Comparable pricing: Comparable loan price N/M 1 to 74 points (23 points) Corporate equities ($166 and $446) Comparable pricing: Comparable equity price 100% 100% Net derivative and other contracts 2 : Interest rate ($1,218 and $420) Option model: Interest rate - Foreign exchange correlation N/M 28% to 58% (44% / 43%) Interest rate volatility skew 31% to 97% (41% / 47%) 19% to 117% (55% / 56%) Interest rate quanto correlation N/M -17% to 31% (1% / -5%) Interest rate curve correlation N/M 28% to 96% (68% / 72%) Inflation volatility 23% to 63% (44% / 41%) 23% to 55% (40% / 39%) |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 4 . Derivative Instruments and Hedging Activities The Firm trades and makes markets globally in listed futures, OTC swaps, forwards, options and other derivatives referencing, among other things, interest rates, equities, currencies, investment grade and non-investment grade corporate credits, loans, bonds, U.S. and other sovereign securities, emerging market bonds and loans, credit indices, ABS indices, property indices, mortgage-related and other ABS, and real estate loan products. The Firm uses these instruments for market-making, foreign currency exposure mana gement, and asset and liability management. The Firm manages its market-making positions by employing a variety of risk mitigation strategies. These strategies include diversification of risk exposures and hedging. Hedging activities consist of the purcha se or sale of positions in related securities and financial instruments, including a variety of derivative products ( e.g. , futures, forwards, swaps and options). The Firm manages the market risk associated with its market-making activities on a Firm-wide b asis, on a worldwide trading division level and on an individual product basis. Derivative Fair Values At December 31, 2017 Assets $ in millions Bilateral OTC Cleared OTC 1 Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 1,057 $ — $ — $ 1,057 Foreign exchange contracts 57 6 — 63 Total 1,114 6 — 1,120 Not designated as accounting hedges Interest rate contracts 177,948 1,700 234 179,882 Credit contracts 5,740 2,282 — 8,022 Foreign exchange contracts 52,878 798 58 53,734 Equity contracts 24,452 — 20,538 44,990 Commodity and other contracts 8,861 — 1,802 10,663 Total 269,879 4,780 22,632 297,291 Total gross derivatives $ 270,993 $ 4,786 $ 22,632 $ 298,411 Amounts offset Counterparty netting (201,051) (3,856) (19,861) (224,768) Cash collateral netting (42,141) (689) — (42,830) Total in Trading assets $ 27,801 $ 241 $ 2,771 $ 30,813 Amounts not offset 2 Financial instruments collateral (12,363) — — (12,363) Other cash collateral (4) — — (4) Net amounts 3 $ 15,434 $ 241 $ 2,771 $ 18,446 Derivative assets not subject to legally enforceable master netting or collateral agreements 3 $ 3,154 Liabilities $ in millions Bilateral OTC Cleared OTC 1 Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 67 $ 1 $ — $ 68 Foreign exchange contracts 72 57 — 129 Total 139 58 — 197 Not designated as accounting hedges Interest rate contracts 161,758 1,178 144 163,080 Credit contracts 6,273 2,272 — 8,545 Foreign exchange contracts 54,191 925 23 55,139 Equity contracts 27,993 — 19,996 47,989 Commodity and other contracts 7,117 — 1,772 8,889 Total 257,332 4,375 21,935 283,642 Total gross derivatives $ 257,471 $ 4,433 $ 21,935 $ 283,839 Amounts offset Counterparty netting (201,051) (3,856) (19,861) (224,768) Cash collateral netting (31,892) (484) — (32,376) Total in Trading liabilities $ 24,528 $ 93 $ 2,074 $ 26,695 Amounts not offset 2 Financial instruments collateral (5,523) — (412) (5,935) Other cash collateral (18) (14) — (32) Net amounts 3 $ 18,987 $ 79 $ 1,662 $ 20,728 Derivative liabilities not subject to legally enforceable master netting or collateral agreements 3 $ 3,751 At December 31, 2016 Assets $ in millions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 1,924 $ 1,049 $ — $ 2,973 Foreign exchange contracts 249 18 — 267 Total 2,173 1,067 — 3,240 Not designated as accounting hedges Interest rate contracts 200,336 99,217 384 299,937 Credit contracts 9,837 2,392 — 12,229 Foreign exchange contracts 73,645 1,022 231 74,898 Equity contracts 20,710 — 17,919 38,629 Commodity and other contracts 9,792 — 3,727 13,519 Total 314,320 102,631 22,261 439,212 Total gross derivatives $ 316,493 $ 103,698 $ 22,261 $ 442,452 Amounts offset Counterparty netting (243,488) (100,477) (19,607) (363,572) Cash collateral netting (45,875) (1,799) — (47,674) Total in Trading assets $ 27,130 $ 1,422 $ 2,654 $ 31,206 Amounts not offset 2 Financial instruments collateral (10,293) — — (10,293) Other cash collateral (124) — — (124) Net amounts 3 $ 16,713 $ 1,422 $ 2,654 $ 20,789 Derivative assets not subject to legally enforceable master netting or collateral agreements 3 $ 3,656 Liabilities $ in millions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 77 $ 647 $ — $ 724 Foreign exchange contracts 15 25 — 40 Total 92 672 — 764 Not designated as accounting hedges Interest rate contracts 183,063 103,392 397 286,852 Credit contracts 11,024 2,401 — 13,425 Foreign exchange contracts 74,575 952 16 75,543 Equity contracts 22,531 — 17,983 40,514 Commodity and other contracts 8,303 — 3,582 11,885 Total 299,496 106,745 21,978 428,219 Total gross derivatives $ 299,588 $ 107,417 $ 21,978 $ 428,983 Amounts offset Counterparty netting (243,488) (100,477) (19,607) (363,572) Cash collateral netting (30,405) (5,691) — (36,096) Total in Trading liabilities $ 25,695 $ 1,249 $ 2,371 $ 29,315 Amounts not offset 2 Financial instruments collateral (7,638) — (585) (8,223) Other cash collateral (10) (1) — (11) Net amounts 3 $ 18,047 $ 1,248 $ 1,786 $ 21,081 Derivative liabilities not subject to legally enforceable master netting or collateral agreements 3 $ 3,497 Effective in the first quarter of 2017, the Chicago Mercantile Exchange amended its rulebook for cleared OTC derivatives, resulting in the characterization of variation margin transfers as settlement payments as opposed to cash posted as collateral. In the quarter of adoption, the cleared OTC gross derivative assets and liabilities, and related counterparty and cash collateral netting amounts in total decreased by approximately $ 13 billion and $ 20 billion, respectively. Effective in the third quarter of 2017, derivatives cleared through LCH Clearnet Limited became subject to the rulebook under which variation margin transfers are settlement payments. As a result, cleared OTC gross derivative assets and liabilities, and related counterparty and cash collat eral netting amounts in total decreased by approximately $ 62 billion and $ 59 billion, respectively. Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of defau lt but where certain other criteria are not met in accordance with applicable offsetting accounting guidance . 3 . Net amounts include transactions that are either not subject to master netting agreements or collateral agreements , or are subject to such agre ements but the Firm has not determined the agreements to be legally enforceable. See Note 3 for information related to the unsettled fair value of futures contracts not designated as accounting hedges, which are excluded from the table above. Derivative Notionals At December 31, 2017 Assets $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 20 $ 46 $ — $ 66 Foreign exchange contracts 4 — — 4 Total 24 46 — 70 Not designated as accounting hedges Interest rate contracts 3,999 6,458 2,714 13,171 Credit contracts 194 100 — 294 Foreign exchange contracts 1,960 67 9 2,036 Equity contracts 397 — 334 731 Commodity and other contracts 86 — 72 158 Total 6,636 6,625 3,129 16,390 Total gross derivatives $ 6,660 $ 6,671 $ 3,129 $ 16,460 Liabilities $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 2 $ 102 $ — $ 104 Foreign exchange contracts 4 2 — 6 Total 6 104 — 110 Not designated as accounting hedges Interest rate contracts 4,199 6,325 1,089 11,613 Credit contracts 226 80 — 306 Foreign exchange contracts 2,014 78 51 2,143 Equity contracts 394 — 405 799 Commodity and other contracts 68 — 61 129 Total 6,901 6,483 1,606 14,990 Total gross derivatives $ 6,907 $ 6,587 $ 1,606 $ 15,100 At December 31, 2016 Assets $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 30 $ 38 $ — $ 68 Foreign exchange contracts 6 — — 6 Total 36 38 — 74 Not designated as accounting hedges Interest rate contracts 3,586 6,224 2,586 12,396 Credit contracts 333 112 — 445 Foreign exchange contracts 1,580 52 13 1,645 Equity contracts 338 — 242 580 Commodity and other contracts 67 — 79 146 Total 5,904 6,388 2,920 15,212 Total gross derivatives $ 5,940 $ 6,426 $ 2,920 $ 15,286 Liabilities $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 2 $ 52 $ — $ 54 Foreign exchange contracts 1 1 — 2 Total 3 53 — 56 Not designated as accounting hedges Interest rate contracts 3,462 6,087 897 10,446 Credit contracts 359 96 — 455 Foreign exchange contracts 1,557 48 14 1,619 Equity contracts 321 — 273 594 Commodity and other contracts 78 — 59 137 Total 5,777 6,231 1,243 13,251 Total gross derivatives $ 5,780 $ 6,284 $ 1,243 $ 13,307 The Firm believes that the notional amounts of the derivative contracts generally overstate its exposure. For information related to offsetting of certain collateralized transactions, see Note 6 . Gains (Losses) on Accounting Hedges $ in millions 2017 2016 2015 Fair Value Hedges - Recognized in Interest Expense Derivatives $ (1,591) $ (1,738) $ (700) Borrowings 1,393 1,541 461 Total $ (198) $ (197) $ (239) Net Investment Hedges - Foreign exchange contracts Effective portion—OCI $ (365) $ (1) $ 434 Forward points excluded from hedge effectiveness testing—Interest income $ (20) $ (74) $ (149) Trading Revenues by Product Type $ in millions 2017 2016 2015 Interest rate contracts $ 2,091 $ 1,522 $ 1,249 Foreign exchange contracts 647 1,156 984 Equity security and index contracts 1 6,291 5,690 5,695 Commodity and other contracts 740 56 793 Credit contracts 1,347 1,785 775 Subtotal $ 11,116 $ 10,209 $ 9,496 DVA 2 — — 618 Total $ 11,116 $ 10,209 $ 10,114 Dividend income is included within equity security and index contracts . In 2017 and 2016, 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) are recorded within OCI in the comprehensive income statements. In 2015, the DVA gains (losses) were recorded within Trading revenues in the income statements. See note 15 for further information . The previous table summarizes gains and losses included in Trading revenues in the income statements. These activities include revenues related to derivative and non-derivative financial instruments. The Firm generally utilizes financial instruments ac ross a variety of product types in connection with its market-making and related risk management strategies. The trading revenues presented in the 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. Credit R isk-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. 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. Net Derivative Liabilities and Collateral Posted At At December 31, December 31, $ in millions 2017 2016 Net derivative liabilities with credit risk-related contingent features $ 20,675 $ 22,939 Collateral posted 16,642 17,040 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 S&P Global Ratings . 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 contract ual downgrade triggers. Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade At December 31, $ in millions 2017 One-notch downgrade $ 635 Two-notch downgrade 382 Bilateral downgrade agreements included in the amounts above 1 $ 823 1. Amount represents 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 downg rade 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 CDS , 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 for these derivatives are banks, broker-dealers, and insurance and other financial institutions. Protection Sold and Purchased with CDSs At December 31, 2017 Protection Sold Protection Purchased $ in millions Notional Fair Value (Asset)/ Liability Notional Fair Value (Asset)/ Liability Single name $ 146,948 $ (1,277) $ 164,773 $ 1,658 Index and basket 131,073 (341) 120,348 209 Tranched index and basket 11,864 (342) 24,498 616 Total $ 289,885 $ (1,960) $ 309,619 $ 2,483 Single name and non-tranched index and basket with identical underlying reference obligations $ 274,473 $ — $ 281,162 $ — At December 31, 2016 Protection Sold Protection Purchased $ in millions Notional Fair Value (Asset)/ Liability Notional Fair Value (Asset)/ Liability Single name $ 266,918 $ (753) $ 269,623 $ 826 Index and basket 130,383 374 122,061 (481) Tranched index and basket 32,429 (670) 78,505 1,900 Total $ 429,730 $ (1,049) $ 470,189 $ 2,245 Single name and non-tranched index and basket with identical underlying reference obligations $ 395,536 $ — $ 389,221 $ — The purchase of credit protection does not represent the sole manner in which the Firm risk manages its exposure to credit derivatives. The Firm manages its exposure to these derivative contracts through a variety of risk mitigation strategies, which include managing the credit and correlation risk across single name, non-tranched indices and baskets, tranched indices and baskets, and cash positions. Aggregate market risk limits have been established for credit derivatives, and market risk measures are routinely monitored against these limits. The Firm may also recover amounts on the underlying reference obligation delivered to the Firm under CDSs where credit protection was sold. Fair value amounts as shown in the table below are on a gross basis prior to cash collateral or counterparty netting. In order to provide an indication of the current payment status or performance risk of the CDSs, a breakdown of CDSs 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 (“ C RM”) assessment of credit risk and the basis for a comprehensive credit limits framework used to control credit risk. T he Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor . Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold At December 31, 2017 Maximum Potential Payout/Notional Fair Value Years to Maturity (Asset)/ $ in millions Less than 1 1-3 3-5 Over 5 Total Liability Single name CDSs Investment grade $ 39,721 $ 42,591 $ 18,157 $ 8,872 $ 109,341 $ (1,167) Non-investment grade 14,213 16,293 6,193 908 37,607 (110) Total single name CDSs 53,934 58,884 24,350 9,780 146,948 (1,277) Index and basket CDSs Investment grade 29,046 15,418 37,343 6,807 88,614 (1,091) Non-investment grade 5,246 7,371 32,417 9,289 54,323 408 Total index and basket CDSs 34,292 22,789 69,760 16,096 142,937 (683) Total CDSs sold $ 88,226 $ 81,673 $ 94,110 $ 25,876 $ 289,885 $ (1,960) Other credit contracts 2 — — 134 136 16 Total credit derivatives and other credit contracts $ 88,228 $ 81,673 $ 94,110 $ 26,010 $ 290,021 $ (1,944) At December 31, 2016 Maximum Potential Payout/Notional Fair Value Years to Maturity (Asset)/ $ in millions Less than 1 1-3 3-5 Over 5 Total Liability Single name CDSs Investment grade $ 79,449 $ 70,796 $ 34,529 $ 10,293 $ 195,067 $ (1,060) Non-investment grade 34,571 25,820 10,436 1,024 71,851 307 Total single name CDSs $ 114,020 $ 96,616 $ 44,965 $ 11,317 $ 266,918 $ (753) Index and basket CDSs Investment grade $ 26,530 $ 21,388 $ 35,060 $ 9,096 $ 92,074 $ (846) Non-investment grade 26,135 22,983 11,759 9,861 70,738 550 Total index and basket CDSs $ 52,665 $ 44,371 $ 46,819 $ 18,957 $ 162,812 $ (296) Total CDSs sold $ 166,685 $ 140,987 $ 91,784 $ 30,274 $ 429,730 $ (1,049) Other credit contracts 49 6 — 215 270 — Total credit derivatives and other credit contracts $ 166,734 $ 140,993 $ 91,784 $ 30,489 $ 430,000 $ (1,049) Credit Contracts Single Name C DS . A CDS protects the buyer against the loss of principal on a bond or loan in case of a default by the issuer. The protection buyer pays a periodic premium (generally quarterly) over the life of the contract and is protected for the period. The Firm, in turn, performs under a CDS if a credit event as defined under the contract occurs. Typical credit events include bankruptcy, dissolution or insolvency of the referenced entity, failure to pay and restr ucturing of the obligations of the referenced entity. Index and Basket CDS . Index and basket CDSs are products where credit protection is provided on a portfolio of single name CDSs . Generally, in the event of a default on one of the underlying names, the Firm pays a pro rata portion of the total notional amount of the CDS . The Firm also enters into tranched index and basket CDSs where credit protection is provided on a particular portion of the portfolio loss distribution. The most junior tranches cover initial defaults, and once losses exceed the notional of the tranche, they are passed on to the next most senior tranche in the capital structure. Credit Protection Sold through CLN and CDO . The Firm has invested in CLNs and CDOs, which are hybr id instruments containing embedded derivatives, in which credit protection has been sold to the issuer of the note. If there is a credit event of a reference entity underlying the instrument, the principal balance of the note may not be repaid in full to t he Firm. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2017 | |
Investment securities | |
Investment Securities | 5 . Investment Securities AFS and HTM Securities At December 31, 2017 $ in millions Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 26,842 $ — $ 589 $ 26,253 U.S. agency securities 1 22,803 28 247 22,584 Total U.S. government and agency securities 49,645 28 836 48,837 Corporate and other debt: CMBS: Agency 1,370 2 49 1,323 Non-agency 1,102 — 8 1,094 Corporate bonds 1,379 5 12 1,372 CLO 398 1 — 399 FFELP student loan ABS 2 2,165 15 7 2,173 Total corporate and other debt 6,414 23 76 6,361 Total AFS debt securities 56,059 51 912 55,198 AFS equity securities 15 — 10 5 Total AFS securities 56,074 51 922 55,203 HTM securities U.S. government and agency securities: U.S. Treasury securities 11,424 — 305 11,119 U.S. agency securities 1 11,886 7 220 11,673 Total U.S. government and agency securities 23,310 7 525 22,792 Corporate and other debt: CMBS: Non-agency 289 1 1 289 Total corporate and other debt 289 1 1 289 Total HTM securities 23,599 8 526 23,081 Total investment securities $ 79,673 $ 59 $ 1,448 $ 78,284 At December 31, 2016 $ in millions Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 28,371 $ 1 $ 545 $ 27,827 U.S. agency securities 1 22,348 14 278 22,084 Total U.S. government and agency securities 50,719 15 823 49,911 Corporate and other debt: CMBS: Agency 1,850 2 44 1,808 Non-agency 2,250 11 16 2,245 Auto loan ABS 1,509 1 1 1,509 Corporate bonds 3,836 7 22 3,821 CLO 540 — 1 539 FFELP student loan ABS 2 3,387 5 61 3,331 Total corporate and other debt 13,372 26 145 13,253 Total AFS debt securities 64,091 41 968 63,164 AFS equity securities 15 — 9 6 Total AFS securities 64,106 41 977 63,170 HTM securities U.S. government and agency securities: U.S. Treasury securities 5,839 1 283 5,557 U.S. agency securities 1 11,083 1 188 10,896 Total HTM securities 16,922 2 471 16,453 Total investment securities $ 81,028 $ 43 $ 1,448 $ 79,623 U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and CMO s . 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 December 31, 2017 Less than 12 Months 12 Months or Longer Total $ in millions Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 21,941 $ 495 $ 4,287 $ 94 $ 26,228 $ 589 U.S. agency securities 12,673 192 2,513 55 15,186 247 Total U.S. government and agency securities 34,614 687 6,800 149 41,414 836 Corporate and other debt: CMBS: Agency 930 49 — — 930 49 Non-agency 257 1 559 7 816 8 Corporate bonds 316 3 389 9 705 12 FFELP student loan ABS 984 7 — — 984 7 Total corporate and other debt 2,487 60 948 16 3,435 76 Total AFS debt securities 37,101 747 7,748 165 44,849 912 AFS equity securities — — 5 10 5 10 Total AFS securities 37,101 747 7,753 175 44,854 922 HTM securities U.S. government and agency securities: U.S. Treasury securities 6,608 86 4,512 219 11,120 305 U.S. agency securities 2,879 24 7,298 196 10,177 220 Total U.S. government and agency securities 9,487 110 11,810 415 21,297 525 Corporate and other debt: CMBS: Non-agency 124 1 — — 124 1 Total corporate and other debt 124 1 — — 124 1 Total HTM securities 9,611 111 11,810 415 21,421 526 Total investment securities $ 46,712 $ 858 $ 19,563 $ 590 $ 66,275 $ 1,448 At December 31, 2016 Less than 12 Months 12 Months or Longer Total $ in millions Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 25,323 $ 545 $ — $ — $ 25,323 $ 545 U.S. agency securities 16,760 278 125 — 16,885 278 Total U.S. government and agency securities 42,083 823 125 — 42,208 823 Corporate and other debt: CMBS: Agency 1,245 44 — — 1,245 44 Non-agency 763 11 594 5 1,357 16 Auto loan ABS 659 1 123 — 782 1 Corporate bonds 2,050 21 142 1 2,192 22 CLO 178 — 239 1 417 1 FFELP student loan ABS 2,612 61 — — 2,612 61 Total corporate and other debt 7,507 138 1,098 7 8,605 145 Total AFS debt securities 49,590 961 1,223 7 50,813 968 AFS equity securities 6 9 — — 6 9 Total AFS securities 49,596 970 1,223 7 50,819 977 HTM securities U.S. government and agency securities: U.S. Treasury securities 5,057 283 — — 5,057 283 U.S. agency securities 10,612 188 — — 10,612 188 Total HTM securities 15,669 471 — — 15,669 471 Total investment securities $ 65,265 $ 1,441 $ 1,223 $ 7 $ 66,488 $ 1,448 The Firm believes there are no securities in an unrealized loss position that are other-than-temporarily-impaired after performing the analysis described in Note 2. 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. Furthermore, 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 d ue to higher interest rates since those securities were purchased. See Note 13 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 . Investment Securities by Contractual Maturity At December 31, 2017 $ in millions Amortized Cost Fair Value Average Yield AFS debt securities U.S. government and agency securities: U.S. Treasury securities: Due within 1 year $ 6,501 $ 6,478 0.9% After 1 year through 5 years 15,195 14,901 1.5% After 5 years through 10 years 5,146 4,874 1.5% Total 26,842 26,253 U.S. agency securities: Due within 1 year 46 45 1.1% After 1 year through 5 years 2,485 2,475 0.9% After 5 years through 10 years 1,280 1,263 1.9% After 10 years 18,992 18,801 1.9% Total 22,803 22,584 Total U.S. government and agency securities 49,645 48,837 1.5% Corporate and other debt: CMBS: Agency: Due within 1 year 3 3 0.9% After 1 year through 5 years 380 379 1.4% After 5 years through 10 years 153 154 1.1% After 10 years 834 787 1.6% Total 1,370 1,323 Non-agency: After 5 years through 10 years 35 36 2.5% After 10 years 1,067 1,058 1.7% Total 1,102 1,094 Corporate bonds: Due within 1 year 46 46 1.2% After 1 year through 5 years 1,248 1,243 2.3% After 5 years through 10 years 85 83 2.4% Total 1,379 1,372 CLO: After 5 years through 10 years 200 200 1.5% After 10 years 198 199 2.4% Total 398 399 FFELP student loan ABS: After 1 year through 5 years 50 49 0.8% After 5 years through 10 years 404 401 0.8% After 10 years 1,711 1,723 1.1% Total 2,165 2,173 Total corporate and other debt 6,414 6,361 1.6% Total AFS debt securities 56,059 55,198 1.5% AFS equity securities 15 5 ― % Total AFS securities 56,074 55,203 1.5% HTM securities U.S. government securities: U.S. Treasury securities: Due within 1 year 499 496 1.2% After 1 year through 5 years 5,085 5,034 1.6% After 5 years through 10 years 5,113 4,923 1.9% After 10 years 727 666 2.3% Total 11,424 11,119 U.S. agency securities: After 10 years 11,886 11,673 2.5% Total 11,886 11,673 Total U.S. government and agency securities 23,310 22,792 2.3% Corporate and other debt: CMBS: Non-agency: After 1 year through 5 years 95 95 3.6% After 5 years through 10 years 175 175 3.8% After 10 years 19 19 4.1% Total 289 289 Total corporate and other debt 289 289 0.1% Total HTM securities 23,599 23,081 2.1% Total investment securities $ 79,673 $ 78,284 1.7% Gross Realized Gains and Losses on Sales of AFS Securities $ in millions 2017 2016 2015 Gross realized gains $ 46 $ 133 $ 116 Gross realized (losses) (11) (21) (32) Total $ 35 $ 112 $ 84 Gross realized gains and losses are recognized in Other revenues in the income statements. |
Collateralized Transactions
Collateralized Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Collateralized Transactions | |
Collateralized Transactions | 6 . Collateralized Transactions The Firm enters into securities purchased under agreements to resell, securities sold under agreements to repurchase, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate cust omers’ needs and to finance its inventory positions. The Firm manages credit exposure arising from such transactions by, in appropriate circumstances, entering into master netting agreements and collateral agreements with counterparties that provide the Firm, in the event of a counterparty default (such as bankruptcy or a counterparty’s failure to pay or perform), with the right to net a counterparty’s rights and obligations under such agreement and liquida te and set off collateral held by the Firm against the net amount owed by the counterparty. The Firm’s policy is generally to take possession of securities purchased or borrowed in connection with securities purchased under agreements to resell and secu rities borrowed transactions, respectively, and to receive cash and securities delivered under securities sold under agreements to repurchase or securities loaned transactions (with rights of rehypothecation). In certain cases, the Firm may be permitted to post collateral to a third-party custodian under a tri-party arrangement that enables the Firm to take control of such collateral in the event of a counterparty default. The Firm also monitors the fair value of the underlying securities as compared with the related receivable or payable, including accrued interest, and, as necessary, requests additional collateral, as provided under the applicable agreement to ensure such transactions are adequately collateralized, or the return of excess collateral. T he risk related to a decline in the market value of collateral (pledged or received) is managed by setting appropriate market-based haircuts. Increases in collateral margin calls on secured financing due to market value declines may be mitigated by increas es in collateral margin calls on securities purchased under agreements to resell and securities borrowed transactions with similar quality collateral. Additionally, the Firm may request lower quality collateral pledged be replaced with higher quality colla teral through collateral substitution rights in the underlying agreements. The Firm actively manages its secured financings in a manner that reduces the potential refinancing risk of secured financings of less liquid assets. The Firm considers the qualit y of collateral when negotiating collateral eligibility with counterparties, as defined by its fundability criteria. The Firm utilizes shorter-term secured financing for highly liquid assets and has established longer tenor limits for less liquid assets, f or which funding may be at risk in the event of a market disruption. Offsetting of Certain Collateralized Transactions At December 31, 2017 $ in millions Gross Amounts Amounts Offset Net Amounts Presented Amounts Not Offset 1 Net Amounts Assets Securities purchased under agreements to resell $ 199,044 $ (114,786) $ 84,258 $ (78,009) $ 6,249 Securities borrowed 133,431 (9,421) 124,010 (119,358) 4,652 Liabilities Securities sold under agreements to repurchase $ 171,210 $ (114,786) $ 56,424 $ (48,067) $ 8,357 Securities loaned 23,014 (9,422) 13,592 (13,271) 321 Not subject to legally enforceable master netting agreements 2 Securities purchased under agreements to resell $ 5,687 Securities borrowed 572 Securities sold under agreements to repurchase 6,945 Securities loaned 307 At December 31, 2016 $ in millions Gross Amounts Amounts Offset Net Amounts Presented Amounts Not Offset 1 Net Amounts Assets Securities purchased under agreements to resell $ 182,888 $ (80,933) $ 101,955 $ (93,365) $ 8,590 Securities borrowed 129,934 (4,698) 125,236 (118,974) 6,262 Liabilities Securities sold under agreements to repurchase $ 135,561 $ (80,933) $ 54,628 $ (47,933) $ 6,695 Securities loaned 20,542 (4,698) 15,844 (15,670) 174 Not subject to legally enforceable master netting agreements 2 Securities purchased under agreements to resell $ 7,765 Securities borrowed 2,591 Securities sold under agreements to repurchase 6,500 Securities loaned 154 1. 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. 2. Represents amounts within Net Amounts related to transactions that 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 . For information related to o ffsetting of derivatives, see Note 4 . Maturities and Collateral Pledged Gross Secured Financing Balances by Remaining Contractual Maturity At December 31, 2017 $ in millions Overnight and Open Less than 30 Days 30-90 Days Over 90 Days Total Securities sold under agreements to repurchase $ 41,332 $ 66,593 $ 28,682 $ 34,603 $ 171,210 Securities loaned 12,130 873 1,577 8,434 23,014 Total included in the offsetting disclosure $ 53,462 $ 67,466 $ 30,259 $ 43,037 $ 194,224 Trading liabilities ― Obligation to return securities received as collateral 22,555 — — — 22,555 Total $ 76,017 $ 67,466 $ 30,259 $ 43,037 $ 216,779 At December 31, 2016 $ in millions Overnight and Open Less than 30 Days 30-90 Days Over 90 Days Total Securities sold under agreements to repurchase $ 41,549 $ 36,703 $ 24,648 $ 32,661 $ 135,561 Securities loaned 9,487 851 2,863 7,341 20,542 Total included in the offsetting disclosure $ 51,036 $ 37,554 $ 27,511 $ 40,002 $ 156,103 Trading liabilities ― Obligation to return securities received as collateral 20,262 — — — 20,262 Total $ 71,298 $ 37,554 $ 27,511 $ 40,002 $ 176,365 Gross Secured Financing Balances by Class of Collateral Pledged $ in millions At December 31, 2017 At December 31, 2016 Securities sold under agreements to repurchase U.S. government and agency securities $ 43,346 $ 56,372 State and municipal securities 2,451 1,363 Other sovereign government obligations 87,141 42,790 ABS 1,130 1,918 Corporate and other debt 7,737 9,086 Corporate equities 28,497 23,152 Other 908 880 Total $ 171,210 $ 135,561 Securities loaned U.S. government and agency securities $ 81 $ — Other sovereign government obligations 9,489 4,762 Corporate and other debt 14 73 Corporate equities 13,174 15,693 Other 256 14 Total $ 23,014 $ 20,542 Total included in the offsetting disclosure $ 194,224 $ 156,103 Trading liabilities ― Obligation to return securities received as collateral Corporate equities $ 22,555 $ 20,262 Total $ 216,779 $ 176,365 Assets Pledged The Firm pledges its trading assets and loans to collateralize securities sold under agreements to repurchase, securities loaned, other secured financings and derivatives. Counterparties may or may not have the right to sell or repledge the collateral. Pledged financial instruments that can be sold or repledged by the secured party are identified as Trading assets (pledged to various parties) in the balance sheets. Carrying Value of Assets Loaned or Pledged without Counterparty Right to Sell or Repledge $ in millions At December 31, 2017 At December 31, 2016 Trading assets $ 31,324 $ 41,358 Loans (gross of allowance for loan losses) 228 — Total $ 31,552 $ 41,358 Collateral Received The Firm receives collateral in the form of securities in connection with securities purchased under agreements to resell, securities borrowed, securities-for- securities transactions, 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 securities sold under agreements to repurchase , to en ter into securities lending and derivative transactions or for delivery to counterparties to cover short positions. Fair Value of Collateral Received with Right to Sell or Repledge $ in millions At December 31, 2017 At December 31, 2016 Collateral received with right to sell or repledge $ 599,244 $ 561,239 Collateral that was sold or repledged 475,113 430,911 Concentration Risk The Firm is subject to concentration risk by holding large positions in certain types of securities, loans or commitments to purchase securities of a single issuer, including sovereign governments and other entities, issuers located in a particular country or geographic area, public and private issuers involving developing countries or issuers engaged in a particular industry. Concentration Based on the Firm's Total Assets At December 31, 2017 At December 31, 2016 Trading assets: U.S. government and agency securities and other sovereign government obligations 1 9% 8% Collateral held for: Resale agreements and bonds borrowed 2 14% 18% Other sovereign government obligations p rincipally comprise the U.K., Japan and Brazil. C onsists of securities issued by the U.S. government, federal agencies or other so vereign government obligations. Positions taken and commitments made by the Firm, including positions taken and underwriting and financing commitments made in connection with its private equity, principal investment and lending activities, often involve substantial amounts and significant exposure to individual issuers and businesses, including non-investment grade issuers. In addition, the Firm may originate and/or purchase certain residential and commercial mortgage loans that could contain certain terms and features that may result in additional credit risk as compared with more traditional types of mortgages. Such terms and features may include loans made to borrowers subject to payment increases or loans with high loan-to-value ratios. Customer Margin Lending and Other Margin lending allows clients to borrow against the value of qualifying securities. Margin loans are included within Customer and other receivables in the balance sheet s. 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. Margin loans are extended on a demand basis and are no t committed facilities. Factors considered in the review of margin loans are the amount of the loan, the intended purpose, the degree of leverage being employed in the account, and an overall evaluation of the portfolio to ensure proper diversification or, in the case of concentrated positions, appropriate liquidity of the underlying collateral or potential hedging strategies to reduce risk. Underlying collateral for margin loans is reviewed with respect to the liquidity of the proposed collateral position s, valuation of securities, historic trading range, volatility analysis and an evaluation of industry concentrations. For these transactions, adherence to the Firm’s collateral policies significantly limits its credit exposure in the event of a customer de fault. The Firm may request additional margin collateral from customers, if appropriate, and, if necessary, may sell securities that have not been paid for or purchase securities sold but not delivered from customers. $ in millions At December 31, 2017 At December 31, 2016 Net customer receivables representing margin loans $ 32,112 $ 24,359 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, and certain ELN and other secured borrowings. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets (see Notes 11 and 13 ). Restricted Cash and Segregated Securities $ in millions At December 31, 2017 At December 31, 2016 Restricted cash $ 34,231 $ 33,979 Segregated securities 1 20,549 23,756 Total $ 54,780 $ 57,735 Securities segregated under federal regulations for the Firm’s U.S. broker-dealers are sourced from Securities purchased under agreements to resell and Trading assets in the balance sheets. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Loans and Allowance for Credit Losses | 7 . Loans and Allowance for Credit Losses Loans The Firm’s loan portfolio consists of the following types of loans : • Corporate . Corporate loans primarily include commercial and industrial lending used for general corporate purposes, working capital and liquidity, event-driven loans and asset-backed lending products. Event-driven loans support client merger, acquisition, recapitalization, or project finance activities. Corporate loans are structured as revolving lines of credit, letter of credit facilities, term loans and bridge loans. R isk factors considered in determining the allowance for corporate loans include the borrower’s financial strength, seniority of the loan, collateral type, volatility of collateral value, debt cushion, covenants and counterparty type. • Consumer . Cons umer loans include unsecured loans and securities-based lending , which allows clients to borrow money against the value of qualifying securities for any suitable purpose other than purchasing, trading, or carrying securities or refinancing margin debt. The majority of consumer loans are structured as revolving lines of credit and letter of credit facilities and are primarily offered through the Firm’s Portfolio Loan Account and L iquidity Access Line programs. The allowance methodology for unsecured loans con siders the specific attributes of the loan , as well as the borrower’s source of repayment. The allowance methodology for securities-based lending considers the collateral type underlying the loan ( e.g. , diversified securities, concentrated securities or res tricted stock). • Residential Real Estate . Residential real estate loans mainly include non-conforming loans and HELOC . The allowance methodology for non-conforming residential mortgage loans considers several factors, including, but not limited to, loan-to-value ratio, FICO score, home price index and delinquency status. The methodology for HELOC considers credit limits and utilization rates in addition to the factors considered for non-conforming residential mortgages. • Wholesale Real Estate . Wholesale real estate loans include owner-occupied loans and income-producing loans. The principal risk factors for determining the allowance for wholesale real estate loans are the underlying collateral type, loan-to-value ratio and debt service ratio. Loans by Type At December 31, 2017 $ in millions Loans Held for Investment Loans Held for Sale Total Loans Corporate loans $ 29,754 $ 9,456 $ 39,210 Consumer loans 26,808 — 26,808 Residential real estate loans 26,635 35 26,670 Wholesale real estate loans 9,980 1,682 11,662 Total loans, gross 93,177 11,173 104,350 Allowance for loan losses (224) — (224) Total loans, net $ 92,953 $ 11,173 $ 104,126 At December 31, 2016 $ in millions Loans Held for Investment Loans Held for Sale Total Loans Corporate loans $ 25,025 $ 10,710 $ 35,735 Consumer loans 24,866 — 24,866 Residential real estate loans 24,385 61 24,446 Wholesale real estate loans 7,702 1,773 9,475 Total loans, gross 81,978 12,544 94,522 Allowance for loan losses (274) — (274) Total loans, net $ 81,704 $ 12,544 $ 94,248 Loans by Interest Rate Type At At December 31, December 31, $ in millions 2017 2016 Fixed $ 13,339 $ 11,895 Floating or adjustable 90,787 82,353 Total loans, net $ 104,126 $ 94,248 Loans to Non-U.S. Borrowers At At December 31, December 31, $ in millions 2017 2016 Loans, net of allowance $ 9,977 $ 9,388 See Note 3 for further information regarding Loans and lending commitments held at fair value. Credit Quality C RM evaluates new obligors before credit transactions are initially approved and at least annually thereafter for corporate and wholesale real estate loans. For corporate loans, credit evaluations typically involve the evaluation of financial statements , assessment of leverage, liquidity, capital strength, asset composition and quality , market capitalization and access to capital markets , cash fl ow projections and debt service requirements , and the adequacy of collateral, if applicable. CRM also evaluates strategy, market position, industry dynamics, obligor’s management and other factors that could affect an obligor’s risk profile. For wholesale real estate loans, the credit evaluation is focused on property and transaction metrics, including property type, loan-to-value ratio, occupancy levels, debt service ratio, prevailing capitalization rates and market dynamics. For residential real estate a nd consumer loans, the initial credit evaluation typically includes, but is not limited to, review of the obligor’s income, net worth, liquidity, collateral, loan-to-value ratio and credit bureau information. Subsequent credit monitoring for residential re al estate loans is performed at the portfolio level. Consumer loan collateral values are monitored on an ongoing basis. The Firm utilizes the following credit quality indicators, which are consistent with U.S. banking agencies’ definitions of criticized exposures, in its credit monitoring process for loans held for investment: • Pass . A credit exposure rated pass has a continued expectation of timely repayment, all obligations of the borrower are current, and the obligor complies with material term s and conditions of the lending agreement. • Special Mention . Extensions of credit that have potential weakness that deserve management’s close attention and, if left uncorrected, may, at some future date, result in the deterioration of the repayment prospects or collateral position. • Substandard . Obligor has a well-defined weakness that jeopardizes the repayment of the debt and has a high probability of payment default with the distinct possibility that the Firm will sustain some loss if noted deficiencies are not corrected. • Doubtful . Inherent weakness in the exposure makes the collection or repayment in full, based on existing facts, conditions and circumstances, highly improbable, and the amount of loss is uncertain. • Loss . Extensions of credit classified as loss are considered uncollectible and are charged off. Loans considered as D oubtful or L oss are considered impaired. Substandard loans are regularly reviewed for impairment. When a loan is impaired, the impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the observable market price of the loan or the fair value of the collateral if the loan is collateral depend ent. For further information, see Note 2 . Loans Held for Investment before Allowance by Credit Quality At December 31, 2017 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total Pass $ 29,166 $ 26,802 $ 26,562 $ 9,480 $ 92,010 Special mention 188 6 — 200 394 Substandard 393 — 73 300 766 Doubtful 7 — — — 7 Loss — — — — — Total $ 29,754 $ 26,808 $ 26,635 $ 9,980 $ 93,177 At December 31, 2016 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total Pass $ 23,409 $ 24,853 $ 24,345 $ 7,294 $ 79,901 Special mention 288 13 — 218 519 Substandard 1,259 — 40 190 1,489 Doubtful 69 — — — 69 Loss — — — — — Total $ 25,025 $ 24,866 $ 24,385 $ 7,702 $ 81,978 The following loans and lending commitments have been evaluated for a specific allowance. All remaining loans and lending commitments are assessed under the inherent allowance methodolog y . Impaired Loans and Lending Commitments before Allowance At December 31, 2017 $ in millions Corporate Residential Real Estate Total Loans With allowance $ 16 $ — $ 16 Without allowance 1 118 45 163 UPB 2 146 46 192 Lending Commitments With allowance $ — $ — $ — Without allowance 1 199 — 199 At December 31, 2016 $ in millions Corporate Residential Real Estate Total Loans With allowance $ 104 $ — $ 104 Without allowance 1 206 35 241 UPB 2 316 38 354 Lending Commitments With allowance $ — $ — $ — Without allowance 1 89 — 89 At December 31, 2017 and December 31, 2016 , no allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows (or, alternatively, the observable market price of the instrument or the fair value of the collateral held) equaled or exceeded the carrying value. The impaired loans UPB 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. Impaired Loans and Allowance by Region At December 31, 2017 $ in millions Americas EMEA Asia Total Impaired loans $ 160 $ 9 $ 10 $ 179 Allowance for loan losses 194 27 3 224 At December 31, 2016 $ in millions Americas EMEA Asia Total Impaired loans $ 320 $ 9 $ 16 $ 345 Allowance for loan losses 245 28 1 274 Troubled Debt Restructurings At At December 31, December 31, $ in millions 2017 2016 Loans $ 51 $ 67 Lending commitments 28 14 Allowance for loan losses and lending commitments 10 — Impaired loans and lending commitments classified as held for investment within corporate loans include TDRs as shown in the previous table. These restructurings typically include modifications of interest rates, collateral requirements, other loan covenants and payment extensions. Allowance for Loan Losses Rollforward $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2016 $ 195 $ 4 $ 20 $ 55 $ 274 Gross charge-offs (75) — — — (75) Recoveries 1 — — — 1 Net recoveries (charge-offs) (74) — — — (74) Provision (release) 5 — 4 13 22 Other — — — 2 2 December 31, 2017 $ 126 $ 4 $ 24 $ 70 $ 224 Inherent $ 119 $ 4 $ 24 $ 70 $ 217 Specific 7 — — — 7 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2015 $ 166 $ 5 $ 17 $ 37 $ 225 Gross charge-offs (16) — (1) — (17) Gross recoveries 3 — — — 3 Net recoveries (charge-offs) (13) — (1) — (14) Provision (release) 110 (1) 4 18 131 Other 1 (68) — — — (68) December 31, 2016 $ 195 $ 4 $ 20 $ 55 $ 274 Inherent $ 133 $ 4 $ 20 $ 55 $ 212 Specific 62 — — — 62 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2014 $ 118 $ 2 $ 8 $ 21 $ 149 Gross charge-offs — — (1) — (1) Gross recoveries 1 — — — 1 Net recoveries (charge-offs) 1 — (1) — — Provision (release) 58 3 10 16 87 Other (11) — — — (11) December 31, 2015 $ 166 $ 5 $ 17 $ 37 $ 225 Inherent $ 156 $ 5 $ 17 $ 37 $ 215 Specific 10 — — — 10 The r eduction is related to loans of $ 492 million that were transferred to loans held for sale during 2016. Allowance for Lending Commitments Rollforward $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2016 $ 185 $ 1 $ — $ 4 $ 190 Provision (release) 8 — — (1) 7 Other 1 — — — 1 December 31, 2017 $ 194 $ 1 $ — $ 3 $ 198 Inherent $ 192 $ 1 $ — $ 3 $ 196 Specific 2 — — — 2 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2015 $ 180 $ 1 $ — $ 4 $ 185 Provision (release) 13 — — — 13 Other (8) — — — (8) December 31, 2016 $ 185 $ 1 $ — $ 4 $ 190 Inherent $ 185 $ 1 $ — $ 4 $ 190 Specific — — — — — $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2014 $ 147 $ — $ — $ 2 $ 149 Provision (release) 33 1 — 2 36 December 31, 2015 $ 180 $ 1 $ — $ 4 $ 185 Inherent $ 173 $ 1 $ — $ 4 $ 178 Specific 7 — — — 7 Employee Loans At At December 31, December 31, $ in millions 2017 2016 Balance $ 4,185 $ 4,804 Allowance for loan losses (77) (89) Balance, net $ 4,108 $ 4,715 Repayment term range, in years 1 to 20 1 to 12 Employee loans are granted in conjunction with a program established to retain and recruit certain employees, are full recourse and generally require periodic repayments . These loans are recorded in Customer and other receivables in the balance sheets. The Firm establishes an allowance for loan amounts it does not consider recoverable, and the related provision is recorded in C ompensation and benefits expense. |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures | |
Equity Method Investments | 8 . Equity Method Investments Overview The Firm’s investments accounted for under the equity method of accounting (see Note 1 ) are included in Other assets in the balance sheets. Income (loss) from equity method investments is included in Other revenues in the income statements. Equity Method Investment Balances $ in millions At December 31, 2017 At December 31, 2016 Investments $ 2,623 $ 2,837 $ in millions 2017 1 2016 2015 Income (loss) $ (34) $ (79) $ 114 Includes a $ 53 million impai rment of Investment Management business segment’s int erest in a third-party asset manager. Ja panese Securities Joint Venture Included in the equity method investments is t he Firm’s 40 % voting interest in Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“ MUMSS”). MUFG holds a 60 % voting interest. The Firm accounts for its equity method investment in MUMSS within the Institutional Securities business segment. $ in millions 2017 2016 2015 Income from investment in MUMSS $ 123 $ 93 $ 220 In 2011, MUFG contributed capital to MUMSS and in return received Class C stock from MUMSS (“Class C stock”) to restore its capital base which was eroded by trading and other losses. Morgan Stanley did not have an obligation to make matching capital contributions to MUMSS at that time. Accordingly, the Firm recorded increases in its investment, with corresponding increases in additional paid-in capital, reflecting the Firm’s 40% share of the increase in the net asset value of MUMSS. In the fourth quar ter of 2017, MUMSS partially redeemed the Class C stock issued to MUFG, and the Firm recorded a decrease in both its investment in MUMSS and additional paid-in capital of $ 71 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 9 . Goodwill and Intangible Assets Goodwill The Firm completed its annual goodwill impairment testing as of July 1, 2017 and July 1, 2016 . The Firm’s impairment testing for each period did not indicate any goodwill impairment as each of the Firm’s reporting units with goodwill had a fair value that was substantially in excess of its carrying value. Goodwill Rollforward $ in millions IS WM IM Total At December 31, 2015 1 $ 282 $ 5,533 $ 769 $ 6,584 Foreign currency and other (7) ─ ─ (7) At December 31, 2016 1 $ 275 $ 5,533 $ 769 $ 6,577 Foreign currency and other 20 ─ ─ 20 At December 31, 2017 1 $ 295 $ 5,533 $ 769 $ 6,597 Accumulated impairments 2 673 ─ 27 700 IS—Institutional Securities WM—Wealth Management IM—Investment Management Balances represent the amount of the Firm’s goodwill after accumulated impairments . Balances represent amounts at December 31, 2017, 2016 and 2015. Intangible Assets by Business Segment $ in millions IS WM IM Total Amortizable intangibles $ 346 $ 2,361 $ 11 $ 2,718 Mortgage servicing rights — 3 — 3 At December 31, 2016 $ 346 $ 2,364 $ 11 $ 2,721 Amortizable intangibles $ 349 $ 2,092 $ 4 $ 2,445 Mortgage servicing rights — 3 — 3 At December 31, 2017 $ 349 $ 2,095 $ 4 $ 2,448 Gross Amortizable Intangible Assets by Type At December 31, 2017 At December 31, 2016 $ in millions Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Trademarks $ 1 $ — $ 1 $ — Tradename 283 50 283 40 Customer relationships 4,059 2,193 4,059 1,939 Management contracts 503 299 467 275 Other 329 188 329 167 Total $ 5,175 $ 2,730 $ 5,139 $ 2,421 Estimated annual amortization expense for the next five years $ 301 Net Amortizable Intangible Assets Rollforward $ in millions IS WM IM Total At December 31, 2015 $ 327 $ 2,632 $ 20 $ 2,979 Acquired 43 — — 43 Disposals (11) — — (11) Amortization expense (11) (271) (9) (291) Impairment losses (2) — — (2) At December 31, 2016 $ 346 $ 2,361 $ 11 $ 2,718 Acquired 51 — — 51 Disposals (15) — — (15) Amortization expense (33) (269) (7) (309) At December 31, 2017 $ 349 $ 2,092 $ 4 $ 2,445 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2017 | |
Deposits [Abstract] | |
Deposits | 10 . De posi ts Deposits At At December 31, December 31, $ in millions 2017 2016 Savings and demand deposits $ 144,487 $ 154,559 Time deposits 14,949 1,304 Total $ 159,436 $ 155,863 Deposits subject to FDIC insurance $ 127,017 $ 127,992 Time deposits that equal or exceed the FDIC insurance limit $ 38 $ 46 Time Deposit Maturities $ in millions At December 31, 2017 2018 $ 12,232 2019 2,481 2020 32 2021 6 2022 69 Thereafter 129 |
Borrowings and Other Secured Fi
Borrowings and Other Secured Financings | 12 Months Ended |
Dec. 31, 2017 | |
Borrowings and Other Secured Financings | |
Long-Term Borrowings and Other Secured Financings | 11 . Borrowings and Other Secured Financings Maturities and Terms of Borrowings Parent Company Subsidiaries At At Fixed Variable Fixed Variable December December $ in millions Rate Rate 1 Rate Rate 1 31, 2017 31, 2016 Original maturities of one year or less: Next 12 months $ — $ — $ — $ 1,519 $ 1,519 $ 941 Original maturities greater than one year: 2017 $ — $ — $ — $ — $ — $ 26,127 2018 13,154 5,625 14 5,077 23,870 19,292 2019 12,947 8,902 55 2,645 24,549 22,397 2020 11,175 7,668 14 2,557 21,414 16,736 2021 13,733 4,146 18 1,166 19,063 17,179 2022 6,536 8,717 17 2,316 17,586 5,338 Thereafter 56,866 17,765 201 9,749 84,581 57,706 Total $ 114,411 $ 52,823 $ 319 $ 23,510 $ 191,063 $ 164,775 Total borrowings $ 114,411 $ 52,823 $ 319 $ 25,029 $ 192,582 $ 165,716 Weighted average coupon at period-end 2 3.8% 1.8% 6.3% N/M 3.3% 3.7% 1. Variable rate borrowings bear interest based on a variety of money market indices, including LIBOR and federal funds rates. Amounts include notes carried at fair value with various payment provisions, including notes linked to equity, credit, commodity or other indices. 2 . Includes only borrowings with original maturities greater than one year. Weighted average coupon i s calculated utilizing U.S. and non-U.S. dollar interest rates and excludes financial instruments for which the fair value option was elected. Virtually all of the variable rate notes issued by subsidiaries are carried at fair value so a weighted average coupon is not meaningful. Increases ( Decreases ) in Carrying Amount of Borrowings Associated with Fair Value Hedge s At December 31, $ in millions 2017 2018 $ 73 2019 150 2020 154 2021 9 2022 (96) Thereafter (595) Total $ (305) Borrowings with Original Maturities Greater than One Year by Type $ in millions At December 31, 2017 At December 31, 2016 Senior $ 180,835 $ 154,472 Subordinated 10,228 10,303 Total $ 191,063 $ 164,775 Weighted average stated maturity, in years 6.6 5.9 Certain senior debt securities are denominated in various non-U.S. dollar currencies and may be structured to provide a return that is linked to equity, credit, commodity or other indices ( e.g. , the consumer price index). Senior debt also may be structured to be callable by the Firm or extendible at the option of holders of the senior debt securities. Debt containing an option that effectively allows the holders to put the notes back to the Fi rm totaled $ 3,023 million at December 31, 2017 and $ 3,156 million at December 31, 2016. In addition, in certain circumstances, certain purchasers may be entitled to cause the repurchase of the notes through liquidity arrangements with the Firm. The aggrega ted value of notes subject to these arrangements was $ 1,414 million at December 31, 2017 and $ 1,117 million at December 31, 2016. Subordinated debt generally is issued to meet the capital requirements of the Firm or its regulated subsidiaries and primarily is U.S. dollar denominated. Senior Debt—Structured Borrowings The Firm’s index-linked, equity-linked or credit-linked borrowings include various structured instruments whose payments and redemption values are linked to the performance of a specific index ( e.g., S &P 500), a basket of stocks, a specific equity security, a credit exposure or basket of credit exposures. To minimize the exposure from such instruments, the Firm has entered into various swap contracts and purchased options that effectively convert the borrowing costs into floating rates based upon LIBOR. The Firm generally carries the entire structured borrowing at fair value. The swaps and purchased options used to economically hedge the embedded features are derivatives and also are carri ed at fair value. Changes in fair value related to the notes and economic hedges are reported in Trading revenues. See Note s 2 and 3 for further information on structured borrowings. Subordinated Debt 2017 2016 Contractual weighted average coupon 4.5% 4.5% Maturities of subordinated notes range from 2022 to 2027. Asset and Liability Management In general, other than securities inventories financed by secured funding sources, the majority of the Firm’s assets are financed with a combination of deposits, short-term funding, floating rate long-term debt or fixed rate long-term debt swapped to a floating rate. The Firm uses interest rate swaps to more closely match these borrowings to the duration, holding period and interest rate characteristics o f the assets being funded and to manage interest rate risk. These swaps effectively convert certain of the Firm’s fixed rate borrowings into floating rate obligations. In addition, for non-U.S. dollar currency borrowings that are not used to fund assets in the same currency, the Firm has entered into currency swaps that effectively convert the borrowings into U.S. dollar obligations. The Firm’s use of swaps for asset and liability management affected its effective average borrowing rate. Rates for Borrow ings w ith Original Maturities Greater t han One Year At December 31, 2017 2016 2015 Contractual weighted average coupon 1 3.3% 3.7% 4.0% Effective average after swaps 2.5% 2.5% 2.1% 1. Weighted average coupon was calculated utilizing U.S. and non-U.S. dollar interest rates and excludes financial instruments for which the fair value option was elected . Other Secured Financings Other secured financings include the liabilities related to certain ELNs, transfers of financial assets that are accounted for as financings rather than sales, pledged commodities, consolidated VIEs where the Firm is deemed to be the primary beneficiary and other secured borrowings. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets. See Note 13 for further information on other secured financings related to VIEs and securitization activities. Other Secured Financings by Original Maturity and Type At At December 31, December 31, $ in millions 2017 2016 Secured financings Original maturities: Greater than one year $ 8,685 $ 9,404 One year or less 2,034 1,429 Failed sales 1 552 285 Total $ 11,271 $ 11,118 1. For more information on failed sales, see Note 13 . Maturities and Terms of Secured Financings At December 31, 2017 At Fixed Variable December 31, $ in millions Rate Rate 1 Total 2016 Original maturities of one year or less: Next 12 months $ 590 $ 1,444 $ 2,034 $ 1,429 Original maturities greater than one year: 2017 $ — $ — $ — $ 3,377 2018 165 4,827 4,992 2,738 2019 36 2,601 2,637 2,813 2020 354 151 505 270 2021 2 — 2 — 2022 2 149 151 — Thereafter 227 171 398 206 Total $ 786 $ 7,899 $ 8,685 $ 9,404 Weighted average coupon at period-end 2 3.1% 1.5% 1.7% 1.0% 1. Variable rate borrowings bear interest based on a variety of money market indices, including LIBOR and federal funds rates . Amounts include notes carried at fair value with various payment provisions, including notes linked to equity, credit, commodity or other indices . 2. Includes only other secured financings with original maturities greater than one year. Weighted average coupon is calculated utilizing U.S. and non-U.S. dollar interest rates and excludes secured financings that are linked to non-interest indices and for w hich the fair value option was elected. Failed Sales by Maturity At At December 31, December 31, $ in millions 2017 2016 2017 $ — $ 112 2018 22 17 2019 4 53 2020 109 55 2021 69 28 2022 59 4 Thereafter 289 16 Total $ 552 $ 285 |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments, Guarantees and Contingencies [Abstract] | |
Commitments, Guarantees and Contingencies | 12 . 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. Years to Maturity at December 31, 2017 Less $ in millions than 1 1-3 3-5 Over 5 Total Lending: Corporate $ 16,495 $ 30,234 $ 43,975 $ 4,061 $ 94,765 Consumer 6,319 — 8 3 6,330 Residential real estate 1 52 52 253 358 Wholesale real estate 108 508 — — 616 Forward-starting secured financing receivables 67,883 — — 579 68,462 Underwriting 336 — — — 336 Investment activities 506 126 44 245 921 Letters of credit and other financial guarantees 63 131 1 70 265 Total $ 91,711 $ 31,051 $ 44,080 $ 5,211 $ 172,053 Corporate lending commitments participated to third parties $ 6,414 Forward-starting secured financing receivables settled within three business days $ 54,236 Types of Commitments Lending Commitments . Lending commitments represent the notional amount of legally binding obligations to provide funding to clients for different types of loan transactions. For syndications led by the Firm, the lending commitments accepted by the borrower but not yet close d are net of the amounts agreed to by counterparties that will participate in the syndication. For syndications that the Firm participates in and does not lead, lending commitments accepted by the borrower but not yet closed include only the amount that th e Firm expects it will be allocated from the lead syndicate bank. Due to the nature of the Firm’s obligations under the commitments, these amounts include certain commitments participated to third parties. See Note 7 for further information. Forwa rd-Starting Secured Financing Receivables . This amount includes securities purchased under agreements to resell and securities borrowed that the Firm has entered into prior to the balance sheet date that will settle after the balance sheet date. Also incl uded are commitments to enter into securities purchased under agreements to resell that are provided to certain clearinghouses or associated depositories that the Firm is a member of and are contingent upon the default of a clearinghouse member or other st ress event. These transactions are primarily secured by collateral from U.S. government agency securities and other sovereign government obligations when they are funded. Underwriting Commitments . The Firm provides underwriting commitments in connection with its capital raising sources to a diverse group of corporate and other institutional clients. Investment Activities . The Firm sponsors several non-consolidated investment man agement 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 m ajority. The Firm’s employees, including its senior offic ers as well as the Firm’s Board of Directors (“Board”) , may participate on the same terms and conditions as other investors in certain of these funds that the Firm sponsors primarily for client inves tment, except that the Firm may waive or lower applicable fees and charges for its employees. The Firm has contractual capital commitments, guarantees and counterparty arrangements with respect to these investment management funds. Letters of Credit and Other Financial Guarantees . The Firm has outstanding letters of credit and other financial guarantees issued by third-party banks to certain of the Firm’s counterparties. The Firm is contingently liable for these letters of credit and other financial gua rantees, which are primarily used to provide collateral for securities and commodities traded and to satisfy various margin requirements in lieu of depositing cash or securities with these counterparties. Premises and Equipment . The Firm has non-cancelable operating leases covering premises and equipment. F uture minimum rental commitments under such leases (net of sublease commitments, principally on office rentals) were as follows: Operating Premises Leases At December 31, $ in millions 2017 2018 $ 664 2019 624 2020 559 2021 494 2022 444 Thereafter 2,639 Total $ 5,424 Total minimum rental income to be received in the future under non-cancelable operating subleases $ 12 $ in millions 2017 2016 2015 Rent expense $ 704 $ 689 $ 705 Occupancy lease agreements, in addition to base rentals, generally provide for rent and operating expense escalations resulting from increased assessments for real estate taxes and other charges. Guarantees Obligations under Guarantee Arrangements at December 31, 2017 Maximum Potential Payout/Notional Years to Maturity $ in millions Less than 1 1-3 3-5 Over 5 Total Credit derivatives $ 88,226 $ 81,673 $ 94,110 $ 25,876 $ 289,885 Other credit contracts 2 — — 134 136 Non-credit derivatives 1,505,001 1,085,197 343,121 549,989 3,483,308 Standby letters of credit and other financial guarantees issued 1 830 1,152 1,215 5,036 8,233 Market value guarantees 38 58 68 — 164 Liquidity facilities 3,333 — — — 3,333 Whole loan sales guarantees — 1 1 23,244 23,246 Securitization representations and warranties — — — 60,157 60,157 General partner guarantees 32 52 324 25 433 Carrying Amount (Asset)/ Collateral/ $ in millions Liability Recourse Credit derivatives 2 $ (1,960) $ — Other credit contracts 16 — Non-credit derivatives 2 37,123 — Standby letters of credit and other financial guarantees issued 1 (199) 6,743 Market value guarantees — — Liquidity facilities (5) 5,547 Whole loan sales guarantees 8 — Securitization representations and warranties 91 — General partner guarantees 60 — 1. These amounts include certain issued standby letters of credit participated to third parties, totaling $ 0.7 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements. 2. 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 . Types of Guarantees Derivative Contracts . Certain derivative contracts meet the accounting definition of a guarantee, including certain written options, contingent forward contracts and CDSs (see Note 4 regarding credit derivatives in which the Firm has sold credit protection to the counterparty). I nformation regarding all derivative contracts that could meet the accounting definition of a guarantee is included in the previous table whe rein the notional amount is used as the maximum potential payout for certain derivative contracts, such as written interest rate caps and written foreign currency options. In certain situations, collateral may be held by the Firm for those contracts that meet the definition of a guarantee. Generally, the Firm sets collateral requirements by counterparty so that the collateral covers various transactions and products and is not allocated specifically to individual contracts. Also, the Firm may recover amou nts related to the underlying asset delivered to the Firm under the derivative contract. The Firm records derivative contracts at fair value. Aggregate market risk limits have been established, and market risk measures are routinely monitored against th ese limits. The Firm also manages its exposure to these derivative contracts through a variety of risk mitigation strategies, including, but not limited to, entering into offsetting economic hedge positions. The Firm believes that the notional amounts of t he derivative contracts generally overstate its exposure. Standby Letters of Credit and Other Financial Guarantees Issued . In connection with its corporate lending business and other corporate activities, the Firm provides standby letters of credit and other financial guarantees to counterparties. Such arrangements represent obligations to make payments to third parties if the counterparty fails to fulfill its obligation under a borrowing arrangement or other contractual obligation. A majority of the Fi rm’s standby letters of credit are provided on behalf of counterparties that are investment grade. Market Value Guarantees . Market value guarantees are issued to guarantee timely payment of a specified return to investors in certain affordable housing tax credit funds. These guarantees are designed to return an investor’s contribution to a fund and the investor’s share of tax losses and tax credits expected to be generated by a fund. From time to time, the Firm may also guarantee return of principal in vested, potentially including a specified rate of return, to fund investors. Liquidity Facilities . The Firm has entered into liquidity facilities with SPE s and other counterparties, whereby the Firm is required to make certain payments if losses or def aults occur. Primarily, the Firm acts as liquidity provider to municipal bond securitization SPEs and for standalone municipal bonds in which the holders of beneficial interests issued by these SPEs or the holders of the individual bonds, respectively, hav e the right to tender their interests for purchase by the Firm on specified dates at a specified price. The Firm often may have recourse to the underlying assets held by the SPEs in the event payments are required under such liquidity facilities, as well a s make-whole or recourse provisions with the trust sponsors. Primarily all of the underlying assets in the SPEs are investment grade. Liquidity facilities provided to municipal tender option bond trusts are classified as derivatives. Whole Loan Sales Gu arantees . The Firm has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain whole loan sales. Under certain circumstances, the Firm may be required to repurchase such assets or make other payments related to such assets if such representations and warranties are breached. The Firm ’s maximum potential payout related to such representations and warranties is equal to the current UPB of such loans. The Firm has information on the current UPB only when it servi ces the loans. The Firm no longer services those loans and the amount included in the previous table represents the UPB at the time of sale or at the time when the Firm last serviced any of those loans . The current UPB balances could be substan tially lower than the maximum potential payout amount included in the previous table. The related liability primarily relates to sales of loans to the federal mortgage agencies. Securitization Representations and Warranties . As part of the Firm’s Institutional Securities business segment’s securitization s 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. The extent and nature of the representation s and warranties, if any, vary among different securitizations. Under certain circumstances, the Firm may be required to repurchase certain assets or make other payments related to such assets if such representations and warranties are breached. The maximu m potential amount of future payments the Firm could be required to make would be equal to the current outstanding balances of, or losses associated with, the assets subject to breaches of such representations and warranties. The amount included in the pre vious table for the maximum potential payout includes the current UPB or historical losses where known , and the UPB at the time of sale when the current UPB is not known. The Firm has provided, or otherwise agreed to be responsible for, certain represent ations and warranties related to RMBS primarily containing U.S. residential loans that the Firm sponsored between 2004 and 2017. In certain cases, the Firm has agreed to be responsible for representations and warranties made by third-party sellers, many of which are now insolvent. The Firm also provided representations and warranties in connection with its role as an originator of certain commercial mortgage loans that it securitized into CMBS. Securitization Representations and Warranties At December 31, 2017 $ in millions RMBS CMBS Maximum potential payout/notional $ 25,508 $ 34,649 Reserve for payments owed 1 91 — 1. Reserved in the Firm’s financial statements for payments to resolve claims related to breach of representations and warranties in connection with residential mortgages. General Partner Guarantees . As a general partner in certain investment manageme nt funds, the Firm receives certain distributions from the partnerships related to achieving certain return hurdles according to the provisions of the partnership agreements. The Firm may be required to return all or a portion of such distributions to the limited partners in the event the limited partners do not achieve a certain return as specified in the various partnership agreements, subject to certain limitations. 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 are described below: • Indemnities. The Firm provides standard indemnities to co unterparties for certain contingent exposures and taxes, including U.S. and foreign withholding taxes, on interest and other payments made on derivatives, securities and stock lending transactions, certain annuity products and other financial arrangements. These indemnity payments could be required based on a change in the tax laws, a change in interpretation of applicable tax rulings or a change in factual circumstances. Certain contracts contain provisions that enable the Firm to terminate the agreement u pon the occurrence of such events. The maximum potential amount of future payments that the Firm could be required to make under these indemnifications cannot be estimated. • Exchange/Clearinghouse Member Guarantees. The Firm is a member of various U. S. and non-U.S. exchanges and clearinghouses that trade and clear securities and/or derivative contracts. Associated with its membership, the Firm may be required to pay a certain amount as determined by the exchange or the clearinghouse in case of a defau lt of any of its members or pay a proportionate share of the financial obligations of another member that may default on its obligations to the exchange or the clearinghouse. While the rules governing different exchange or clearinghouse memberships and the forms of these guarantees may vary, in general the Firm’s obligations under these rules would arise only if the exchange or clearinghouse had previously exhausted its resources. In addition, some clearinghouse rules require members to assume a proportionate share of losses resulting from the clearinghouse’s investment of guarantee fund contributions and initial margin, and of other losses unrelated to the default of a clearing member, if such losses exceed the specified resources allocated for s uch purpose by the clearinghouse. The maximum potential payout under these rules cannot be estimated. The Firm has not recorded any contingent liability in its financial statements for these agreements and believes that any potential requirement to make payments under these agreements is remote. • Merger and Acquisition Guarantees. The Firm may, from time to time, in its role as investment banking advisor be required to provide guarantees in connection with certain European merger and acquisition tra nsactions. If required by the regulating authorities, the Firm provides a guarantee that the acquirer in the merger and acquisition transaction has or will have sufficient funds to complete the transaction and would then be required to make the acquisition payments in the event the acquirer’s funds are insufficient at the completion date of the transaction. These arrangements generally cover the time frame from the transaction offer date to its closing date and, therefore, are generally short term in nature . The Firm believes the likelihood of any payment by the Firm under these arrangements is remote given the level of its due diligence in its role as investment banking advisor. In addition, in the ordinary course of business, the Firm guarantees the deb t 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 requi red 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 financial statements. Contingencies Legal . In addition to the matters described below, i n 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 globa l 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 other wise 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 i nvestigatory 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 will continue to be the subject of elevated 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 th at it is probable a liability had been incurred at the date of the financial statements and the Firm can reasonably estimate the amount of that loss, the Firm accrues the estimated loss by a charge to income. $ in millions 2017 2016 2015 Legal expenses $ 342 $ 263 $ 563 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 reasonab ly estimate such losses, particularly for proceedings and investigations where the factual record is being developed or contested or where plaintiffs or government 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 addressin g 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 wit h counsel, that such losses will have a material adverse effect on the Firm’s 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 a gainst 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 CDS refe rencing 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 F irm knew that the assets backing the CDO were of poor quality when it entered into the CDS with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the CDS , 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 incu r a loss in this action of up to approximately $ 240 million plus pre- and post-judgment interest, fees and costs. On May 3, 2013 , plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against the Firm , cer tain 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 c ontaining residential mortgage loans . The total amount of certificates allegedly sponsored, underwritten and/or sold by the Firm to plaintiff was approximately $6 3 4 million. The complaint alleges causes of action against the Firm for common law fraud, frau dulent 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 com plaint. On June 20, 2017 the Appellate Division affirmed the lower court’s June 10, 2014 order. On October 3, 2017, the Appellate Division denied the Firm’s motion for leave to appeal to the New York Court of Appeals. At December 25, 2017, the current unpa id balance of the mortgage pass-through certificates at issue in this action was approximately $2 1 5 million, and the certificates had incurred actual losses of approximately $88 million. Based on currently available information, the Firm believes it could incur a loss in this action up to the difference between the $2 1 5 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 inte rest, 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, Successor-by-Merger to Morgan Stanley Mortgage Capital Inc. and GreenPoint Mortgage Fundin g, Inc. , pending in the Suprem e 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 com plaint 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 recei ved 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 for Morgan Stanley Mortgage Loan Trust 2007-12, filed a complaint against the Firm styled Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al. , 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 re lief, unspecified damages, attorneys’ fees, interest and costs. 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. On July 11, 2017, the Appellate Division affirmed i n part and reversed in part the trial court’s order that granted in part the Firm’s motion to dismiss. On September 26, 2017, the Appellate Division denied plaintiff’s motion for leave to appeal to the New York Court of Appeals. Based on currently availabl e 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 T rust 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 United States District Court for the Southern District of New York (“ 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, sp ecific 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 co mplaint. On January 10, 2018, the court reinstated plaintiff’s breach of contract claim based on failure to notify, which had been dismissed in its April 3, 2015 order. On January 24, 2018, the court denied the Firm’s motion for summary judgment. On Febru ary 5, 2018, the Firm filed a motion for judgment on the pleadings and a renewed motion for summary judgment. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $ 292 million, the tot al 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 possib le range of loss could increase. On September 19, 2014 , Financial Guaranty Insurance Company (“FGIC”) filed a complaint against the Firm in the Supreme Court of NY , styled Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. re lating to a securitization issued by Basket of Aggregated Residential NIMS 2007-1 Ltd. The complaint asserts claims for breach of contract and alleges, among other things, that the net interest margin securities (“NIMS”) in the trust breached various repre sentations and warranties. FGIC issued a financial guaranty policy with respect to certain notes that had an original balance of approximately $475 million. The complaint seeks, among other relief, specific performance of the NIMS breach remedy procedures in the transaction documents, unspecified damages, reimbursement of certain payments made pursuant to the transaction documents, attorneys’ fees and interest. On November 24, 2014, the Firm filed a motion to dismiss the complaint, which the court denied on January 19, 2017. On February 24, 2017, the Firm filed a notice of appeal of the denial of its motion to dismiss the complaint and perfected its appeal on November 22, 2017. Based on currently available information, the Firm believes that it could incur a loss in this action of up to approximately $ 126 million, the unpaid balance of these notes, plus pre- and post-judgment interest, fees and costs, as well as claim payments that FGIC has made and will make in the future. On September 23, 2014 , FGIC filed a complaint against the Firm in the Supreme Court of NY styled Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. relating to the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4. The complaint asserts claims for breach of con tract and fraudulent inducement and alleges, among other things, that the loans in the trust breached various representations and warranties and defendants made untrue statements and material omissions to induce FGIC to issue a financial guaranty policy on certain classes of certificates that had an original balance of approximately $876 million. The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential and pu nitive damages, attorneys’ fees and interest. On January 23, 2017, the court denied the Firm’s motion to dismiss the complaint. On February 24, 2017, the Firm filed a notice of appeal of the court’s order and perfected its appeal on November 22, 2017. Base d 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 FGIC that the Firm did not repurchase, plus pre- and post-judgment interest, fees and costs, as well as claim payments that FGIC has made and will make in the future. In addition, 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 Morga n 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 cla ims 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, speci fic 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 December 11, 2015, the court gra nted in part and denied in part the Firm’s motion to dismiss the complaint. On February 11, 2016, plaintiff filed a notice of appeal of that order, and the appeal was fully briefed on August 19, 2016. Based on currently available information, the Firm beli eves that it could incur a loss in this action of up to approximately $ 277 million, the total original u |
Variable Interest Entities and
Variable Interest Entities and Securitization Activities | 12 Months Ended |
Dec. 31, 2017 | |
Securitization Activities and Variable Interest Entities [Abstract] | |
Variable Interest Entity Disclosures | 13 . Variable Interest Entities and Securitization Activities Overview The Firm is involved with various SPEs in the normal course of business. In most cases, these entities are deemed to be VIEs. The Firm’s variable interests in VIEs include debt and equity interests, commitments, guarantees, derivative instruments and certain fees. The Firm’s involvement with VIEs arises primarily from: • Interests purchased in connection with market-making activities, securities held in its Investment securities portfolio and retained interests held as a result of se curitization activities, including re-securitization transactions. • Guarantees issued and residual interests retained in connection with municipal bond securitizations. • Loans made to and investments in VIEs that hold debt, equity, real estate or o ther assets. • Derivatives entered into with VIEs. • Structuring of CLNs or other asset-repackaged notes designed to meet the investment objectives of clients. • Other structured transactions designed to provide tax-efficient yields to the Firm or its clients. The Firm determines whether it is the primary beneficiary of a VIE upon its initial involvement with the VIE and reassesses whether it is the primary beneficiary on an ongoing basis as long as it has any continuing involvement with the VIE. This determination is based upon an analysis of the design of the VIE, including the VIE’s structure and activities, the power to make significant economic decisions held by the Firm and by other parties, and the variable interests owned by the Firm and o ther parties. The power to make the most significant economic decisions may take a number of different forms in different types of VIEs. The Firm considers servicing or collateral management decisions as representing the power to make the most significa nt economic decisions in transactions such as securitizations or CDOs. As a result, the Firm does not consolidate securitizations or CDOs for which it does not act as the servicer or collateral manager unless it holds certain other rights to replace the se rvicer or collateral manager or to require the liquidation of the entity. If the Firm serves as servicer or collateral manager, or has certain other rights described in the previous sentence, the Firm analyzes the interests in the VIE that it holds and con solidates only those VIEs for which it holds a potentially significant interest in the VIE. The structure of securitization vehicles and CDOs is driven by several parties, including loan seller(s) in securitization transactions, the collateral manager i n a CDO, one or more rating agencies, a financial guarantor in some transactions and the underwriter(s) of the transactions, that serve to reflect specific investor demand. In addition, subordinate investors, such as the “B-piece” buyer ( i.e., investors in most subordinated bond classes) in commercial mortgage-backed securitizations or equity investors in CDOs, can influence whether specific loans are excluded from a CMBS transaction or investment criteria in a CDO. For many transactions, such as re-secur itization transactions, CLNs and other asset-repackaged notes, there are no significant economic decisions made on an ongoing basis. In these cases, the Firm focuses its analysis on decisions made prior to the initial closing of the transaction and at the termination of the transaction. T he Firm concluded in most of these transactions that decisions made prior to the initial closing were shared between the Firm and the initial investors based upon the nature of the assets, including whether the assets were issued in a transaction sponsored by the Firm and the extent of the information available to the Firm and to investors, the number, nature and involvement of investors, other rights held by the Firm and investors, the standardization of the legal documenta tion and the level of continuing involvement by the Firm, including the amount and type of interests owned by the F irm and by other investors . The Firm focused its control decision on any right held by the Firm or investors related to the termination of th e VIE. Most re-securitization transactions, CLNs and other asset-repackaged notes have no such termination rights. Consolidated VIEs Assets and Liabilities by Type of Activity At December 31, 2017 At December 31, 2016 $ in millions VIE Assets VIE Liabilities VIE Assets VIE Liabilities CLN $ — $ — $ 501 $ — OSF 378 3 602 10 MABS 1 249 210 397 283 Other 2 1,174 250 910 25 Total $ 1,801 $ 463 $ 2,410 $ 318 OSF—Other structured financings Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets. The value of assets is determined based on the fair value of the liabilities 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 December 31, At December 31, $ in millions 2017 2016 Assets Cash and cash equivalents: Cash and due from banks $ 69 $ 74 Restricted cash 222 255 Trading assets at fair value 833 1,295 Customer and other receivables 19 13 Goodwill 18 18 Intangible assets 155 177 Other assets 485 578 Total $ 1,801 $ 2,410 Liabilities Other secured financings at fair value $ 438 $ 289 Other liabilities and accrued expenses 25 29 Total $ 463 $ 318 Consolidated VIE assets and liabilities are presented in the previous tables after intercompany eliminations. Most assets owned by consolidated VIEs cannot be removed unilaterally by the Firm and are not generally available to the Firm. Most related liabil ities issued by consolidated VIEs are non-recourse to the Firm. In certain other consolidated VIEs, the Firm either has the unilateral right to remove assets or provides additional recourse through derivatives such as total return swaps, guarantees or othe r forms of involvement. 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 holde rs. Select Information Related to Consolidated VIEs At December 31, At December 31, $ in millions 2017 2016 Noncontrolling interests $ 189 $ 228 Maximum exposure to losses 1 — 78 Primarily related to certain derivatives, commitments, guarantees and other forms of involvement not recognized in the financial statements . Non-c onsolidated VIEs T he 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 and exclude exposure to loss from liabilities due to immateriality . Most of the VIEs included in the following tables a re 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 VIEs At December 31, 2017 $ in millions MABS CDO MTOB OSF Other VIE assets (unpaid principal balance) $ 89,288 $ 9,807 $ 5,306 $ 3,322 $ 31,934 Maximum exposure to loss Debt and equity interests $ 10,657 $ 1,384 $ 80 $ 1,628 $ 4,730 Derivative and other contracts — — 3,333 — 1,686 Commitments, guarantees and other 1,214 668 — 164 433 Total $ 11,871 $ 2,052 $ 3,413 $ 1,792 $ 6,849 Carrying value of exposure to loss—Assets Debt and equity interests $ 10,657 $ 1,384 $ 43 $ 1,202 $ 4,730 Derivative and other contracts — — 5 — 184 Total $ 10,657 $ 1,384 $ 48 $ 1,202 $ 4,914 At December 31, 2016 $ in millions MABS CDO MTOB OSF Other VIE assets (unpaid principal balance) $ 101,916 $ 11,341 $ 4,857 $ 4,293 $ 39,077 Maximum exposure to loss Debt and equity interests $ 11,243 $ 1,245 $ 50 $ 1,570 $ 4,877 Derivative and other contracts — — 2,812 — 45 Commitments, guarantees and other 684 99 — 187 228 Total $ 11,927 $ 1,344 $ 2,862 $ 1,757 $ 5,150 Carrying value of exposure to loss—Assets Debt and equity interests $ 11,243 $ 1,245 $ 49 $ 1,183 $ 4,877 Derivative and other contracts — — 5 — 18 Total $ 11,243 $ 1,245 $ 54 $ 1,183 $ 4,895 MTOB— Municipal tender option bonds Non-consolidated VIE Mortgage- and Asset-Backed Securitization Assets At December 31, 2017 At December 31, 2016 UPB Debt and Equity Interests UPB Debt and Equity Interests $ in millions Residential mortgages $ 15,636 $ 1,272 $ 4,775 $ 458 Commercial mortgages 46,464 2,331 54,021 2,656 U.S. agency collateralized mortgage obligations 16,223 3,439 14,796 2,758 Other consumer or commercial loans 10,965 3,615 28,324 5,371 Total $ 89,288 $ 10,657 $ 101,916 $ 11,243 The Firm’s maximum exposure to loss presented in the previous table often differs from the carrying value of the variable interests held by the Firm. The maximum exposure to loss presented in the previous table 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 gen erally are non-recourse to the Firm. Where notional amounts are utilized in quantifying the 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 pres ented in the previous table 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 presented in the previous table is not reduced by the a mount of collateral held as part of a transaction with the VIE or any party to the VIE directly against a sp ecific exposure to loss. Securitization transactions generally involve VIEs. Primarily as a result of its secondary market-making activities, the F irm owned additional VIE assets mainly issued by securitization SPEs for which the maximum exposure to loss is less than specific thresholds. Additional VIE Assets Owned At December 31, 2017 At December 31, 2016 $ in millions VIE assets $ 11,318 $ 11,685 These assets were either retained in connection with transfers of assets by the Firm, acquired in connection with secondary market-making activities, held as AFS securities in its Investment securities portfolio (see Note 5 ), or held as investments in funds. At December 31, 2017 and December 31, 2016 , 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 highest risk 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 facilit ies, such as liquidity facilities, guarantees or similar derivatives. The Firm’s maximum exposure to loss generally equals the fair value of the assets owned. Securitization Activities In a securitization transaction, the Firm transfers assets (generally commercial or residential mortgage loans or U.S. agency securities) to an SPE, sells to investors most of the beneficial interests, such as notes or certificates, issued by the SPE, and, in many cases, retains other beneficial interests. In many securitization transactions involving commercial mortgage loans , the Firm transfers a portion of the assets to the SPE with unrelated parties transferring the remaining assets. The purchase of the transferred assets by the SPE is financed through the sale of these interests. In some of these transactions, primarily involving residential mortgage loans in the U.S., the Firm serves as servicer for some or all o f the transferred loans. In many securitizations, particularly involving residential mortgage loans , the Firm also enters into derivative transactions, primarily interest rate swaps or interest rate caps, with the SPE. Although not obligated, the Firm g enerally makes a market in the securities issued by SPEs in these transactions. As a market maker, the Firm offers to buy these securities from, and sell these securities to, investors. Securities purchased through these market-making activities are not co nsidered to be retained interests, although these beneficial interests generally are included in Trading assets—Corporate and other debt and are measured at fair value. The Firm enters into derivatives, generally interest rate swaps and interest rate ca ps, with a senior payment priority in many securitization transactions. The risks associated with these and similar derivatives with SPEs are essentially the same as similar derivatives with non-SPE counterparties and are managed as part of the Firm’s over all exposure. See Note 4 for further information on derivative instruments and hedging activities. Available- for - Sale Securities In the AFS securities within the Investment securities portfolio, the Firm holds securities issued by VIEs not sponso red by the Firm. These securities include an explicit and implicit guarantee provided by the U.S. government issued in transactions sponsored by the federal mortgage agencies and the most senior securities issued by VIEs in which the securities are backed by student loans, automobile loans, commercial mortgage loans or CLOs (see Note 5 ). Municipal Tender Option Bond Trusts In a municipal tender option bond trust transaction, the Firm, generally on behalf of a client, transfers a municipal bond to a trust. The trust issues short-term securities that the Firm, as the remarketing agent, sells to investors. The client retains a residual interest. The short-term securities are supported by a liquidity facility pursuant to which the investors may put their short-term interests. In some programs, the Firm provides this liquidity facility; in most programs, a third-party provider will provide such liquidity facility. The Firm may purchase short-term securities in its role either as remarketing agent or as l iquidity provider. The client can generally terminate the transaction at any time. The liquidity provider can generally terminate the transaction upon the occurrence of certain events. When the transaction is terminated, the municipal bond is generally sol d or returned to the client. Any losses suffered by the liquidity provider upon the sale of the bond are the responsibility of the client. This obligation generally is collateralized. Liquidity facilities provided to municipal tender option bond trusts are classified as derivatives. The Firm consolidates any municipal tender option bond trusts in which it holds the residual interest. Credit Protection Purchased through Credit-Linked Note s In a CLN transaction, the Firm transfers assets (generally high-quality securities or money market investments) to an SPE, enters into a derivative transaction in which the SPE writes protection on an unrelated reference asset or group of assets, through a CDS , a total return swap or similar instrument, and sells to investors the securities issued by the SPE. In some transactions, the Firm may also enter into interest rate or currency swaps with the SPE. Upon the occurrence of a credit event related to the reference asset, the SPE will deliver collateral securities as payment to the Firm. The Firm is generally exposed to price changes on the collateral securities in the event of a credit event and subsequent sale. These transactions are designed to provide investors with exposure to certain credit risk on the refere nce asset. In some transactions, the assets and liabilities of the SPE are recognized in the Firm’s balance sheets. In other transactions, the transfer of the collateral securities is accounted for as a sale of assets, and the SPE is not consolidated. The structure of the transaction determines the accounting treatment. Derivative p ayments by the SPE are collateralized. The risks associated with these and similar derivatives with SPEs are essentially the same as similar derivatives with non-SPE counterp arties and are managed as part of the Firm’s overall exposure. Other Structured Financings The Firm invests in interests issued by entities that develop and own low-income communities (including low-income housing projects) and entities that construct and own facilities that will generate energy from renewable resources. The interests entitle the Firm to its share of tax credits and tax losses generated by these projects. In addition, the Firm has issued guarantees to inve stors in certain low-income housing funds. The guarantees are designed to return an investor’s contribution to a fund and the investor’s share of tax losses and tax credits expected to be generated by the fund. The Firm is also involved with entities desig ned to provide tax-efficient yields to the Firm or its clients. Collateralized Loan and Debt Obligations A CLO or a CDO is an SPE that purchases a pool of assets, consisting of corporate loans, corporate bonds, ABS or synthetic exposures on similar ass ets through derivatives, and issues multiple tranches of debt and equity securities to investors. The Firm underwrites the securities issued in CLO transactions on behalf of unaffiliated sponsors and provides advisory services to these unaffiliated sponsor s. The Firm sells corporate loans to many of these SPEs, in some cases representing a significant portion of the total assets purchased. If necessary, the Firm may retain unsold securities issued in these transactions. Although not obligated, the Firm gene rally makes a market in the securities issued by SPEs in these transactions. These beneficial interests are included in Trading assets and are measured at fair value. Equity-Linked Notes In an ELN transaction, the Firm typically transfers to an SPE eit her (1) a note issued by the Firm, the payments on which are linked to the performance of a specific equity security, equity index, or other index or (2) debt securities issued by other companies and a derivative contract, the terms of which will relate to the performance of a specific equity security, equity index or other index. These transactions are designed to provide investors with exposure to certain risks related to the specific equity security, equity index or other index. ELN transactions with SPE s were not consolidated at December 31, 2017 and December 31, 2016 . Transactions with SPEs in which the Firm, acting as principal, transferred financial assets with continuing involvement and received sales treatment are shown in the following tables. Transfers of Assets with Continuing Involvement At December 31, 2017 RML CML U.S. Agency CMO CLN and Other 1 $ in millions SPE assets (UPB) 2 $ 15,555 $ 62,744 $ 11,612 $ 17,060 Retained interests Investment grade $ — $ 293 $ 407 $ 4 Non-investment grade (fair value) 1 98 — 478 Total $ 1 $ 391 $ 407 $ 482 Interests purchased in the secondary market (fair value) Investment grade $ — $ 94 $ 439 $ — Non-investment grade 16 66 — 4 Total $ 16 $ 160 $ 439 $ 4 Derivative assets (fair value) $ 1 $ — $ — $ 226 Derivative liabilities (fair value) — — — 85 At December 31, 2016 RML CML U.S. Agency CMO CLN and Other 1 $ in millions SPE assets(UPB) 2 $ 19,381 $ 43,104 $ 11,092 $ 11,613 Retained interests (fair value) Investment grade $ — $ 22 $ 375 $ — Non-investment grade 4 79 — 826 Total $ 4 $ 101 $ 375 $ 826 Interests purchased in the secondary market (fair value) Investment grade $ — $ 30 $ 26 $ — Non-investment grade 23 75 — — Total $ 23 $ 105 $ 26 $ — Derivative assets (fair value) $ — $ 261 $ — $ 89 Derivative liabilities (fair value) — — — 459 RML—Residential mortgage loans CML—Commercial mortgage loans Amounts include CLO transactions managed by unrelated third parties. Amounts include assets transferred by unrelated transferors . Fair Value at December 31, 2017 $ in millions Level 2 Level 3 Total Retained interests Investment grade $ 407 $ 4 $ 411 Non-investment grade 22 555 577 Total $ 429 $ 559 $ 988 Interests purchased in the secondary market Investment grade $ 531 $ 2 $ 533 Non-investment grade 57 29 86 Total $ 588 $ 31 $ 619 Derivative assets $ 78 $ 149 $ 227 Derivative liabilities 81 4 85 Fair Value at December 31, 2016 $ in millions Level 2 Level 3 Total Retained interests Investment grade $ 385 $ 12 $ 397 Non-investment grade 14 895 909 Total $ 399 $ 907 $ 1,306 Interests purchased in the secondary market Investment grade $ 56 $ — $ 56 Non-investment grade 84 14 98 Total $ 140 $ 14 $ 154 Derivative assets $ 348 $ 2 $ 350 Derivative liabilities 98 361 459 Transferred assets are carried at fair value prior to securitization, and any changes in fair value are recognized in the income statements. 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 int erests are generally carried at fair value in the balance sheets with changes in fair value recognized in the income statements. Proceeds from New Securitization Transactions and Sales of Loans $ in millions 2017 2016 2015 New transactions 1 $ 23,939 $ 18,975 $ 21,243 Retained interests 2,337 2,701 3,062 Sales of corporate loans to CLO SPEs 1, 2 191 475 1,110 Net gains on new transactions and sale s of corporate loans to CLO entities at the time of the sale were not material for all periods presented. Sponsored by non-affiliates . 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 12 ). 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. Assets Sold with Retained Exposure At December 31, 2017 At December 31, 2016 $ in millions Carrying value of assets derecognized at the time of sale and gross cash proceeds $ 19,115 $ 11,209 Fair value Assets sold $ 19,138 $ 11,301 Derivative assets recognized in the balance sheets 176 128 Derivative liabilities recognized in the balance sheets 153 36 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 balance sheets (see Note 11 ). The assets transferred to certain 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 al so non-recourse to the Firm. In certain other failed sale transactions, the Firm has the right to remove assets or provides 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 December 31, 2017 At December 31, 2016 $ in millions Assets Liabilities Assets Liabilities Failed sales $ 552 $ 552 $ 285 $ 285 |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Requirements | |
Regulatory Requirements | 14 . Regulatory Requirements Regulatory Capital Framework The Firm is an FHC under the Bank Holding Company Act of 1956, as amended , and is subject to the regulation and oversight of the Board of Governors of the Federal Reserve System (“F ederal Reserve”). The Federal Reserve establishes capital requirements for the Firm, including well-capitalized standards, and evaluates the Firm’s compliance with such capital requirements. The OCC establishes similar capital requirements and standards for MSBNA and MSPBNA (co llectively, our “U.S. Bank Subsidiaries”) . The regulatory capital requirements are largely based on the Basel III capital standards established by the Basel Committee on Banking Supervision and also implement certain provisions of the D odd-Frank Wall Street Reform and Consumer Protection Act . Regulatory Capital Requirements The Firm is required to maintain minimum risk-based and leverage capital ratios under the regulatory capital requirements. A summary of the calculations of regulatory capital, RWAs and transition provisions follows. 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 goodwill, intangible assets, certain deferred tax assets , other amounts in AOCI 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 requ irements, on a fully phased-in basis by 2019, the Firm will be subject to the following buffers : A greater than 2.5% Common Equity Tier 1 capital conservation buffer; The Common Equity Tier 1 G-SIB capital surcharge, currently at 3%; and Up to a 2.5% C ommon Equity Tier 1 CCyB , currently set by U.S. banking agencies at zero . The phase-in amount for each of the buffers was 50% of the fully phased-in buffer requirement in 2017, and increas es to 75% in 2018 . 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. Risk-Weighted Assets RWAs reflect both the Firm’s 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 obligations to the Firm; Market risk: Adverse changes in the level of one or more market prices, rates, indices, volatilities, correlations or other market factors, such as market liquidity; and Operational risk: I nadequate or failed processes or systems, from human factors or from external events ( e.g. , fraud, theft, legal and compliance risks, cyber attacks or damage to physical assets). The Firm’s risk-ba sed capital ratios for purposes of determining regulatory compliance are the lower of the capital ratios computed under (i) the standardized approaches for calculating credit risk and market risk RWAs (“ Standardized Approach”) and (ii) the applicable advan ced approaches for calculating credit risk, market risk and operational risk RWAs (“ Advanced Approach”). The Firm’s Regulatory Capital and Capital Ratios At December 31, 2017 , the Firm’s ratios are based on the Standardized Approach transitional rules. At December 31, 2016 , the Firm’s ratios were based on the Advanced Approach transitional rules. Regulatory Capital At December 31, 2017 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 61,134 16.5% 7.3% Tier 1 capital 69,938 18.9% 8.8% Total capital 80,275 21.7% 10.8% Tier 1 leverage — 8.3% 4.0% Total RWAs $ 369,578 N/A N/A Adjusted average assets 2 842,270 N/A N/A At December 31, 2016 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 60,398 16.9% 5.9% Tier 1 capital 68,097 19.0% 7.4% Total capital 78,642 22.0% 9.4% Tier 1 leverage — 8.4% 4.0% Total RWAs $ 358,141 N/A N/A Adjusted average assets 2 811,402 N/A N/A 1. Percentages represent minimum regulatory capital ratios under the transitional rules. 2 . 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 quarter ended December 31, 2017 and December 31, 2016 , res pectively , 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 The Firm’s 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 U.S. Bank Subsidiaries ’ and the Firm’s financial s tatements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each of the U.S. Bank Subsidiaries must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-b alance sheet items as calculated under regulatory accounting practices. Each U.S. depository institution subsidiary of the Firm must be well-capitalized in order for the Firm to continue to qualify as an FHC and to continue to engage in the broadest rang e of financial activities permitted for financial holding companies. Under regulatory capital requirements adopted by the U.S. federal banking agencies, U.S. depository institutions must maintain certain minimum capital ratios in order to be considered wel l-capitalized. At December 31, 2017 and December 31, 2016 , 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 requ irements identified by the U.S. federal banking regulators. At December 31, 2017 and December 31, 2016 , the U.S. Bank Subsidiaries’ ratios are based on the Standardized Approach transitional rules. MSBNA’s Regulatory Capital At December 31, 2017 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 15,196 20.5% 6.5% Tier 1 capital 15,196 20.5% 8.0% Total capital 15,454 20.8% 10.0% Tier 1 leverage 15,196 11.8% 5.0% At December 31, 2016 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 13,398 16.9% 6.5% Tier 1 capital 13,398 16.9% 8.0% Total capital 14,858 18.7% 10.0% Tier 1 leverage 13,398 10.5% 5.0% 1. Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. MSPBNA’s Regulatory Capital At December 31, 2017 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 6,215 24.4% 6.5% Tier 1 capital 6,215 24.4% 8.0% Total capital 6,258 24.6% 10.0% Tier 1 leverage 6,215 9.7% 5.0% At December 31, 2016 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 5,589 26.1% 6.5% Tier 1 capital 5,589 26.1% 8.0% Total capital 5,626 26.3% 10.0% Tier 1 leverage 5,589 10.6% 5.0% 1. Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. U.S. Broker-Dealer Regulatory Capital Requirements MS&Co. Regulatory Capital $ in millions At December 31, 2017 At December 31, 2016 Net capital $ 10,142 $ 10,311 Excess net capital 8,018 8,034 MS&Co. is a registered U.S. broker-dealer and registered futures commission merchant and, accordingly, is subject to the minimum net capital requirements of the SEC and the CFTC. MS&Co. has consistently operated with capital in excess of its regulatory capital requirements. As an Alternative Net Capital broker- dealer, and in accordance with the market and credit risk standards of Appendix E of SEC Rule 15c3-1, MS&Co. is subject to minimum net capital and tentative net capital requirements . In addition, MS&Co. must notify the SEC if its tentative net capit al falls below certain levels. At December 31, 2017 and December 31, 2016 , MS&Co. has exceeded its net capital requirement and has tentative net capital in excess of the minimum and notification r equirements . MSSB LLC Regulatory Capital $ in millions At December 31, 2017 At December 31, 2016 Net capital $ 2,567 $ 3,946 Excess net capital 2,400 3,797 MSSB LLC is a registered U.S. broker- dealer and introducing broker for the futures business and, accordingly, is subject to the minimum net capital requirements of the SEC. MSSB LLC has consistently operated with capital in excess of its regulatory capital requirements. Other Regulated Subsidiaries MSIP, a London-based broker-dealer subsidiary, is subject to the capital requirements of the PRA, and 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. 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 requi rements. Restrict ions on Payments The regulatory capital requirements referred to above, and certain covenants contained in various agreements governing indebtedness of the Firm, may restrict the Firm’s ability to withdraw capital from its subsidiaries. The following table represents net assets of consolidated subsidiaries that may be restricted as to the payment of cash dividends and advances to the Parent Company. $ in millions At December 31, 2017 At December 31, 2016 Restricted net assets $ 29,894 $ 25,258 |
Total Equity
Total Equity | 12 Months Ended |
Dec. 31, 2017 | |
Total Equity | |
Total Equity | 15 . Total Equi ty Morg an Stanley Shareholders’ Equity Common Stock Rollforward of Common Stock Outstanding in millions 2017 2016 Shares outstanding at beginning of period 1,852 1,920 Treasury stock purchases 1 (92) (133) Other 2 28 65 Shares outstanding at end of period 1,788 1,852 1. The Firm’s Board has authorized the repurchase of the Firm’s outstanding stock under a share repurchase program (“Share Repurchase Program”). In addition to the Firm’s Share Repurchase Program, Treasury stock purchases include repurchases of common stock for employee tax withholding. 2. Other includes net shares issued to and forfeited from Employee stock trusts and issued for RSU conversions. Dividends and Share Repurchases $ in millions 2017 2016 Repurchases of common stock $ 3,750 $ 3,500 The Firm’s 2017 Capital Plan (“Capital Plan”) includes the share repurchase of up to $ 5.0 billion of outstanding common stock for the period beginning July 1, 2017 through June 30, 2018 , an increase from $ 3.5 billion in the 2016 Capital Plan. Additionally, the Capital Plan includes quarterly common stock dividends of up to $ 0.25 per share. Pursuant to the S hare R epurchase P rogram, the Firm considers, among other things, business segment capital needs , as well as stock-based compensation and benefit plan requirements. Share repurchases under the program will be exercised from time to time at prices the Firm deems appropriate subject to various factors, including the Firm’s 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 by the Firm are subject to regulatory approval. Employee Stock Trusts The Firm has established Employee stock trusts to provide common stock voting rights to certain employees who hold outstanding RSUs. The assets of the Employee stock trusts are consolidated with those of the Firm, and the value of the stock held in the Employee stock trusts is classified in Morgan Stanley shareholders’ equity and generally accounted for in a manner similar to treasury stock. Preferred Stock $ in millions 2017 2016 2015 Dividends declared $ 523 $ 468 $ 452 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 14 ). Preferred Stock Outstanding $ in millions, except per share data Shares Outstanding Carrying Value At Liquidation At At December 31, Preference December 31, December 31, 2017 per Share 2017 2016 Series 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 K 40,000 25,000 1,000 — Total $ 8,520 $ 7,520 1. Series C is composed 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. Preferred Stock Issuance Description Series Issuance Date Preferred Stock Issuance Description Redemption Price per Share 1 Redeemable on or after Date Dividend per Share 2 A 3 July 2006 44,000,000 Depositary Shares, each representing a 1/1,000th of a share of Floating Rate Non-Cumulative Preferred Stock, $0.01 par value $ 25,000 July 15, 2011 $ 255.56 C 3, 4 October 13, 2008 10% Perpetual Non-Cumulative Non-Voting Preferred Stock 1,100 October 15, 2011 25.00 E 5 September 30, 2013 34,500,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 October 15, 2023 445.31 F 5 December 10, 2013 34,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 January 15, 2024 429.69 G 5 April 29, 2014 20,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual 6.625% Non-Cumulative Preferred Stock, $0.01 par value 25,000 July 15, 2019 414.06 H 5, 6 April 29, 2014 1,300,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 July 15, 2019 681.25 I 5 September 18, 2014 40,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 October 15, 2024 398.44 J 5, 7 March 19, 2015 1,500,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 July 15, 2020 693.75 K 5, 8 January 2017 40,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, $0.01 par value 25,000 April 15, 2027 365.63 1. The redemption price per share for Series A, E, F, G, I and K is equivalent to $25.00 per Depositary Share. The redemption price per share for Series H and J is equivalent to $1,000 per Depositary Share. 2. Quarterly dividend s (unless noted otherwise) . 3. The preferred stock is redeemable at the Firm’s option, in whole or in part, on or after the redemption date. 4. Dividends on the Series C preferred stock are payable, on a non-cumulative basis, as and if declared by the Board, in cash, at the rate of 10% per annum of the liquidation preference of $1,000 per share. 5. The preferred stock is redeemable at the Firm’s option (i) in whole or in part, from time to time, on any dividend payment date on or after the redemption date or (ii) in whole but not in part at any time within 90 days following a regulatory capital treatment event (as described in the terms of that series). 6. Dividend on Series H preferred stock is payable semiannually until July 15, 2019 and quarterly thereafter. 7. Dividend on Serie s J preferred stock is payable semiannually until July 15, 2020 and quarterly thereafter. In addition to the redemption price per share, the redemption price includes any declared and unpaid dividends up to, but excluding, the date fixed for redemption, wi thout accumulation of any undeclared dividends . 8. The Series K Preferred Stock offering (net of related issuance costs) in January 2017 resulted in proceeds of approximately $994 million. Comprehensive Income (Loss) Accumulated Comprehensive Income (Loss) 1 $ in millions Foreign Currency Translation Adjustments AFS Securities Pensions, Postretirement and Other DVA Total December 31, 2014 $ (663) $ (73) $ (512) $ — $ (1,248) OCI during the period (300) (246) 138 — (408) December 31, 2015 (963) (319) (374) — (1,656) Cumulative adjustment for accounting change related to DVA 2 — — — (312) (312) OCI during the period (23) (269) (100) (283) (675) December 31, 2016 (986) (588) (474) (595) (2,643) OCI during the period 219 41 (117) (560) (417) December 31, 2017 $ (767) $ (547) $ (591) $ (1,155) $ (3,060) Amounts net of tax and noncontrolling interests. 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 unrealized DVA amount, net of noncontrolling interest s and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOCI. Period Changes in OCI Components 2017 $ in millions Pre-tax Gain (Loss) Income Tax Benefit (Provision) After-tax Gain (Loss) Non-controlling Interests Net Foreign currency translation adjustments OCI activity $ 64 $ 187 $ 251 $ 32 $ 219 Reclassified to earnings — — — — — Net OCI $ 64 $ 187 $ 251 $ 32 $ 219 Change in net unrealized gains (losses) on AFS securities OCI activity $ 100 $ (36) $ 64 $ — $ 64 Reclassified to earnings 1 (35) 12 (23) — (23) Net OCI $ 65 $ (24) $ 41 $ — $ 41 Pension, postretirement and other OCI activity $ (193) $ 75 $ (118) $ — $ (118) Reclassified to earnings 1 2 (1) 1 — 1 Net OCI $ (191) $ 74 $ (117) $ — $ (117) Change in net DVA OCI activity $ (922) $ 325 $ (597) $ (28) $ (569) Reclassified to earnings 1 12 (3) 9 — 9 Net OCI $ (910) $ 322 $ (588) $ (28) $ (560) 2016 2 $ in millions Pre-tax Gain (Loss) Income Tax Benefit (Provision) After-tax Gain (Loss) Non-controlling Interests Net Foreign currency translation adjustments OCI activity $ (24) $ 9 $ (15) $ 12 $ (27) Reclassified to earnings 4 — 4 — 4 Net OCI $ (20) $ 9 $ (11) $ 12 $ (23) Change in net unrealized gains (losses) on AFS securities OCI activity $ (313) $ 116 $ (197) $ — $ (197) Reclassified to earnings 1 (113) 41 (72) — (72) Net OCI $ (426) $ 157 $ (269) $ — $ (269) Pension, postretirement and other OCI activity $ (162) $ 64 $ (98) $ — $ (98) Reclassified to earnings 1 (3) 1 (2) — (2) Net OCI $ (165) $ 65 $ (100) $ — $ (100) Change in net DVA OCI activity $ (429) $ 153 $ (276) $ (13) $ (263) Reclassified to earnings 1 (31) 11 (20) — (20) Net OCI $ (460) $ 164 $ (296) $ (13) $ (283) 2015 $ in millions Pre-tax Gain (Loss) Income Tax Benefit (Provision) After-tax Gain (Loss) Non-controlling Interests Net Foreign currency translation adjustments OCI activity $ (119) $ (185) $ (304) $ (4) $ (300) Reclassified to earnings — — — — — Net OCI $ (119) $ (185) $ (304) $ (4) $ (300) Change in net unrealized gains (losses) on AFS securities OCI activity $ (305) $ 112 $ (193) $ — $ (193) Reclassified to earnings 1 (84) 31 (53) — (53) Net OCI $ (389) $ 143 $ (246) $ — $ (246) Pension, postretirement and other OCI activity $ 202 $ (70) $ 132 $ — $ 132 Reclassified to earnings 1 9 (3) 6 — 6 Net OCI $ 211 $ (73) $ 138 $ — $ 138 Amounts reclassified to earnings related to: realized gains and losses from sales of AFS securities are classified within Other revenues in the income statements; Pension, postretirement and other are classified within Compensation and benefits expenses in the income statements; and realization of DVA are classified within Trading revenues in the income statements . Exclusive of 2016 cumulative adjustment for accounting change related to DVA. Cumulative Foreign Currency Translation Adjustments Cumulative foreign currency translation adjustments include gains or losses resulting from translating foreign currency financial statements from their respective functional currencies to U.S. dollars, net of hedge gains or losses and related tax effects. The Firm uses foreign currency contracts to manage the currency exposure relating to its net investments in non-U.S. dollar functional currency subsidiaries. The Firm may elect not to hedge its net investments in certain foreign operations due to market conditions or other reas ons, including the availability of various currency contracts at acceptable costs. Information at December 31, 2017 and December 31, 2016 relating to the effects on cumulative foreign currency translation adjustments that resulted from the translation of f oreign currency financial statements and from gains and losses from hedges of the Firm’s net investments in non-U.S. dollar functional currency subsidiaries is summarized in the following table. Cumulative Foreign Currency Translation Adjustments At At December 31, December 31, $ in millions 2017 2016 Associated with net investments in subsidiaries with a non-U.S. dollar functional currency $ (1,434) $ (2,018) Hedges, net of tax 667 1,032 Total $ (767) $ (986) Carrying value of net investments in non-U.S. dollar functional currency subsidiaries subject to hedges $ 10,139 $ 8,856 |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 16 . Earnings per Common Shar e Calculation of Basic and Diluted EPS in millions, except for per share data 2017 2016 2015 Basic EPS Income from continuing operations $ 6,235 $ 6,122 $ 6,295 Income (loss) from discontinued operations (19) 1 (16) Net income 6,216 6,123 6,279 Net income applicable to noncontrolling interests 105 144 152 Net income applicable to Morgan Stanley 6,111 5,979 6,127 Less: Preferred stock dividends and other (523) (471) (456) Earnings applicable to Morgan Stanley common shareholders $ 5,588 $ 5,508 $ 5,671 Weighted average common shares outstanding 1,780 1,849 1,909 Earnings per basic common share Income from continuing operations $ 3.15 $ 2.98 $ 2.98 Income (loss) from discontinued operations (0.01) — (0.01) Earnings per basic common share $ 3.14 $ 2.98 $ 2.97 Diluted EPS Earnings applicable to Morgan Stanley common shareholders $ 5,588 $ 5,508 $ 5,671 Weighted average common shares outstanding 1,780 1,849 1,909 Effect of dilutive securities: Stock options and RSUs 1 41 38 44 Weighted average common shares outstanding and common stock equivalents 1,821 1,887 1,953 Earnings per diluted common share Income from continuing operations $ 3.08 $ 2.92 $ 2.91 Income (loss) from discontinued operations (0.01) — (0.01) Earnings per diluted common share $ 3.07 $ 2.92 $ 2.90 Weighted average antidilutive RSUs and stock options (excluded from the computation of diluted EPS) 1 — 13 12 1. 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. |
Interest Income and Interest Ex
Interest Income and Interest Expense | 12 Months Ended |
Dec. 31, 2017 | |
Interest Income and Interest Expense | |
Interest Income and Interest Expense | 17 . Inter est Income and Interest Expense Interest income and Interest expense are classified in the income statements based on the nature of the instrument and related market conventions. When 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. $ in millions 2017 2016 2015 Interest income Investment securities $ 1,334 $ 1,142 $ 876 Loans 3,298 2,724 2,163 Securities purchased under agreements to resell and Securities borrowed 1 169 (374) (560) Trading assets, net of Trading liabilities 2,029 2,131 2,262 Customer receivables and Other 2 2,167 1,393 1,094 Total interest income $ 8,997 $ 7,016 $ 5,835 Interest expense Deposits $ 187 $ 83 $ 78 Borrowings 4,285 3,606 3,497 Securities sold under agreements to repurchase and Securities loaned 3 1,237 977 1,024 Customer payables and Other 4 (12) (1,348) (1,857) Total interest expense $ 5,697 $ 3,318 $ 2,742 Net interest $ 3,300 $ 3,698 $ 3,093 1. Includes fees paid on Securities borrowed . 2 . Inclu des interest from Customer receivables, Restricted cash and Interest bearing deposits with banks . 3 . Includes fees received on Securities loaned. 4 . Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions. |
Deferred Compensation Plans
Deferred Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Compensation Arrangements [Abstract] | |
Deferred Compensation Plans | 18 . Deferred Compensation Plans T he Firm maintains various deferred stock-based and cash-based compensation plans for the benefit of certain current and former employees. Stock-Based Compensation Plans Stock-Based Compensation Expense $ in millions 2017 2016 2015 RSUs $ 951 $ 1,054 $ 1,080 Stock options — 2 (3) PSUs 75 81 26 Total 1 $ 1,026 $ 1,137 $ 1,103 Includes: Retirement eligible awards 2 $ 85 $ 73 $ 68 Net of cancellations. Relates to stock-based compensation anticipated to be awarded in January of the following year that do es not contain a future service requirement. Tax Benefit Related to Stock-Based Compensation Expense $ in millions 2017 2016 2015 Tax benefit 1 $ 225 $ 381 $ 369 1. Excludes income tax consequences related to employee share-based award conversions . Unrecognized Compensation Cost Related to Unvested Stock-Based Awards At December 31, $ in millions 2017 1 To be recognized in: 2018 $ 357 2019 158 Thereafter 27 Total $ 542 1. Amounts do not include forfeitures , cancellations , accelerations or 2017 performance year compensation award ed in January 2018, which will begin to be amortized in 2018 (see the Annual Compensation Cost for 2017 Performance Year Awards table herein). In connection with awards under its stock-based compensation plans, the Firm is authorized to issue shares of common stock held in treasury or newly issued shares . The Firm generally uses treasury shares, if available, to deliver shares to employees and has an ongoing repurchase authorization that includes repurchases in connection with awards under its stock-based compensation plans. Share repurchases by the Firm are subject to regulatory approval. Common Shares Available for Future Awards Under Stock-Based Compensation Plans At December 31, in millions 2017 Shares 146 See Note 15 for additi onal information on the Firm’s S hare R epurchase P rogram. R estricted Stock Unit s RSUs are generally subject to vesting over time, generally three years from the date of award , contingent upon continued employment and subject to restrictions on sale, transfer or assignment until conversion to common stock. All or a portion of an award may be cancel l ed if employment is terminated before the end of the relevant vesting period and after the relevant vesting period in certain situations. Recipients of RSUs may have voting rights, at the Firm’s discretion, and generally receive dividend equivalents if the awards vest . Vested and Unvested RSU Activity 2017 shares in millions Number of Shares Weighted Average Award Date Fair Value RSUs at beginning of period 100 $ 29.35 Awarded 22 42.98 Conversions to common stock (31) 30.03 Cancelled (3) 31.96 RSUs at end of period 1 88 $ 32.46 Aggregate intrinsic value of RSUs at end of period (dollars in millions) $ 4,633 Weighted average award date fair value RSUs awarded in 2016 $ 25.48 RSUs awarded in 2015 34.76 1. At December 31, 2017, the weighted average remaining term until delivery for the outstanding RSUs was approximately 1.1 years . Unvested RSU Activity 2017 shares in millions Number of Shares Weighted Average Award Date Fair Value Unvested RSUs at beginning of period 65 $ 28.70 Awarded 22 42.98 Vested (34) 30.46 Cancelled (3) 31.96 Unvested RSUs at end of period 1 50 $ 33.64 1. Unvested RSUs represent awards where recipients have yet to satisfy either the explicit vesting terms or retirement-eligible requirements. Fair Value of RSU Activity $ in millions 2017 2016 2015 Conversions to common stock $ 1,333 $ 1,068 $ 1,646 Vested 1,470 1,088 1,693 Stock Options The Firm had no stock options outstanding as of December 31, 2017, and did not grant stock options in 2017, 2016 or 2015. P erformance-based Stock Unit s PSUs will vest and convert to shares of common stock only if the Firm satisfies predetermined performance and market-based conditions over a three-year performance period. The number of PSUs that will actually vest ranges from 0 % to 150 % of the target award , based on the extent to which the Firm achieves the specified performance goals. One-half of the award will be earned based on the Firm’s average return on equity, excluding cer tain adjustments specified in the plan terms (“MS Adjusted ROE”). The other half of the award will be earned based on the Firm’s total shareholder return, relative to the total shareholder return of the S&P 500 Financials Sector Index (“Relative MS TSR”). PSUs have vesting, restriction and cancellation provisions that are generally similar to those of RSUs. PSU Fair Value on Award Date 2017 2016 2015 MS Adjusted ROE $ 42.64 $ 25.19 $ 34.58 Relative MS TSR 48.02 24.51 38.07 The Relative MS TSR fair values on the award date were estimated using a Monte Carlo simulation and the following assumptions. Monte Carlo Simulation Assumptions Award Year Risk-Free Interest Rate Expected Stock Price Volatility Expected Dividend Yield 2017 1.5% 27.0% 0.0% 2016 1.1% 25.4% 0.0% 2015 0.9% 29.6% 0.0% The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined using historical volatility. The expected dividend yield is equivalent to reinvesting dividends . A correlation coefficient was developed based on historic al price data of the Firm and the S&P 500 Financial s Sector Index. PSU Activity 2017 shares in millions Number of Shares PSUs at beginning of period 4 Awarded 1 Conversions to common stock (2) PSUs at end of period 3 Deferred Cash-Based Compensation Plans Deferred cash-based compensation plans generally provide a return to the plan participants based upon the performance of various referenced investments. Deferred Cash-Based Compensation Expense $ in millions 2017 2016 2015 Deferred cash-based awards $ 1,039 $ 950 $ 660 Return on referenced investments 696 228 112 Total 1 $ 1,735 $ 1,178 $ 772 Includes: Retirement-eligible awards 2 $ 176 $ 151 $ 144 1. Net of cancellations. 2. Relates to deferred cash-based compensation anticipated to be awarded in January of the following year that do es not contain a future service requirement. Unrecognized Compensation Cost Related to Unvested Deferred Cash-Based Awards At December 31, $ in millions 2017 1 To be recognized in : 2018 $ 375 2019 125 Thereafter 195 Total $ 695 Amounts do not include unrecognized expense for returns on referenced investments, forfeitures, cancellations, accelerations or 2017 performance year compensation awarded in January 2018 which will begin to be amortized in 2018 (see below). Annual Compensation Cost for 2017 Performance Year Awards 1 $ in millions 2018 2019 Thereafter Total Stock-based awards $ 519 $ 198 $ 165 $ 882 Deferred cash-based awards 616 290 121 1,027 Total $ 1,135 $ 488 $ 286 $ 1,909 1. Awarded in January 2018 and contain a future service requirement. Amounts do not include forfeitures, cancellations, accelerations, or any future return on referenced investments . |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Employee Benefit Plans | 19 . Employee Benefit Plans Pension and Other Postretirement Plans Certain U.S. employees of the Firm and its U.S. affiliates who were hired before July 1, 2007 are covered by the U.S. pension plan, a non-contributory, defined benefit pension plan that is qualified under Section 401(a) of the Internal Revenue Code ( “U.S. Qualified Plan”). The U.S. Qualified Plan has ceased future benefit accruals. Unfunded supplementary plans ( “Supplemental Plans”) cover certain executives. Liabiliti es for benefits payable under the Supplemental Plans are accrued by the Firm and are funded when paid. The Morgan Stanley Supplemental Executive Retirement and Excess Plan ( “SEREP”), a non-contributory defined benefit plan that is not qualified under S ection 401(a) of the Internal Revenue Code, has ceased future benefit accruals. Certain of the Firm’s non-U.S. subsidiaries also have defined benefit pension plans covering their eligible employees. The Firm’s pension plans generally provide pension be nefits that are based on each employee’s years of credited service and on compensation levels specified in the plans. The Firm has an unfunded postretirement benefit plan that provides medical and life insurance for eligible U.S. retirees and medical ins urance for their dependents. Components of Net Periodic Benefit Expense (Income) Pension Plans $ in millions 2017 2016 2015 Service cost, benefits earned during the period $ 16 $ 17 $ 19 Interest cost on projected benefit obligation 146 150 152 Expected return on plan assets (117) (122) (120) Net amortization of prior service credit — — (1) Net amortization of actuarial loss 17 12 26 Settlement loss — — 2 Net periodic benefit expense (income) $ 62 $ 57 $ 78 Other Postretirement Plan $ in millions 2017 2016 2015 Service cost, benefits earned during the period $ 1 $ 1 $ 1 Interest cost on projected benefit obligation 3 4 3 Net amortization of prior service credit (16) (17) (18) Net periodic benefit expense (income) $ (12) $ (12) $ (14) Pre-tax Amounts Recognized in OCI Pension Plans $ in millions 2017 2016 2015 Net gain (loss) $ (205) $ (149) $ 212 Prior service credit (cost) 2 1 1 Amortization of prior service credit — — (1) Amortization of net loss 17 12 28 Total $ (186) $ (136) $ 240 Other Postretirement Plan $ in millions 2017 2016 2015 Net gain (loss) $ — $ (2) $ (3) Prior service credit (cost) — — (9) Amortization of prior service credit (16) (17) (18) Total $ (16) $ (19) $ (30) The Firm generally amortizes into net periodic benefit expense (income) the unrecognized net gains and losses exceeding 10% of the greater of the projected benefit obligation or the market-related value of plan assets. The U.S. Qualified Plan and the SEREP amortize the unrecognized net gains and losses over the average life expectancy of participants. The remaining plans generally amortiz e the unrecognized net gains and losses and prior service credit over the average remaining service period of activ e participants. Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense (Income) Pension Plans 2017 2016 2015 Discount rate 4.01% 4.27% 3.86% Expected long-term rate of return on plan assets 3.52% 3.61% 3.59% Rate of future compensation increases 3.10% 3.19% 2.85% Other Postretirement Plan 2017 2016 2015 Discount rate 4.01% 4.13% 3.77% The accounting for pension and postretirement plans involves certain assumptions and estimates. The expected long-term rate of return on plan assets is an assumption that generally is expected to remain the same from one year to the next unless there is a significant change in the target asset allocation, the fees and expenses paid by the plan or market conditions. The expected long-te rm rate of return for the U.S. Qualified Plan was estimated by computing a weighted average of the underlying long-term expected returns based on the investment managers’ target allocations. The U.S. Qualified Plan is primarily invested in fixed income sec urities and related derivative instruments, including interest rate swap contracts. This asset allocation is expected to help protect the plan’s funded status and limit volatility of the Firm’s contributions. Total U.S. Qualified Plan investment portfolio performance is assessed by comparing actual investment performance to changes in the estimated present value of the U.S. Qualified Plan’s benefit obligation. Benefit Obligation and Funded Status Rollforward of the Benefit Obligation and Fair Value of Plan Assets Pension Plans Other Postretirement Plan $ in millions 2017 2016 2017 2016 Rollforward of benefit obligation Benefit obligation at beginning of year $ 3,711 $ 3,604 $ 88 $ 87 Service cost 16 17 1 1 Interest cost 146 150 3 4 Actuarial loss (gain) 1 304 223 — 1 Plan amendments (2) (1) — — Plan settlements (9) (19) — — Benefits paid (242) (219) (6) (5) Other, including foreign currency exchange rate changes 42 (44) — — Benefit obligation at end of year $ 3,966 $ 3,711 $ 86 $ 88 Rollforward of fair value of plan assets Fair value of plan assets at beginning of year $ 3,431 $ 3,497 $ — $ — Actual return on plan assets 217 196 — — Employer contributions 32 38 6 5 Benefits paid (242) (219) (6) (5) Plan settlements (9) (19) — — Other, including foreign currency exchange rate changes 39 (62) — — Fair value of plan assets at end of year $ 3,468 $ 3,431 $ — $ — Funded (unfunded) status $ (498) $ (280) $ (86) $ (88) Amounts recognized in the balance sheets Assets $ 87 $ 230 $ — $ — Liabilities (585) (510) (86) (88) Net amount recognized $ (498) $ (280) $ (86) $ (88) 1. Amounts primarily reflect the impact of year-over-year discount rate fluctuations. Amounts Recognized in AOCI Pension Plans Other Postretirement Plan At At At At $ in millions December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Prior service credit (cost) $ 4 $ 2 $ 1 $ 17 Net gain (loss) (951) (763) — — Net gain (loss) recognized $ (947) $ (761) $ 1 $ 17 Estimated Amortization from AOCI into Net Periodic Benefit Expense (Income) in 2018 $ in millions Pension Plans Other Postretirement Plan Prior service credit (cost) $ 1 $ 1 Net gain (loss) (27) — Pension Plans with Benefit Obligations in Excess of the Fair Value of Plan Assets At At $ in millions December 31, 2017 December 31, 2016 Projected benefit obligation $ 3,676 $ 566 Accumulated benefit obligation 3,663 552 Fair value of plan assets 3,091 56 Accumulated Benefit Obligation At At December 31, December 31, $ in millions 2017 2016 Pension plans $ 3,953 $ 3,696 Weighted Average Assumptions Used to Determine Benefit Obligation Pension Plans Other Postretirement Plan At At At At December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Discount rate 3.46% 4.01% 3.44% 4.01% Rate of future compensation increase 3.38% 3.10% N/A N/A The discount rates used to determine the benefit obligation for the U. S. pension and postretirement plans were selected by the Firm, in consultation with its independent actuaries, using a pension discount yield curve based on the characteristics of the plans, each determined independently. The pension discount yield curve represents spot discount yields base d on duration implicit in a representative broad-based Aa- rated corporate bond universe of high-quality fixed income investments. For all non-U.S. pension plans, the Firm set the assumed discount rates based on the nature of liabilities, local economic env ironments and available bond indices. Assumed Health Care Cost Trend Rates Used to Determine the U.S. Postretirement Benefit Obligation At At December 31, 2017 December 31, 2016 Health care cost trend rate assumed for next year Medical 5.81% 5.96% Prescription 8.49% 9.32% Rate to which the cost trend rate is assumed to decline (ultimate trend rate) 4.50% 4.50% Year that the rate reaches the ultimate trend rate 2038 2038 Plan Assets The U.S. Qualified Plan’s assets represent 87 % of the Firm’s total pension plan assets. The U.S. Qualified Plan uses a combination of active and risk-controlled fixed income investment strategies. The fixed income asset allocation consists primarily of fixed income securities and related derivative instruments designed to approximate the expected cash flows of the plan’s liabilities in order to help reduce plan exposure to interest rate variation and to better align assets with the obligation. The longer-duration fixed income allocation is expected to help protect the plan’s funded status and maintain the stability of plan contributions over the long run. Derivative instruments are permitted in the U.S. Qualified Plan’s investment portfolio only to the extent that they comply with all of the plan’s investment policy guidelines and are consistent with the plan’s risk and return objectives. In addition, any investment in derivatives must meet the following conditions: M ay be used only if derivative instruments are deemed by the investment manager to be more attractive than a similar direct investment in the underlying cash market or if the vehicle is being used to manage risk of the portfolio. M ay not be used in a speculative man ner or to leverage the portfolio under any circumstances. M ay not be used as short-term trading vehicles. The investment philosophy of the U.S. Qualified Plan is that investment activity is undertaken for long-term investment rather than short-term tradi ng. M ay be used in the management of the U.S. Qualified Plan’s portfolio only when the derivative instruments’ possible effects can be quantified, shown to enhance the risk-return profile of the portfolio, and reported in a meaningful and understandable manner. As a fundamental operating principle, any restrictions on the underlying assets apply to a respective derivative product. This includes percentage allocations and credit quality. Derivatives are used solely for the purpose of enhancing investmen t in the underlying assets and not to circumvent portfolio restrictions. Plan assets are measured at fair value using valuation techniques that are consistent with the valuation techniques applied to the Firm’s major categories of ass ets and liabilities as described in Notes 2 and 3 . OTC derivative contracts consist of investments in interest rate swaps. Other investments consist of pledged insurance annuity contracts held by non-U.S.-based plans. The pledged insurance annuit y contracts are valued based on the premium reserve of the insurer for a guarantee that the insurer has given to the employee benefit plan that approximates fair value. The pledged insurance annuity contracts are categorized in Level 3 of the fair value hi erarchy. Commingled trust funds are privately offered funds that are regulated, supervised and subject to periodic examination by a U.S. federal or state agency and available to institutional clients. The trust must be maintained for the collective inves tment or reinvestment of assets contributed to it from U.S. tax-qualified employee benefit plans maintained by more than one employer or controlled group of corporations. The sponsor of the commingled trust funds values the funds based on the fair value of the underlying securities. The underlying securities of the commingled trust funds held by the U.S. Qualified Plan consist mainly of long-duration fixed income instruments. Commingled trust funds are redeemable at NAV at the measurement date or in the nea r future. Some non-U.S.-based plans hold foreign funds that consist of investments in fixed income funds, target cash flow funds and liquidity funds. Fixed income funds invest in individual securities quoted on a recognized stock exchange or traded in a regulated market. Certain fixed income funds aim to produce returns consistent with certain Financial Times Stock Exchange indexes. Target cash flow funds are designed to provide a series of fixed annual cash flows achieved by investing in government bond s and derivatives. Liquidity funds place a high priority on capital preservation, stable value and a high liquidity of assets. Foreign funds are readily redeemable at NAV. The Firm generally considers the NAV of commingled trust funds and foreign funds provided by the fund manager to be the best estimate of fair value. Fair Value of Plan Assets and Liabilities At December 31, 2017 $ in millions Level 1 Level 2 Level 3 Total Assets Investments: Cash and cash equivalents 1 $ 6 $ — $ — $ 6 U.S. government and agency securities: U.S. Treasury securities 2,398 — — 2,398 U.S. agency securities — 318 — 318 Total U.S. government and agency securities 2,398 318 — 2,716 Corporate and other debt: CDO — 14 — 14 Total corporate and other debt — 14 — 14 Derivative contracts 2 — 1 — 1 Other investments — — 47 47 Other receivables 1 26 — — 26 Total assets 3 $ 2,430 $ 333 $ 47 $ 2,810 Liabilities Derivative contracts 2 $ — $ 2 $ — $ 2 Other payables 1 11 — — 11 Total liabilities $ 11 $ 2 $ — $ 13 At December 31, 2016 $ in millions Level 1 Level 2 Level 3 Total Assets Investments: Cash and cash equivalents 1 $ 55 $ — $ — $ 55 U.S. government and agency securities: U.S. Treasury securities 1,493 — — 1,493 U.S. agency securities — 423 — 423 Total U.S. government and agency securities 1,493 423 — 1,916 Corporate and other debt: CDO — 13 — 13 Total corporate and other debt — 13 — 13 Derivative contracts — 159 — 159 Derivative-related cash collateral receivable — 76 — 76 Other investments — — 38 38 Total assets 3 $ 1,548 $ 671 $ 38 $ 2,257 Liabilities Derivative contracts $ — $ 225 $ — $ 225 Total liabilities $ — $ 225 $ — $ 225 1. Cash and cash equivalents , other receivables and other payables are valued at their carrying value, which approximates fair value. 2. During 2017, the Chicago Mercantile Exchange amended its rulebook for cleared OTC derivatives, resulting in the characterization o f variation margin transfers as settlement payments as opposed to cash posted as collateral. 3. Amounts exclude certain investments that are measured at fair value using the NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “Fair Value of Plan Assets Measured at NAV ” herein. Rollforward of Level 3 Plan Assets $ in millions 2017 2016 Balance at beginning of period $ 38 $ 35 Actual return on plan assets related to assets held at end of period 1 — Purchases, sales, other settlements and issuances, net 8 3 Balance at end of period $ 47 $ 38 There were no transfers between levels during 2017 and 2016 . Fair Value of Plan Assets Measured at NAV At December 31, At December 31, $ in millions 2017 2016 Commingled trust funds Fixed income $ — $ 999 Money market 285 86 Foreign funds Fixed income 126 111 Liquidity 41 9 Targeted cash flow 219 194 Total $ 671 $ 1,399 Expected Contributions The Firm’s policy is to fund at least the amount sufficient to meet minimum funding requirements under applicable employee benefit and tax laws. At December 31, 2017 , the Firm expected to contribute approximately $ 50 million to its pension and postretirement benefit plans in 2018 based upon the plans’ current funded status and expected asset return assumptions for 2018. Expected Future Benefit Payments At December 31, 2017 $ in millions Pension Plans Other Postretirement Plan 2018 $ 140 $ 7 2019 142 7 2020 148 7 2021 156 7 2022 166 7 2023-2027 922 31 Morgan Stanley 401(k) Plan U.S. employees meeting certain eligibility requirements may participate in the Morgan Stanley 401(k) Plan. Eligible employees receive discretionary 401(k) matching cash contributions as determined annually by the Firm. For 2017 , 2016 and 2015, the Firm made a $1 for $1 Firm match up to 4 % of eligible pay , up to the IRS limit . Matching contributions were invested among available funds according to each participant’s investment direction on file . Eligible employees with eligible pay less tha n or equal to $100,000 also received a fixed contribution under the 401(k) Plan equal to 2 % of eligible pay. Transition contributions are allocated to certain eligible employees. The Firm match, fixed contribution and transition contribution are includ ed i n the Firm’s 401(k) expense. 401(k) Expense $ in millions 2017 2016 2015 Expense $ 258 $ 250 $ 255 Defined Contribution Pension Plans The Firm maintains separate defined contribution pension plans that cover eligible employees of certain non-U.S. subsidiaries. Under such plans, benefits are generally determined based on a fixed rate of base salary with certain vesting requirements. Defined Contribution Pension Expense $ in millions 2017 2016 2015 Expense $ 106 $ 101 $ 111 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | 20 . Income Taxes Provision for (Be nefit from) Income Taxes Components of Provision for (Benefit from) Income Taxes $ in millions 2017 2016 2015 Current U.S.: Federal $ 476 $ 330 $ 239 State and local 125 221 144 Non-U.S.: U.K. 401 196 247 Japan 56 28 19 Hong Kong 48 14 24 Other 308 359 333 Total $ 1,414 $ 1,148 $ 1,006 Deferred U.S.: Federal $ 2,656 $ 1,336 $ 1,031 State and local 84 74 43 Non-U.S.: U.K. 18 56 (56) Japan (17) 127 58 Hong Kong (2) 31 50 Other 15 (46) 68 Total $ 2,754 $ 1,578 $ 1,194 Provision for income taxes from continuing operations $ 4,168 $ 2,726 $ 2,200 Provision for (benefit from) income taxes from discontinued operations $ (7) $ 1 $ (7) Selected Other Non-U.S. Tax Provisions $ in millions Tax Provisions 2017: Brazil $ 82 India 49 Canada 36 2016: Brazil 125 India 46 France 38 2015: Mexico 68 Brazil 62 Netherlands 58 India 45 France 42 Net Income Tax Provision (Benefit) Accrued in Additional Paid-in Capital Related to Employee Share-Based Compensation $ in millions 2017 2016 2015 Additional paid-in capital 1 $ — $ 24 $ (203) Beginning in 2017, the income tax consequences related to employee share-based awards are required to be recognized in Provision for income taxes in the income statements upon the conversion of employee share-based awards instead of additional paid-in capital. See Note 2 to the financial statements for information on the adoption of the accounting update Improvements to Employee Share-Based Payment Accounting. See Note 21 for more information on the net discrete tax provisions (benefits). Effective Income Tax Rate Reconciliation of the U.S. Federal Statutory Income Tax Rate to the Effective Income Tax Rate 2017 2016 2015 U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % U.S. state and local income taxes, net of U.S. federal income tax benefits 1.4 2.2 1.4 Domestic tax credits (1.6) (2.5) (1.5) Tax exempt income (0.1) (0.1) (0.2) Non-U.S. earnings Foreign tax rate differential (5.0) (3.1) (8.7) Change in reinvestment assertion — — 0.2 Change in foreign tax rates — 0.1 — Tax Act enactment 11.5 — — Employee share-based awards (1.5) — — Other 0.4 (0.8) (0.3) Effective income tax rate 40.1 % 30.8 % 25.9 % The Firm’s effective tax rate from continuing operations for 2017 included an intermittent net discrete tax provision of $ 968 million, which included approximately $1.2 billion primarily related to the remeasurement of certain net deferred tax assets as a result of the T ax Act, partially offset by $ 233 million of net discrete tax benefit s primarily associated with the remeasurement of reserves and related interest due to new information regarding the st atus of multi-year IRS tax examinations. The Tax Act, enacted o n December 22, 2017, significantly revised U.S. corporate income tax law by, among other things, reducing the corporate income tax rate to 21 %, implementing a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries; imposes a minimum t ax on GILTI and an alternative base erosion and anti-abuse tax (“BEAT”) on U.S. corporations th at make deductible payments to n on-U.S. relate d persons in excess of specified amounts; and broadens the tax base by partially or wholly eliminating tax deductions for certain historically deductible expenses (e.g., FDIC premiums and executive compensation). T he Firm’s effective tax rate from continu ing operations for 2016 included intermittent net discrete tax benefits of $ 68 million. These net discrete tax benefits were primarily related to the remeasurement of reserves and related interest due to new information regarding the status of multi-year I RS tax examinations , partially offset by adjustments for other tax matters . The Firm’s effective tax rate from continuing operations for 2015 included intermittent net discrete tax benefits of $ 564 million. These net discrete tax benefits were primaril y 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. Deferred Tax Assets and Liabilities Deferred income taxes ref lect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Deferred Tax Assets and Liabilities At At December 31, December 31, $ in millions 2017 2016 Gross deferred tax assets Tax credits and net operating loss carryforwards $ 391 $ 731 Employee compensation and benefit plans 2,146 3,504 Valuation and liability allowances 377 656 Valuation of inventory, investments and receivables 645 1,062 Other — 21 Total deferred tax assets 3,559 5,974 Deferred tax assets valuation allowance 144 164 Deferred tax assets after valuation allowance $ 3,415 $ 5,810 Gross deferred tax liabilities Non-U.S. operations $ 20 $ 270 Fixed assets 627 773 Other 194 — Total deferred tax liabilities $ 841 $ 1,043 Net deferred tax assets $ 2,574 $ 4,767 The Firm had tax credit carryforwards for which a related deferred tax asset of $ 114 million and $ 465 million was recorded at December 31, 2017 and December 31, 2016, respectively. These carryforwards are subject to annual limitations on utilization, with the earli est expiration beginning in 2037 , if not utilized. The Firm believes the recognized net deferred tax assets (after valuation allowance) at December 31, 201 7 are more likely than not to be realized based on expectations as to future taxable incom e in the jurisdictions in which it operates. The earnings of certain foreign subsidiaries are indefinitely reinvested due to regulatory and other capital requirements in foreign jurisdictions. As a result of the Tax Act’s one-time transition tax on the earnings of foreign subsidiaries, as of December 31, 2017 the Firm expects the unrecognized deferred tax liability attributable to indefinitely reinvested earnings to be immaterial. Unrecognized Tax Benefits Rollforward of Unrecognized Tax Benefits $ in millions 2017 2016 2015 Balance at beginning of period $ 1,851 $ 1,804 $ 2,228 Increase based on tax positions related to the current period 63 172 230 Increase based on tax positions related to prior periods 170 14 114 Decrease based on tax positions related to prior periods (312) (134) (753) Decreases related to settlements with taxing authorities (155) — (7) Decreases related to lapse of statute of limitations (23) (5) (8) Balance at end of period $ 1,594 $ 1,851 $ 1,804 Net unrecognized tax benefits 1 $ 873 $ 1,110 $ 1,144 Represent ending unrecognized tax benefits adjusted for the impact of the federal benefit of state issues, competent authority and foreign tax credit offsets. If recognized, these net benefits would favorably impact the effective tax rate in future pe riods. Interest Expense (Benefit), Net of Federal and State Income Tax Benefits $ in millions 2017 2016 2015 Recognized in income statements $ (3) $ 28 $ 18 Accrued at end of period 147 150 122 Interest and penalties related to unrecognized tax benefits are classified as provision for income taxes. Penalties related to unrecognized tax benefits f or the years mentioned above were immaterial. Tax Authority Examinations The Firm is under continuous examination by the IRS and other tax authorities in certain countries, such as Japan and the U.K., and in states in which it has significant business operations, such as New York. The Firm has established a liability for unrecognized tax benefits, and associated interest, if applicable (“tax liabilities”), that it believes is adequate in relation to the potential for additional assessments. Once established, the Firm adjusts such tax liabilities only when new information is available or when an event occurs necessitating a change. 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 an d 2007-2014, respectively. During the fourth quarter of 2017, the Firm agreed to proposed adjustments associated with the expected closure of the field audits for tax years 2006-2008. The Firm believes that the resolution of the above tax matters will no t have a material effect on the annual financial statements, although a resolutio n could have a material impact i n the income statements and effective tax rate for any period in which such resolution occurs. Additionally, during the fourth quarter of 2017 , the Firm received new information relating to the expected closure of the IRS field audits for tax years 2009-2012 resulting in a remeasurement and an overall net decrease in the Firm’s recorded tax liabilities. Also, during the fourth quarter of 2017, t he Firm reached agreement with the IRS on resolution of claims filed with the IRS to contest certain items associated with tax years 1999-2005 , which did not have a material impact on the annual statements or effective tax rate. Furthermore, during the fo urth quarter of 2017, the Firm reached a conclusion with the U.K. tax authorities on certain issues through tax year 2010, the resolution of which did not have a material impact on the annual financial statements or effective tax rate. See Note 12 regard ing the Dutch Tax Authority’s challenge, in the District Court in Amsterdam (matters styled Case number 15/3637 and Case number 15/4353 ), of the Firm’s entitlement to certain withholding tax credits which may impact the balance of unrecognized tax benefits . It is reasonably possible that significant changes in the balance of unrecognized tax benefits occur within the next 12 months. 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. Earliest Tax Year Subject to Examination in Major Tax Jurisdictions Jurisdiction Tax Year U.S. 1999 New York State and New York City 2007 Hong Kong 2011 U.K. 2010 Japan 2015 Income from Continuing Operations Before Income Tax Expense (Benefit) $ in millions 2017 2016 2015 U.S. $ 5,686 $ 5,694 $ 5,360 Non-U.S. 1 4,717 3,154 3,135 Total $ 10,403 $ 8,848 $ 8,495 1. Non-U.S. income is defined as income generated from operations located outside the U.S. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment And Geographic Information | 21 . S egment and Geographic Information Segment Information The Firm structures its segments primarily based upon the nature of the financial products and services provided to customers and its management organization. The Firm provides a wide range of financial products and services to its customers in each of the business segments: Institutional Securities, Wealth Management and Investment Management. For a further discussion of the business segments, see Note 1 . Reve nues and expenses directly associated with each respective business segment are included in determining its operating results. Other revenues and expenses that are not directly attributable to a particular business segment are allocated based upon the Firm ’s allocation methodologies, generally based on each business segment’s respective net revenues, non-interest expenses or other relevant measures. As a result of revenues and expenses from transactions with other operating segments being treated as tran sactions with external parties, the Firm includes an Intersegment Eliminations category to reconcile the business segment results to the consolidated results . Selected Financial Information by Business Segment 2017 $ in millions IS WM IM 1, 2 I/E Total Total non-interest revenues $ 19,622 $ 12,731 $ 2,586 $ (294) $ 34,645 Interest income 5,377 4,591 4 (975) 8,997 Interest expense 6,186 486 4 (979) 5,697 Net interest (809) 4,105 — 4 3,300 Net revenues $ 18,813 $ 16,836 $ 2,586 $ (290) $ 37,945 Income from continuing operations before income taxes $ 5,644 $ 4,299 $ 456 $ 4 $ 10,403 Provision for income taxes 3 1,993 1,974 201 — 4,168 Income from continuing operations 3,651 2,325 255 4 6,235 Income (loss) from discontinued operations, net of income taxes (19) — — — (19) Net income 3,632 2,325 255 4 6,216 Net income applicable to noncontrolling interests 96 — 9 — 105 Net income applicable to Morgan Stanley $ 3,536 $ 2,325 $ 246 $ 4 $ 6,111 2016 $ in millions IS 4 WM 4 IM 1, 2 I/E Total Total non-interest revenues $ 17,294 $ 11,821 $ 2,108 $ (290) $ 30,933 Interest income 4,005 3,888 5 (882) 7,016 Interest expense 3,840 359 1 (882) 3,318 Net interest 165 3,529 4 — 3,698 Net revenues $ 17,459 $ 15,350 $ 2,112 $ (290) $ 34,631 Income from continuing operations before income taxes $ 5,123 $ 3,437 $ 287 $ 1 $ 8,848 Provision for income taxes 3 1,318 1,333 75 — 2,726 Income from continuing operations 3,805 2,104 212 1 6,122 Income (loss) from discontinued operations, net of income taxes (1) — 2 — 1 Net income 3,804 2,104 214 1 6,123 Net income (loss) applicable to noncontrolling interests 155 — (11) — 144 Net income applicable to Morgan Stanley $ 3,649 $ 2,104 $ 225 $ 1 $ 5,979 2015 $ in millions IS 4 WM 4 IM 1 I/E Total Total non-interest revenues $ 17,800 $ 12,144 $ 2,331 $ (213) $ 32,062 Interest income 3,190 3,105 2 (462) 5,835 Interest expense 3,037 149 18 (462) 2,742 Net interest 153 2,956 (16) — 3,093 Net revenues $ 17,953 $ 15,100 $ 2,315 $ (213) $ 35,155 Income from continuing operations before income taxes $ 4,671 $ 3,332 $ 492 $ — $ 8,495 Provision for income taxes 3 825 1,247 128 — 2,200 Income from continuing operations 3,846 2,085 364 — 6,295 Income (loss) from discontinued operations, net of income taxes (17) — 1 — (16) Net income 3,829 2,085 365 — 6,279 Net income applicable to noncontrolling interests 133 — 19 — 152 Net income applicable to Morgan Stanley $ 3,696 $ 2,085 $ 346 $ — $ 6,127 I/E – Intersegment Eliminations For information on fee waivers see the table below. For information on net unrealized performance-based fees see the table below. The Firm’s effective tax rate from continuing operations included net discrete tax provisions (benefits). See table below for further information. Effective July 1, 2016, the Institutional Securities and Wealth Management business segments entered into an agreement, whereby Institutional Securities assumed management of Wealth Management’s fixed i ncome client-driven trading activities and employees. Institutional Securities now pays fees to Wealth Management based on distribution activity (collectively, the “Fixed Income Integration”). Prior periods have not been recast for this new intersegment ag reement due to immateriality . The Firm waives a portion of its fees in the Investment Management business segment from certain registered money market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940. Reduction of Fees due to Fee Waivers $ in millions 2017 2016 2015 Fee waivers $ 86 $ 91 $ 197 For certain management fee arrangements in the Investment Management business segment , 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 o f net unrealized cumulative performance-based fees (for which the Firm is not obligated to pay compensation) are at risk of reversing if the fund performance falls below the stated investment management agreement benchmarks. See Note 12 for information regarding general partner guarantees, which include potential obligations to return performance fee di stributions previously received. Net Unrealized Performance-based Fees At At $ in millions December 31, 2017 December 31, 2016 Net cumulative unrealized performance-based fees at risk of reversing $ 442 $ 397 Net Discrete Tax Provision (Benefit) by Segment 2017 $ in millions IS WM IM Total Intermittent: Tax Act enactment 1 $ 705 $ 402 $ 94 $ 1,201 Remeasurement of reserves and related interest (168) — — (168) Other (66) 9 (8) (65) Total intermittent net discrete tax provision (benefit) $ 471 $ 411 $ 86 $ 968 Recurring: Employee share-based awards (93) (54) (8) (155) Total $ 378 $ 357 $ 78 $ 813 2016 2 $ (68) 2015 2 (564) For further discussion on the Tax Act, see Note 20 . The intermittent net discrete tax benefits for 2016 and 2015 were primarily within the Institutional Securities business segment. Total Assets by Business Segment At December 31, At December 31, $ in millions 2017 2016 Institutional Securities $ 664,974 $ 629,149 Wealth Management 182,009 181,135 Investment Management 4,750 4,665 Total 1 $ 851,733 $ 814,949 Parent assets have been fully allocated to the business segments. Geographic Information The Firm operates in both U.S. and non-U.S. markets. The Firm’s non-U.S. business activities are principally conducted and managed through EMEA and Asia locations. The net revenues disclosed in the following table reflect the regional view of the Firm’s consolidated net revenues on a managed basis, based on the following methodology: Institutional Securities: advisory and equity underwriting—client location, debt underwriting—revenue recording location, sales and trading— trading desk location. Wealth Management: Wealth Management representatives operate in the Americas. Investment Management: client location, except certain closed-end funds, which are based on asset location . Net Revenues by Region $ in millions 2017 2016 2015 Americas $ 27,817 $ 25,487 $ 25,080 EMEA 5,714 4,994 5,353 Asia 4,414 4,150 4,722 Net revenues $ 37,945 $ 34,631 $ 35,155 Total Assets by Region At December 31, At December 31, $ in millions 2017 2016 Americas $ 570,489 $ 581,750 EMEA 191,398 158,819 Asia 89,846 74,380 Total $ 851,733 $ 814,949 |
Parent Company
Parent Company | 12 Months Ended |
Dec. 31, 2017 | |
Parent Company | |
Parent Company | 22 . Parent Company Parent Company Only —Condensed Income Statements and Comprehensive Income Statements $ in millions 2017 2016 2015 Revenues Dividends from non-bank subsidiaries $ 2,567 $ 2,448 $ 4,942 Trading (260) 96 574 Other 64 38 53 Total non-interest revenues 2,371 2,582 5,569 Interest income 3,783 3,008 3,055 Interest expense 4,079 4,036 4,073 Net interest (296) (1,028) (1,018) Net revenues 2,075 1,554 4,551 Non-interest expenses 240 126 (195) Income before income taxes 1,835 1,428 4,746 Provision for (benefit from) income taxes (206) (383) (83) Net income before undistributed gain of subsidiaries 2,041 1,811 4,829 Undistributed gain of subsidiaries 4,070 4,168 1,298 Net income 6,111 5,979 6,127 OCI, net of tax: Foreign currency translation adjustments 219 (23) (300) Change in net unrealized gains (losses) on AFS securities 41 (269) (246) Pensions, postretirement and other (117) (100) 138 Change in net DVA (560) (283) — Comprehensive income $ 5,694 $ 5,304 $ 5,719 Net income $ 6,111 $ 5,979 $ 6,127 Preferred stock dividends and other 523 471 456 Earnings applicable to Morgan Stanley common shareholders $ 5,588 $ 5,508 $ 5,671 Parent Company Only—Condensed Balance Sheets At December 31, At December 31, $ in millions, except share data 2017 2016 Assets Cash and cash equivalents: Cash and due from banks $ 11 $ 116 Deposits with banking subsidiaries 8,120 3,600 Restricted cash 1 3 Trading assets at fair value 5,752 139 Investment securities at fair value 19,268 — Securities purchased under agreement to resell with affiliates 38,592 57,906 Advances to subsidiaries: Bank and BHC 30,145 28,186 Non-bank 112,557 95,684 Equity investments in subsidiaries: Bank and BHC 35,971 34,329 Non-bank 31,856 31,246 Other assets 2,704 4,613 Total assets $ 284,977 $ 255,822 Liabilities Trading liabilities at fair value $ 148 $ 49 Securities sold under agreements to repurchase with affiliates 8,753 — Payables to subsidiaries 28,781 26,957 Other liabilities and accrued expenses 2,421 2,040 Borrowings 167,483 150,726 Total liabilities 207,586 179,772 Commitments and contingent liabilities (see Note 12) - Equity Preferred stock 8,520 7,520 Common stock, $0.01 par value: Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,788,086,805 and 1,852,481,601 20 20 Additional paid-in capital 23,545 23,271 Retained earnings 57,577 53,679 Employee stock trusts 2,907 2,851 AOCI (3,060) (2,643) Common stock held in treasury at cost, $0.01 par value (250,807,174 and 186,412,378 shares) (9,211) (5,797) Common stock issued to employee stock trusts (2,907) (2,851) Total shareholders' equity 77,391 76,050 Total liabilities and equity $ 284,977 $ 255,822 Parent Company Only—Condensed Cash Flow Statements $ in millions 2017 2016 2015 Cash flows from operating activities Net income $ 6,111 $ 5,979 $ 6,127 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Undistributed gain of subsidiaries (4,070) (4,168) (1,298) Other operating activities 1,087 1,367 1,084 Changes in assets and liabilities 619 (151) (2,984) Net cash provided by (used for) operating activities 3,747 3,027 2,929 Cash flows from investing activities Proceeds from (payments for): Investment securities: Purchases (5,263) — — Proceeds from sales 3,620 — — Proceeds from paydowns and maturities 1,038 — — Securities purchased under agreements to resell with affiliates 19,314 (10,846) (5,459) Securities sold under agreements to repurchase with affiliates 8,753 — — Advances to and investments in subsidiaries (33,825) (2,502) 1,364 Net cash provided by (used for) investing activities (6,363) (13,348) (4,095) Cash flows from financing activities Proceeds from: Issuance of preferred stock, net of issuance costs 994 — 1,493 Issuance of Borrowings 36,833 32,795 28,575 Payments for: Borrowings (24,668) (24,793) (23,458) Repurchases of common stock and employee tax withholdings (4,292) (3,933) (2,773) Cash dividends (2,085) (1,746) (1,455) Other financing activities 26 66 — Net cash provided by (used for) financing activities 6,808 2,389 2,382 Effect of exchange rate changes on cash and cash equivalents 221 (250) (65) Net increase (decrease) in cash and cash equivalents 4,413 (8,182) 1,151 Cash and cash equivalents, at beginning of period 3,719 11,901 10,750 Cash and cash equivalents, at end of period $ 8,132 $ 3,719 $ 11,901 Cash and cash equivalents: Cash and due from banks $ 11 $ 116 $ 5,166 Deposits with banking subsidiaries 8,120 3,600 4,311 Interest bearing deposits with banks — — 2,421 Restricted cash 1 3 3 Cash and cash equivalents, at end of period $ 8,132 $ 3,719 $ 11,901 Supplemental Disclosure of Cash Flow Information Cash payments for: Interest $ 3,570 $ 3,650 $ 3,959 Income taxes, net of refunds 201 201 255 Parent Company’s Borrowings with Original Maturities Greater than One Year At At December 31, December 31, $ in millions 2017 2016 Senior $ 157,255 $ 140,422 Subordinated 10,228 10,303 Total $ 167,483 $ 150,725 Transactions with Subsidiaries The Parent Company has transactions with its consolidated subsidiaries determined on an agreed-upon basis and has guaranteed certain unsecured lines of credit and contractual obligations on certain of its consolidated subsidiaries. Guarantees In the normal course of its business, the Parent Company guarantees certain of its subsidiaries’ obligations under derivative and other financial arrangements. The Parent Company records Trading assets and Trading liabilities, which include derivative contracts, at fair value i n its condensed balance sheets. The Parent Company also, in the normal course of its business, provides standard indemnities to counterparties on behalf of its subsidiaries for taxes, including U.S. and foreign withholding taxes, on inter est and other payments made on derivatives, securities and stock lending transactions, and certain annuity products. These indemnity payments could be required based on a change in the tax laws or change in interpretation of applicable tax rulings. Certain contracts contain provisions that enable the Parent Company to terminate the agreement upon the occurrence of such events. The maximum potential amount of future payments that the Parent Company could be required to make under these indemnifications canno t be estimated. The Parent Company has not recorded any contingent liability in its condensed financial statements for these indemnifications and believes that the occurrence of any events that would trigger payments under these contracts is remote. The Parent Company has issued guarantees on behalf of its subsidiaries to various U.S. and non-U.S. exchanges and clearinghouses that trade and clear securities and/or futures contracts. Under these guarantee arrangements, the Parent Company may be required t o pay the financial obligations of its subsidiaries related to business transacted on or with the exchanges and clearinghouses in the event of a subsidiary’s default on its obligations to the exchange or the clearinghouse. The Parent Company has not record ed any contingent liability in its condensed financial statements for these arrangements and believes that any potential requirements to make payments under these arrangements are remote. Guarantees of Debt Instruments and Warrants Issued by Subsidiaries $ in millions At December 31, 2017 At December 31, 2016 Aggregate balance $ 19,392 $ 11,538 In connection with subsidiary lease obligations, the Parent Company has issued guarantees to various lessors. Guarantees under Subsidiary Lease Obligations $ in millions At December 31, 2017 At December 31, 2016 Aggregate balance 1 $ 1,082 $ 1,090 1. Amounts primarily relate to the U.K. Finance Subsidiary The Parent Company fully and unconditionally guarantees the securities issued by Morgan Stanley Finance LLC, a 100%-owned finance subsidiary. Resolution and Recovery Planning As indicated in the Firm’s 2017 resolution plan submitted to the Federal Reserve and the FDIC, the Parent Company has amended and restated its support agreement with its material entities, as defined in the Firm’s 2017 resolution plan . Under the secured amended and restated support agreement, upon the occu rrence of a resolution scenario, the Parent Company would be obligated to contribute or loan on a subordinated basis all of its contributable material assets, other than shares in subsidiaries of the Parent Company and certain intercompany receivables, to provide capital and liquidity, as applicable, to its material entities . |
Quarterly Results
Quarterly Results | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results | |
Quarterly Results (Unaudited) | 23 . Quarterly Results (Unaudited) 2017 Quarter 1 $ in millions, except per share data First Second Third Fourth 2, 3 Total non-interest revenues $ 8,974 $ 8,752 $ 8,414 $ 8,505 Net interest 771 751 783 995 Net revenues 9,745 9,503 9,197 9,500 Total non-interest expenses 6,937 6,861 6,715 7,029 Income from continuing operations before income taxes 2,808 2,642 2,482 2,471 Provision for income taxes 815 846 697 1,810 Income from continuing operations 1,993 1,796 1,785 661 Income (loss) from discontinued operations (22) (5) 6 2 Net income 1,971 1,791 1,791 663 Net income applicable to noncontrolling interests 41 34 10 20 Net income applicable to Morgan Stanley $ 1,930 $ 1,757 $ 1,781 $ 643 Preferred stock dividends and other 90 170 93 170 Earnings applicable to Morgan Stanley common shareholders $ 1,840 $ 1,587 $ 1,688 $ 473 Earnings (loss) per basic common share 4 : Income from continuing operations $ 1.03 $ 0.89 $ 0.95 $ 0.27 Income (loss) from discontinued operations (0.01) — — — Earnings per basic common share $ 1.02 $ 0.89 $ 0.95 $ 0.27 Earnings (loss) per diluted common share 4 : Income from continuing operations $ 1.01 $ 0.87 $ 0.93 $ 0.26 Income (loss) from discontinued operations (0.01) — — — Earnings per diluted common share $ 1.00 $ 0.87 $ 0.93 $ 0.26 Dividends declared per common share $ 0.20 $ 0.20 $ 0.25 $ 0.25 Book value per common share $ 37.48 $ 38.22 $ 38.87 $ 38.52 2016 Quarter $ in millions, except per share data First Second Third Fourth 2, 5 Total non-interest revenues $ 6,893 $ 7,996 $ 7,906 $ 8,138 Net interest 899 913 1,003 883 Net revenues 7,792 8,909 8,909 9,021 Total non-interest expenses 6,054 6,426 6,528 6,775 Income from continuing operations before income taxes 1,738 2,483 2,381 2,246 Provision for income taxes 578 833 749 566 Income from continuing operations 1,160 1,650 1,632 1,680 Income (loss) from discontinued operations (3) (4) 8 — Net income 1,157 1,646 1,640 1,680 Net income applicable to noncontrolling interests 23 64 43 14 Net income applicable to Morgan Stanley $ 1,134 $ 1,582 $ 1,597 $ 1,666 Preferred stock dividends and other 79 157 79 156 Earnings applicable to Morgan Stanley common shareholders $ 1,055 $ 1,425 $ 1,518 $ 1,510 Earnings (loss) per basic common share 4 : Income from continuing operations $ 0.56 $ 0.77 $ 0.82 $ 0.84 Income (loss) from discontinued operations — (0.01) 0.01 — Earnings per basic common share $ 0.56 $ 0.76 $ 0.83 $ 0.84 Earnings (loss) per diluted common share 4 : Income from continuing operations $ 0.55 $ 0.75 $ 0.80 $ 0.81 Income (loss) from discontinued operations — — 0.01 — Earnings per diluted common share $ 0.55 $ 0.75 $ 0.81 $ 0.81 Dividends declared per common share $ 0.15 $ 0.15 $ 0.20 $ 0.20 Book value per common share $ 35.34 $ 36.29 $ 37.11 $ 36.99 For information on recurring-type discrete tax benefits related to the adoption of the accounting update Improvements to Employee Share-Based Payment Accounting , see the following table and Note 2. The fourth quarter of 2017 included an intermittent net discrete tax provision of approximately $1.2 billion , primarily related to the remeasurement of certain net deferred tax assets using the lower corporate tax rate as a result of the enactment of the Tax Act . The fourth quarter of 2017 and 2016 also inc luded net intermittent discrete tax benefits of $ 168 million and $ 135 million, respectively, primarily related to the remeasurement of reserves and related interest due to new information regarding the status of multi-year IRS tax examination s . Income tax consequences associated with employee share-based awards are excluded from intermittent net discrete tax provisions (benefits), as we anticipate conversion activity each year (see Note s 2 and 20 ) . T he fourth quarter of 2017 included a $ 53 million impairment of the Investment Management business segment’s equity method investment in a third- party asset manager. The s um of the quarters’ earnings per common share may not equal the annual amounts due to the averaging effect of the number of shares and share equivalents throughout the year . During the fourth quarter of 2016, net revenues included losses of approximately $ 60 million on sales and markdowns of legacy limited partnership investments in third-party-sponsored funds within the Investment Manage ment business segment. The fourth quarter of 2016 also included a $ 70 million provision within the Wealth Management business segment related to certain brokerage service reporting activities. Employee Share-Based Awards 2017 Quarter $ in millions First Second Third Fourth Discrete tax benefit $ 112 $ 16 $ 11 $ 16 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events | |
Subsequent Events | 24 . Subsequent Events The Firm has evaluated subsequent events for adjustment to or disclosure in the financial statements through the date of this report and has not identified any r ecordable or disclosa ble events not otherwise reported in these financial statements or the notes thereto . |
Significant Accounting Polici32
Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies | |
Revenue Recognition | Revenue Recognition Investment Banking Underwriting revenues and advisory fees from mergers, acquisitions and restructuring transactions are recorded when services for the transactions are determined to be substantially completed, generally as set forth under the terms of the engagement. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenues. Underwriting revenues are presented net of related expenses. Non-reimbursed expenses associated with advisory transactions are recorded within Non-interest expenses. Commissions and Fees Comm ission and fee revenues are recognized on trade date. Commission and fee revenues primarily arise from agency transactions in listed and OTC equity securities; services related to sales and trading activities; and sales of mutual funds, futures, insurance products and options. Asset Management Asset management revenues are recognized over the relevant contract period. Sales commissions paid by the Firm in connection with the sale of certain classes of shares of its open-end mutual fund products are accounted for as deferred commission assets. The Firm periodically tests deferred commission assets for recoverability based on cash flows expected to be received in future periods. In ce rtain management fee arrangements, the Firm is entitled to receive performance-based fees (which also may be referred to as incentive fees and which include carried interest) when the return on assets under management exceeds certain benchmark returns or o ther performance targets. In such arrangements, performance fee revenues are accrued (or reversed) quarterly based on measuring account or fund performance to date versus the performance benchmark stated in the investment management agreement. Performance- based fees are recorded within Investments or Asset management revenues depending on the nature of the arrangement. See Note 21 for information regarding the unrealized cumulative amount of performance-based fee revenues . See Note 12 for informati on regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Instruments within Trading assets and Trading liabilities are measured at fair value, either in accordance with accounting guidance or through the fair value option election (discussed below). These financial instruments primarily represent the Firm’s trading and investment positions and include both cash and derivative products. In addition, debt and equity securities classified as AFS securities are measured at fair value. Gains and losses on instruments carried at fair value are reflected in Trading revenues, Investments revenues or Investment ba nking reven ues in the income statements, except for AFS securities (see “ Investment Securities —A FS and HTM securities ” section herein and Note 5 ) and derivatives accounted for as hedges (see “Hedge Accounting” section herein and Note 4 ). Intere st income and interest expense are r ecorded within the income statements depending on the nature of the instrument and related market conventions. When interest is included as a component of the instruments’ fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense. Dividend income is recorded in Trading revenues or Investments revenues depending on the business activity. The fair value of OTC financial instrument s, including derivative contracts related to financial instruments and commodities, is presented i n the accompanying balance sheets on a net-by-counterparty basis, when appropriate. Additionally, the Firm nets the fair value of cash collateral pa id or received against the fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting agreement. Fair Value Option The Firm has elected to measure certain eligible instruments at fai r value , including certain Securities purchased under agreements to resell, loans and lending commitments, equity method investments, Deposits (structured certificate s of deposit) , Securities sold under agreements to repurchase, Oth er secured financings an d B orrowings (primarily structured notes). Fair Value Measurement—Definition and Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability ( i.e. , the “exit price”) in an orderly transaction between market participants at the measurement date. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are set to reflect those that the Firm believes market participants would use in pricing the asset or liability at the measurement date. Where the Firm manages a group of financial assets and financial liabilities on the basis of its net exposure to either market risks or credit risk, the Firm measures the fair value of that group of f inancial instruments consistently with how market participants would price the net risk exposure at the measurement date. In determining fair value, the Firm uses various valuation approaches and establishes a hierarchy for inputs used in measuring fair v alue that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the ass et or liability that were developed based on market data obtained from sources independent of the Firm. Unobservable inputs are inputs that reflect assumptions the Firm believes other market participants would use in pricing the asset or liability that are developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows , with Level 1 being the highest and Level 3 being the lowest level : Level 1. Valuat ions based on quoted prices in active markets that the Firm has the ability to access for identical assets or liabilities. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that ar e readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2. Valuations based on one or more quoted prices in markets that are not active or for which all signifi cant inputs are observable, either directly or indirectly. Level 3. Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the product. To the extent that v aluation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Firm in determining fair value is greatest for instru ments categorized in Level 3 of the fair value hierarchy. The Firm considers prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3 of the fair value hierarchy (see Note 3 ). In certain cases, the inputs used to measure fair valu e may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. For assets and liabilities that are transferred between levels in the fair value hierarchy during the period, fair values are ascribed as if the assets or liabilities had been transferred as of the beginning of the period. Valuation Techniques Many cash instruments and OTC derivative contracts have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that a party is willing to pay for an asset. Ask prices represent the lowest price that a party is willing to accept for an asset. The Firm carries positions at the point within the bid-ask range that meet s its best estimate of fair value. For offsetting positions in the same financial instrument, th e same price within the bid-ask spread is used to measure both the long and short positions. Fair value for many cash instruments and OTC derivative contracts is derived using pricing models. Pricing models take into account the contract terms, as well as multiple inputs, including, where applicable, commodity prices, equity prices, interest rate yield curves, credit curves, correlation, creditworthiness of the counterparty, creditworthiness of the Firm, option volatility and currency rates. Where appr opriate, valuation adjustments are made to account for various factors such as liquidity risk (bid-ask adjustments), credit quality, model uncertainty and concentration risk. Adjustments for liquidity risk adjust model-derived mid-market levels of Level 2 and Level 3 financial instruments for the bid-mid or mid-ask spread required to properly reflect the exit price of a risk position. Bid-mid and mid-ask spreads are marked to levels observed in trade activity, broker quotes or other external third-party dat a. Where these spreads are unobservable for the particular position in question, spreads are derived from observable levels of similar positions. The Firm applies credit-related valuation adjustments t o its B orrowings (primarily structured notes) for whi ch the fair value option was elected and to OTC derivatives. The Firm considers the impact of changes in its own credit spreads based upon observations of the secondary bond market spreads when measuring the fair valu e for B orrowings. For OTC derivatives , the impact of changes in both the Firm’s and the counterparty’s credit rating is considered when measuring fair value. In determining the expected exposure, the Firm simulates the distribution of the future exposure to a counterparty, then applies market -based default probabilities to the future exposure, leveraging external third-party CDS spread data. Where CDS spread data are unavailable for a specific counterparty, bond market spreads, CDS spread data based on the counterparty’s credit rating or CDS s pread data that reference a comparable counterparty may be utilized. The Firm also considers collateral held and legally enforceable master netting agreements that mitigate its exposure to each counterparty. Adjustments for model uncertainty are taken fo r positions whose underlying models are reliant on significant inputs that are neither directly nor indirectly observable, hence requiring reliance on established theoretical concepts in their derivation. These adjustments are derived by making assessments of the possible degree of variability using statistical approaches and market-based information where possible. The Firm may apply a concentration adjustment to certain of its OTC derivatives portfolios to reflect the additional cost of closing out a pa rticularly large risk exposure. Where possible, these adjustments are based on observable market information, but in many instances, significant judgment is required to estimate the costs of closing out concentrated risk exposures due to the lack of liquid ity in the marketplace. The Firm applies an FVA in the fair value measurements of OTC uncollateralized or partially collateralized derivatives and in collateralized derivatives where the terms of the agreement do not permit the reuse of the collateral received. In general, FVA reflects a market funding risk premium inherent in the noted derivative instruments. The methodology for measuring FVA leverages the Firm’s existing credit-related valuation adjustment calculation methodologies, which apply to bot h assets and liabilities. See Note 3 for a description of valuation techniques applied to the major categories of financial instruments measured at fair value. Assets and Liabilities M easured at Fair Value on a Nonr ecurring Basis Certain of the Firm’s assets and liabilities are measured at fair value on a non-recurring basis. The Firm incurs losses or gains for any adjustments of these assets or liabilities to fair value. For assets and liabilities measured at fair value on a no n-recurring basis, fair value is determined by using various valuation approaches. The same hierarchy for inputs as described above, which maximizes the use of observable inputs and minimizes the use of unobservable inputs by generally requiring that the o bservable inputs be used when available, is used in measuring fair value for these items. Valuation Process The Valuation Review Group (“VRG”) within the Firm’s Financial Control Group (“FCG”) is responsible for the Firm’s fair value valuation poli cies, processes and procedures. VRG is independent of the business units and reports to the Chief Financial Officer , who has final authority over the valuation of the Firm’s financial instruments. VRG implements valuation control processes designed to vali date the fair value of the Firm’s financial instruments measured at fair value, including those derived from pricing models. Model Review. VRG, in conjunction with the Model Risk Management Department (“MRM”) , which reports to the Chief Risk Officer, independently review s valuation models’ theoretical soundness, the appropriateness of the valuation methodology and calibration techniques developed by the business units using observable inputs. Where inputs are not observable, VRG reviews the appropriat eness of the proposed valuation methodology to determine that it is consistent with how a market participant would arrive at the unobservable input. The valuation methodologies utilized in the absence of observable inputs may include extrapolation techniqu es and the use of comparable observable inputs. As part of the review, VRG develops a methodology to independently verify the fair value generated by the business unit’s valuation models. The Firm generally subjects valuations and models to a review proces s initially and on a periodic basis thereafter. Independent Price Verification. The business units are responsible for determining the fair value of financial instruments using approved valuation models and valuation methodologies. Generally on a mont hly basis, VRG independently validates the fair values of financial instruments determined using valuation models by determining the appropriateness of the inputs used by the business units and by testing compliance with the documented valuation methodolog ies approved in the model review process described above. The results of this independent price verification and any adjustments made by VRG to the fair value generated by the business units are presented to management of the Firm’s three business segmen ts ( i.e., Institutional Securities, Wealth Management and Investment Management), the C hief Financial Officer and the Chief Risk Officer on a regular basis. VRG uses recently executed transactions, other observable market data such as exchange data, brok er-dealer quotes, third-party pricing vendors and aggregation services for validating the fair value of financial instruments generated using valuation models. VRG assesses the external sources and their valuation methodologies to determine if the external providers meet the minimum standards expected of a third-party pricing source. Pricing data provided by approved external sources are evaluated using a number of approaches; for example, by corroborating the external sources’ prices to executed trades, by analyzing the methodology and assumptions used by the external source to generate a price, and/or by evaluating how active the third-party pricing source (or originating sources used by the third-party pricing source) is in the market. Based on this analy sis, VRG generates a ranking of the observable market data designed to ensure that the highest-ranked market data source is used to validate the business unit’s fair value of financial instruments. VRG reviews the models and valuation methodology used t o price new material Level 2 and Level 3 transactions, and both FCG and MRM must approve the fair value of the trade that is initially recognized. Level 3 Transactions. VRG reviews the business unit’s valuation techniques to assess whether these are cons istent with market participant assumptions. For further information on financial assets and liabilities that are measured at fair value on a recurring and non-recurring basis, see Note 3 . |
Offsetting of Derivative Instruments | Offsetting of Derivative Instruments In connection with its derivative activities, the Firm generally enters into master netting agreements and collateral agreements with its counterparties. These agreements provide the Firm with the right, in the event of a default by the counterparty, to net a counterparty's righ ts and obligations under the agreement and to liquidate and set off collateral against any net amount owed by the counterparty. However, in certain circumstances, the Firm may not have such an agreement in place; the relevant insolvency regime may not support the enforceability of the master netting agreement or collateral agreement; or the Firm may not have sought legal advice to support the enforceability of the agreement. In cases where the Firm has not determined an agreement to be enforceable, the related amounts are not offset (see Note 4). The Firm’s policy is generally to receive securities and cash posted as collateral (with rights of rehypothecation), irrespective of the enforceability determination regarding the master netting and collateral agreement. In certain cases, the Firm may agree for such collateral to be posted to a third-party custodian under a control agreement that enables it to take control of such collateral in the event of a counterparty default. The enforceability of the mast er netting agreement is taken into account in the Firm’s risk management practices and application of counterparty credit limits. For information related to offsetting of derivatives and certain collateralized transactions, see Notes 4 and 6 , respectively. |
Hedge Accounting | Hedge Accounting The Firm applies hedge accounting using various derivative financial instruments for the following types of hedges: hedges of changes in the fair value of assets and liabilities due to the risk being hedged (fair v alue hedges); and hedges of net investments in foreign operations whose functional currency is different from the reporting currency of the Parent Company (net investment hedges) . These financial instruments are included within Trading assets—Derivative an d other contracts or Trading liabilities—Derivative and other contracts in the balance sheets. For hedges where hedge accounting is being applied, the Firm performs effectiveness testing and other procedures. Fair Value Hedges—Interest Rate Risk The Fir m’s designated fair value hedges consist primarily of interest rate swaps designated as fair value hedges of changes in the benchmark interest rate of certain fixed rate senior b orrowings. The Firm uses regression analysis to perform an ongoing prospective and retrospective assessment of the effectiveness of these hedging relationships. A hedging relationship is deemed effective if the change in fair value of the hedging instrument (derivative) and the change in fair value of the hedged item (debt liability ) due to changes in the benchmark interest rate offset within a range of 80% to 125%. The Firm considers the impact of valuation adjustments related to its own credit spreads and counterparty credit spreads to determine whether they would cause the hedging relationship to be ineffective. For qualifying fair value hedges of benchmark interest rates, the changes in the fair value of the derivative and the changes in the fair value of the hedged liability provide an offset of one another and, together with a ny resulting ineffectiveness, are recorded in Interest expense. When a derivative is de-designated as a hedge, any basis adjustment remaining on the hedged liability is amortized to Interest expense over the remaining life of the liability using the effect ive interest method. Net Investment Hedges The Firm uses forward foreign exchange contracts to manage a portion of the currency exposure relating to its net investments in non-U.S. dollar functional currency operations. To the extent that the notional amounts of the hedging instruments equal the portion of the investments being hedged and the underlying exchange rate of the derivative hedging instrument relates to the exchange rate between the functional currency of the investee and the Parent Company's functional currency, no hedge ineffectiveness is recognized in earnings. If these exchange rates are not the same, the Firm uses regression analysis to assess the prospective and retrospective effectiveness of the hedge relationships, and any ineffectiven ess is recognized in Interest income. The gain or loss from revaluing hedges of net investments in foreign operations at the spot rate is reported within AOCI. The forward points on the hedging instruments are excluded from hedge effectiveness testing and are recorded in Interest income. For further information on derivative instruments and hedging activities, see Note 4 . |
Investment Securities - Available-for-Sale and Held-to-Maturity | Investment Securities —Available-for-Sale and Held-to-Maturity AFS securities are reported at fair value in the balance sheet s with unrealized gains and losses reported in AOCI, net of tax. Interest and dividend income, including amortization of premiums and accretion of discounts, is included in Interest income in the income statements. Realized gains and losses on AFS securiti es are reported in the income statements (see Note 5 ). The Firm utilizes the “first-in, first-out” method as the basis for determining the cost of AFS securities. HTM securities are reported at amortized cost in the balance sheets. Interest income, i ncluding amortization of premiums and accretion of discounts on HTM securities, is included in Interest income in the income statements. Other-than-Temporary Impairment AFS debt securities and HTM securities with a current fair value less than their amo rtized cost are analyzed as part of the Firm’s periodic assessment of temporary versus OTTI at the individual security level. A temporary impairment is recognized in AOCI. OTTI is recognized in the income statements with the exception of the non-credit por tion related to a debt security that the Firm does not intend to sell and is not likely to be required to sell, which is recognized in AOCI. For AFS debt securities that the Firm either has the intent to sell or that the Firm is likely to be required t o sell before recovery of its amortized cost basis, the impairment is considered OTTI. For those AFS debt securities that the Firm does not have the intent to sell or is not likely to be required to sell, and for all HTM securities, the Firm evaluates whether it expects to recover the entire amortized cost basis of the debt security. If the Firm does not expect to recover the entire amortized cost of those AFS debt securities or HTM securities, the impairment is considered OTTI, and the Firm determines what portion of the impairment relates to a credit loss and what portion relates to non-cre dit factors. A credit loss exists if the present value of cash flows expected to be collected (discounted at the implicit interest rate at acquisition of the security or discounted at the effective yield for securities that incorporate changes in prepaym ent assumptions) is less than the amortized cost basis of the security. Changes in prepayment assumptions alone are not considered to result in a credit loss. When determining if a credit loss exists, the Firm considers relevant information, including: the length of time and the extent to which the fair value has been less than the amortized cost basis; adverse conditions specifically related to the security, its industry or geographic area; changes in the financial condition of the issuer of the sec urity , the presence of explicit or implicit guarantees of repayment by the U.S. Government for U.S. Government and Agency securities or, in the case of an asset-backed debt security, changes in the financial condition of the underlying loan obligors; the historical and implied volatility of the fair value of the security; the payment structure of the debt security and the likelihood of the issuer being able to make payments that increase in the future; failure of the issuer of the security to make sch eduled interest or principal payments; the current rating and any changes to the rating of the security by a rating agency; recoveries or additional declines in fair value after the balance sheet date. When estimating the present value of expected cash flows, information includes the remaining payment terms of the security, prepayment speeds, financial condition of the issuer(s), expected defaults and the value of any underlying collateral. For AFS equity securities, the Firm considers various fa ctors, including the intent and ability to hold the equity security for a period of time sufficient to allow for any anticipated recovery in market value in evaluating whether an OTTI exists. If the equity security is considered other-than-temporarily impa ired, the entire OTTI ( i.e. , the difference between the fair value recorded in the balance sheet and the cost basis) will be recognized in the income statements. |
Loans | Loans The Firm accounts for loans based on the following categories: loans held for invest ment; loans held for sale; and loans at fair value. Loans Held for Investment Loans held for investment are reported at outstanding principal adjusted for any charge-offs, the allowance for loan losses, any unamortized deferred fees or costs for origi nated loans, and any unamortized premiums or discounts for purchased loans. Interest Income. Interest income on performing loans held for investment is accrued and recognized as interest income at the contractual rate of interest. Purchase price discounts or premiums, as well as net deferred loan fees or costs, are amortized into interest income over the life of the loan to produce a level rate of return. Allowance for Loan Losses. The allowance for loan losses estimates probable losses rela ted to loans specifically identified for impairment in addition to the probable losses inherent in the held for investment loan portfolio. The Firm utilizes the U.S. banking agencies’ definition of criticized exposures, which consist of the special ment ion , substandard, doubtful and loss categories as credit quality indicators. For further information on the credit quality indicators, see Note 7 . Substandard loans are regularly reviewed for impairment. Factors considered by management when determin ing impairment include payment status, fair value of collateral, and probability of collecting scheduled principal and interest payments when due. The impairment analysis required depends on the nature and type of loans. Loans classified as Doubtful or Los s are considered impaired. There are two components of the allowance for loan losses: the specific allowance component and the inherent allowance component. The specific allowance component of the allowance for loan losses is used to estimate probable losses for non-homogeneous exposures that have been specifically identified for impairment analysis by the Firm and determined to be impaired. When a loan is specifically identified for impairment, the impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or as a practical expedient, the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent. If the present value of the expected f uture cash flows (or alternatively, the observable market price of the loan or the fair value of the collateral) is less than the recorded investment in the loan, then the Firm recognizes an allowance and a charge to the provision for loan losses within Ot her revenues. The inherent allowance component of the allowance for loan losses is used to estimate the probable losses inherent in the loan portfolio and includes non-homogeneous loans that have not been identified as impaired and portfolios of smaller balance homogeneous loans. The Firm maintains methodologies by loan product for calculating an allowance for loan losses that estimates the inherent losses in the loan portfolio. Generally, inherent losses in the portfolio for non-impaired loans are estim ated using statistical analysis and judgment around the exposure at default, the probability of default and the loss given default. Qualitative and environmental factors such as economic and business conditions, nature and volume of the portfolio, and lend ing terms and volume and severity of past due loans may also be considered in the calculations. The allowance for loan losses is maintained at a level to ensure that it is reasonably likely to adequately absorb the estimated probable los ses inherent in the portfolio. When the Firm recognizes an allowance , there is also a charge to the provision for loan losses within Other revenues. Troubled Debt Restructurings . The Firm may modify the terms of certain loans for economic or legal reasons related to a bor rower’s financial difficulties by granting one or more concessions that the Firm would not otherwise consider. Such modifications are accounted for and reported as a TDR. A loan that has been modified in a TDR is generally considered to be impaired and is evaluated for the extent of impairment using the Firm’s specific allowance methodology. TDRs are also generally classified as nonaccrual and may only be returned to accrual status after considering the borrower’s sustained repayment performance for a reas onable period. Nonaccrual Loans. The Firm places loans on nonaccrual status if principal or interest is past due for a period of 90 days or more or payment of principal or interest is in doubt unless the obligation is well-secured and in the process o f collection. A loan is considered past due when a payment due according to the contractual terms of the loan agreement has not been remitted by the borrower. Substandard loans, if identified as impaired, are categorized as nonaccrual. Loans classified as Doubtful or Loss are categorized as nonaccrual. Payments received on nonaccrual loans held for investment are applied to principal if there is doubt regarding the ultimate collecti bility of principal ( i.e ., cost recovery method). If collection of the pr incipal of nonaccrual loans held for investment is not in doubt, interest income is re alized on a cash basis. If neither principal nor interest collection is in doubt, loans are on accrual status, and interest income is recognized using the effective inter est method. Loans that are on nonaccrual status may not be restored to accrual status until all delinquent principal and/or interest has been brought current after a reasonable period of performance, typically a minimum of six months. Charge-offs. Th e Firm charges off a loan in the period that it is deemed uncollectible and records a reduction in the allowance for loan losses and the balance of the loan. In general, any portion of the recorded investment in a collateral dependent loan (including any c apitalized accrued interest, net deferred loan fees or costs, and unamortized premium or discount) in excess of the fair value of the collateral that can be identified as uncollectible, and is therefore deemed a confirmed loss, is charged off against the a llowance for loan losses. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the sale or operation of the underlying collateral. In addition, for loan transfers from loans held for investment to loans held for sale, at the time of transfer, any reduction in the loan value is reflected as a charge-off of the recorded investment, resulting in a new cost basis. Lending Commitments. The Firm records the liability and related expense for the credit exposure rel ated to commitments to fund loans that will be held for investment in a manner similar to outstanding loans dis cussed above. The analysis also incorporates a credit conversion factor, which is the expected utilization of the undrawn commitment. The liabili ty is recorded in Other liabilities and accru ed expenses in the balance sheets, and the expense is recorded in Other non-intere st expenses in the income statements. For more information regarding loan commitments, standby letters of credit and financial gu arantees, see Note 12 . Loans Held for Sale Loans held for sale are measured at the lower of cost or fair value, with valuation changes recorded in Other revenues . The Firm determines the valuation allowance on an individual loan basis, except for residential mortgage loans for which the valuation allowance is determined at the loan product level. Any decreases in fair value below the initial carrying amount and any recoveries in fair value up to the initial carrying amount are recorded in Other rev enues. However, increases in fair value above initial carrying value are not recognized. Interest income on loans held for sale is accrued and recognized based on the contractual rate of interest. Loan origination fees or costs and purchase price discou nts or premiums are deferred in a contra loan account until the related loan is sold. The deferred fees or costs and discounts or premiums are an adjustment to the basis of the loan and, therefore, are included in the periodic determination of the lower of cost or fair value adjustments and/or the gain or loss recognized at the time of sale. Lending Commitments . Commitments to fund mortgage loans held for sale are derivatives and are reported in Trading assets or Trading liabilities in the balance sheets with an offset to Tradi ng revenues in the income statements. Commitments to fund non-mortgage loans held for sale are not derivatives. The Firm records the liability and related expense for the fair value exposure below cost of such commitments in Othe r liabilities and accru ed expenses in the balance sheets with an offset to Ot her revenues in the income statements. Loans and lending commitments held for sale are subject to the nonaccrual policies described above in the Loans Held for Investment—Nonacc rual loans section . Because loans and lending commitments held for sale are recognized at the lower of cost or fair value, the allowance for loan losses and charge-off policies does not apply to these loans. Loans at Fair Value Loans for which the fa ir value option is elected are carried at fair value, with changes in fair value recognized in earnings. Loans carried at fair value are not evaluated for purposes of recording an allowance for loan losses. For further information on loans carried at fair value and classified as Trading assets and Trading liabilities , see Note 3 . Lending Commitments. The Firm records the liability and related expense for the fair value exposure related to commitments to fund loans that will be measured at fair value. T he liability is recorded in Trading liabilities in the balance sheets, and the expense is recorded in Tradi ng revenues in the income statements. Loans and lending commitments at fair value are subject to the nonaccrual policies described above in the Loans Held for Investment—Nonaccrual loans section . Because such loans and lending commitments are re ported at fair value, the allowance for loan los ses and charge-off policies do not apply to these loans. For further information on loans, see No te 7 . |
Transfer of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales when the Firm has relinquished control over the transferred assets. Any related gain or loss on sale is recorded in Net revenues. Transfers that are not accounted for as sales are treated as a collateralized financing, in certain cases referred to as “failed sales.” Securities borrowed or purchased under agreements to resell and securities loaned or sold under agreements to repurchase are treated as co llateralized financings (see Note 6 ). Securities purchased under agreements to resell (“reverse repurchase agreements”) and Securities sold under agreements to repurchase (“repurchase agreements”) are carried in the balance sheets at the amounts of cash paid or received, plus accrued interest, except for certain repurchase agreements for which the Firm has elected the fair value option (see Note 3 ). Where appropriate, repurchase agreements and reverse repurchase agreements with the same counte rparty are reported on a net basis. Securities borrowed and securities loaned are recorded at the amount of cash collateral advanced or received . In instances where the Firm is the lender in securities-for-securities transactions and is permitted to sell o r repledge these securities, the fair value of the collateral received is reported in Trading assets and the related obligation to return the collateral is reported in Trading liabilities in the balance sheets. Securities-for-securities transactions where the Firm is the borrower are not included in the balance sheets . |
Premises, Equipment and Software Costs | Premises, Equipment and Software Costs Premises, equipment and software costs consist of buildings, leasehold improvements, furniture, fixtures, computer and communications equipment, power generation assets, terminals, pipelines and software (externally purchased and developed for internal use). Premises, equipment and software costs are stated at cost less accumulated depreciation and amortization and are included in O ther assets in the balance sheets. Depreciation and amortization are provided by the straight-line method over the estimated useful life of the asset. Estimated Useful Lives of Assets in years Estimated Useful Life Buildings 39 Leasehold improvements—Building term of lease to 25 Leasehold improvements—Other term of lease to 15 Furniture and fixtures 7 Computer and communications equipment 3 to 9 Power generation assets 15 to 29 Terminals, pipelines and equipment 3 to 30 Software costs 3 to 10 Premises, equipment and software costs are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Fi rm tests goodwill for impairment on an annual basis and on an interim basis when certain events or circumstances exist. The Firm tests for impairment at the reporting unit level, which is generally at the level of or one level below its business segments. For both the annual and interim t ests, the Firm has the option to either (a) perform a quantitative impairment test or (b) first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, in wh ich case the quantitative test would be performed. When performing a quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carryi ng amount, the goodwill impairment loss is equal to the lesser of the excess of the carrying value over the fair value or the carrying amount of goodwill allocated to that reporting unit . The estimated fair values of the reporting units are derived based on valuation techniques the Firm believes market participants would use f or each of the reporting units. The estimated fair values are generally determined by utilizing a discounted cash flow methodology or methodologies that incorporate price-to-book and price-to-earnings multiples of certain comparable companies. Goodwill is not amortized but, as noted above, is reviewed annually (or more frequently when certain events or circumstances exist) for impairment. Other intangible assets are amortized over their estimated useful lives and reviewed for impairment. Impairment losses are recorded within Other expenses in the income statements. |
Earnings per Common Share | Earnings per Common Share Basic EPS is computed by dividing earnings available to Morgan Stanley common shareholders by the weighted average number of common shares outstanding for the period. Earnings available to Morgan Stanley common shareholders represents net income applicable to Morgan Stanley reduced by preferred stock dividends and allocations of ear nings to participating securities. Common shares outstanding include common stock and vested RSUs where recipients have satisfied either the explicit vesting terms or retirement-eligibility requirements. Diluted EPS reflects the assumed conversion of all d ilutive securities. Unvested share-based awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class method. Share-based awards that pay dividend equivalents subject to vesting are not deemed participating securities and are included in diluted shares outstanding (if dilutive) under the treasury stock method. The Firm has granted PSUs that vest and convert to s hares of common stock o nly if they satisfy predetermined performance and market goals. Since the issuance of the shares is contingent upon the satisfaction of certain conditions, the PSUs are included in diluted EPS based on the number of shares (if any) that would be issuable i f the end of the reporting period was the end of the contingency period. For the calculation of basic and diluted EPS, see Note 16 . |
Deferred Compensation | Deferred Compensation Stock-Based Compensation The Firm measures compensation cost for stock-based awards at fair value and recognizes compensation cost over the service period. The Firm accounts for forfeitures as they occur. The Firm determines the fair value of RSUs (including RSUs with non-market performance conditions) based on the grant-date fair value of i ts common stock, measured as the volume-weighted average price on the date of grant. Certain stock-based compensation with market-based conditions is valued using a Monte Carlo valuation model. Compensation expense for stock-based compensation awards is recognized using the graded vesting attribution method. Compensation expense for awards with performance conditions is recognized based on the probable outcome of the performance condition at each reporting date. Compensation expense for awards with marke t-based conditions is recognized irrespective of the probability of the market condition being achieved and is not reversed if the market condition is not met. The Firm recognizes the expense for stock-based awards over the requisite service period. The se awards generally contain clawback and cancellation provisions. Certain awards provide the Firm discretion to cancel all or a portion of the award under specified circumstances. Compensation expense for those awards is adjusted for changes in the fair va lue of the Firm's common stock or the relevant model valuation, as appropriate, until conversion, exercise or expiration. For year-end stock-based awards anticipated to be granted to retirement-eligible employees under award terms that do not contain a future service requirement, the Firm accrues the estimated cost over the course of the calendar year preceding the grant date , which reflects the period over which the compensation is earned. Employee Stock Trusts In connection with certain stock-based compensation plans, the Firm maintains and utilizes Employee stock trusts at its discretion . The assets of the Employee stock trusts are consolidated and, as such, are accounted for in a manner similar to treasury sto ck, where the shares of common stock outstanding are offset by an equal amount in Common stock issued to E mployee stock trusts in the balance sheets . The Firm uses the grant-date fair value of stock-based compensation as the basis for recognition of the assets in the Employee stock trusts. Subsequent changes in the fair value are not recognized as the Firm’s stock-based compensation plans do not permit diversification and must be settled by the delivery of a fixed number of shares of the Firm’s common sto ck. Deferred Cash-Based Compensation Compensation expense for deferred cash-based compensation plans is calculated based on the notional value of the award granted, adjusted for changes in the fair value of the referenced investments. For unvested a wards, the expense is recognized over the service period using the graded vesting attribution method. For vested awards with only notional earnings on the referenced investments, the expense is fully recognized in the current period. For year-end awards an ticipated to be granted to retirement-eligible employees under award terms that do not contain a future service requirement, the Firm accrues the estimated cost over the course of the calendar year preceding the grant date , which reflects the period over w hich the compensation is earned. The Firm invests directly, as a principal, in investments or other financial instruments to economically hedge its obligations under its deferred cash-based compensation plans. Changes in value of such investments made by the Firm are recorded in Trading revenues and Investments revenues. Changes in compensation expense resulting from changes in the fair value of the referenced investments will generally be offset by changes in the fair value of investments made by the Firm . However, there may be a timing difference between the immediate recognition of gains and losses on the Firm’s investments and the deferred recognition of the related compensation expense over the vesting period. |
Income Taxes | Income Taxes The Firm accounts for income tax expense (benefit) using the asset and liability method. Under this method, deferred tax assets and liabilities are recorded based upon the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax expense (benefit) in the period that includes the e nactment date. Such effects are recorded in income tax expense (benefit) from continuing operations regardless of where deferred taxes were originally recorded. The Firm recognizes net deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Firm considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations. When performing the assessment , the Firm considers all types of deferred tax assets in combination with each other, regardles s of the origin of the underlying temporary difference. If a deferred tax asset is determined to be unrealizable, a valuation allowance is established. If the Firm subsequently determines that it would be able to realize deferred tax assets in excess of th eir net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Firm recognizes tax expense associated with global intangible low-taxed income provisions (“GILTI”) included in the Tax Cuts and Jobs Act ( “Tax Act”) as it is incurred as part of the current income taxes to be paid or refunded for the current period. Uncertain tax positions are recorded on the basis of a two-step process, whereby (1) the Firm determine s whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Firm recognizes the largest am ount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to unrecognized tax benefits are classified as provision for income taxes. Notwithstanding the above, it may be appropriate to record future adjustments made to amounts related to the Tax Act as an adjustment to income tax expense (benefit) from continuing operations in the reporting period the adjustments are determined, depending on the nature of the est imate and reason for the adjust ment . |
Foreign Currencies | Foreign Currencies Assets and liabilities of operations with non-U.S. dollar functional currencies are translated at year-end rates of exchange. Gains or losses resulting from translating foreign currency financial statements, net of hedge gains or losses and related tax effects, are reflected in AOCI, a separate component of Morgan Stanley Sharehold ers’ equity in the balance sheets. Gains or losses resulting from remeasurement of foreign currency transactions are included in net income, and amounts recognized in the income statement are translated at the rate of exchange on the respective date of recognition for each amount. |
Accounting Standards Adopted | Accounting Standards Adopted The Firm adopted the following accounting update s in 2017. Improvements to Employee Share-Based Payment Accounting . This accounting update , adopted January 1, 2017, simplifies the accounting for employee share-based awards , including the recognition of forfeitures, the classification of related income tax consequences, and the classif ication of tax-related cash flows within the cash flow statements . Beginning in 2017, the income tax consequences related to share-based awa rds are required to be recognized in Provision for income taxes in the income statements upon the conversion of employee share-based awards instead of A dditional paid-in capital. The impact of the income tax consequences upon conversion of the awards may b e either a benefit or a provision. Conversion of employee share-based awards to Firm shares will primarily occur in the first quarter of each year. The impact of recognizing excess tax benefits upon conversion of awards in the quarter in which the accounti ng update was adopted (three months ended March 31, 2017) was a $ 112 million benefit to Provision for income taxes. For full year impact of this discrete tax item, see Note 21. The classification of cash flows from excess tax benefits was moved from the fi nancing section to the operating section of the cash flow statements, and was applied on a retrospective basis. In addition, this accounting update permits an entity to elect whether to continue to estimate the total forfeitures, or to account for forfeit ures on an actual basis as they occur. The Firm has elected to account for forfeitures on an actual basis as they occur. This change is required to be applied using a modified retrospective approach, and upon adoption, the Firm recorded a cumulative catch- up adjustment, decreasing Retained earnings by approximately $ 30 million net of tax, increasing Additional paid-in capital by approximately $ 45 million and increasing deferred tax assets by approximately $ 15 million. Statement of Cash Flows—Restricted Cas h . This accounting update requires that an entity include in its cash and cash equivalents amounts that are deemed to be restricted cash and cash equivalents and to present a reconciliation of such amount s in the cash flow statements. The Firm early adopted this accounting update in the fourth quarter of 2017. Prior periods were retrospectively adjusted to conform to the current period presentation. Upon adoption, the Firm recorded an increase of $ 2.9 billion and a decrease of $ (8.3) billion in Net ca sh provided by (used for) operating activities, for the years ended December 31, 2016 and 2015, respectively. These impacts were primarily related to reclassifying the changes in the Firm’s Restricted cash balance from the operating section to the cash an d cash equivalent balances within the cash flow statements. Income Tax Accounting Implications of the Tax Cuts and Jobs Act. This SEC Staff Accounting Bulletin addresses the recognition of the tax effects of the Tax Act in the period of enactment (2017). It allows companies to book provisional estimates of the effects, or to report that their accounting is incomplete whe n issuing financial statements. To the extent that provisional estimates are booked, it allows a one year measurement period during which any adjustments made to previous provisional amounts would be recorded as an adjustment to income tax expense (benefit) from continuing operations in the reporting period t he adjustments are determined. The adoption of this accounting guidance in the fourt h quarter of 2017 did not have a material impact on the Firm's financial statements. |
Significant Accounting Polici33
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies | |
Estimated Useful Lives of Assets | Estimated Useful Lives of Assets in years Estimated Useful Life Buildings 39 Leasehold improvements—Building term of lease to 25 Leasehold improvements—Other term of lease to 15 Furniture and fixtures 7 Computer and communications equipment 3 to 9 Power generation assets 15 to 29 Terminals, pipelines and equipment 3 to 30 Software costs 3 to 10 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 At December 31, 2017 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Assets at fair value Trading assets: U.S. Treasury and agency securities $ 22,077 $ 26,888 $ — $ — $ 48,965 Other sovereign government obligations 2 20,234 7,825 1 — 28,060 State and municipal securities — 3,592 8 — 3,600 MABS — 2,364 423 — 2,787 Corporate bonds — 15,105 456 — 15,561 CDO — 445 84 — 529 Loans and lending commitments 3 — 4,791 5,945 — 10,736 Other debt — 1,287 161 — 1,448 Corporate equities 4 149,697 492 166 — 150,355 Derivative and other contracts: Interest rate 472 178,704 1,763 — 180,939 Credit — 7,602 420 — 8,022 Foreign exchange 58 53,724 15 — 53,797 Equity 1,101 40,359 3,530 — 44,990 Commodity and other 1,126 5,390 4,147 — 10,663 Netting 1 (2,088) (216,764) (1,575) (47,171) (267,598) Total derivative and other contracts 669 69,015 8,300 (47,171) 30,813 Investments 5 297 523 1,020 — 1,840 Physical commodities — 1,024 — — 1,024 Total trading assets 5 192,974 133,351 16,564 (47,171) 295,718 Investment securities— AFS 27,522 27,681 — — 55,203 Intangible assets — 3 — — 3 Total assets at fair value $ 220,496 $ 161,035 $ 16,564 $ (47,171) $ 350,924 At December 31, 2017 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Liabilities at fair value Deposits $ — $ 157 $ 47 $ — $ 204 Trading liabilities: U.S. Treasury and agency securities 17,802 24 — — 17,826 Other sovereign government obligations 2 24,857 2,016 — — 26,873 Corporate and other debt — 7,141 3 — 7,144 Corporate equities 4 52,653 82 22 — 52,757 Derivative and other contracts: Interest rate 364 162,239 545 — 163,148 Credit — 8,166 379 — 8,545 Foreign exchange 23 55,118 127 — 55,268 Equity 1,001 44,666 2,322 — 47,989 Commodity and other 1,032 5,156 2,701 — 8,889 Netting 1 (2,088) (216,764) (1,575) (36,717) (257,144) Total derivative and other contracts 332 58,581 4,499 (36,717) 26,695 Total trading liabilities 95,644 67,844 4,524 (36,717) 131,295 Securities sold under agreements to repurchase — 650 150 — 800 Other secured financings — 3,624 239 — 3,863 Borrowings — 43,928 2,984 — 46,912 Total liabilities at fair value $ 95,644 $ 116,203 $ 7,944 $ (36,717) $ 183,074 At December 31, 2016 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Assets at fair value Trading assets: U.S. Treasury and agency securities $ 27,579 $ 20,392 $ 74 $ — $ 48,045 Other sovereign government obligations 14,005 5,497 6 — 19,508 State and municipal securities — 2,355 250 — 2,605 MABS — 1,691 217 — 1,908 Corporate bonds — 11,051 232 — 11,283 CDO — 602 63 — 665 Loans and lending commitments 3 — 3,580 5,122 — 8,702 Other debt — 1,360 180 — 1,540 Corporate equities 4 131,574 352 446 — 132,372 Derivative and other contracts: Interest rate 1,131 300,406 1,373 — 302,910 Credit — 11,727 502 — 12,229 Foreign exchange 231 74,921 13 — 75,165 Equity 1,185 35,736 1,708 — 38,629 Commodity and other 2,808 6,734 3,977 — 13,519 Netting 1 (4,378) (353,543) (1,944) (51,381) (411,246) Total derivative and other contracts 977 75,981 5,629 (51,381) 31,206 Investments 5 237 197 958 — 1,392 Physical commodities — 112 — — 112 Total trading assets 5 174,372 123,170 13,177 (51,381) 259,338 Investment securities— AFS 29,120 34,050 — — 63,170 Securities purchased under agreements to resell — 302 — — 302 Intangible assets — 3 — — 3 Total assets at fair value $ 203,492 $ 157,525 $ 13,177 $ (51,381) $ 322,813 At December 31, 2016 $ in millions Level 1 Level 2 Level 3 Netting 1 Total Liabilities at fair value Deposits $ — $ 21 $ 42 $ — $ 63 Trading liabilities: U.S. Treasury and agency securities 11,636 61 — — 11,697 Other sovereign government obligations 20,658 2,430 — — 23,088 Corporate and other debt — 6,121 36 — 6,157 Corporate equities 4 57,847 54 35 — 57,936 Derivative and other contracts: Interest rate 1,244 285,379 953 — 287,576 Credit — 12,550 875 — 13,425 Foreign exchange 17 75,510 56 — 75,583 Equity 1,162 37,828 1,524 — 40,514 Commodity and other 2,663 6,845 2,377 — 11,885 Netting 1 (4,378) (353,543) (1,944) (39,803) (399,668) Total derivative and other contracts 708 64,569 3,841 (39,803) 29,315 Physical commodities — 1 — — 1 Total trading liabilities 90,849 73,236 3,912 (39,803) 128,194 Securities sold under agreements to repurchase — 580 149 — 729 Other secured financings — 4,607 434 — 5,041 Borrowings 47 37,081 2,014 — 39,142 Total liabilities at fair value $ 90,896 $ 115,525 $ 6,551 $ (39,803) $ 173,169 MABS—Mortgage- and a sset-backed securities 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 “Netting.” P ositions classified within the same level that are with the same counterparty are netted within that level. For further information on derivative instruments and hedging activities, see Note 4 . During 2017 , the Firm transferred from Level 2 to Leve l 1 $ 1. 2 billion and $ 1. 0 billion of Trading assets — Other sovereign government obligations and Trading liabilities — Other sovereign government obligations, respectively, due to increased market activity in these instruments. For further breakdown by type, s ee the following Loans and Lending Commitments at Fair Value table. For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes. Amounts exclude certain investments that are measured at fair value using the NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “Fair Value of Investments Measured at N et Asset Value ” herein . |
Loans and Lending Commitments at Fair Value | Loans and Lending Commitments at Fair Value $ in millions At December 31, 2017 At December 31, 2016 Corporate $ 8,358 $ 7,217 Residential real estate 799 966 Wholesale real estate 1,579 519 Total $ 10,736 $ 8,702 |
Unsettled Fair Value of Future Contracts | Unsettled Fair Value of Futures Contracts 1 $ in millions At December 31, 2017 At December 31, 2016 Customer and other receivables, net $ 831 $ 610 These contracts are primarily Level 1, actively traded , valued based on quoted prices from the exchange and are excluded from the previous recurring fair value tables . |
Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2017 $ in millions Beginning Balance at December 31, 2016 Realized and Unrealized Gains (Losses) Purchases 1 Sales and Issuances 2 Settlements 1 Net Transfers Ending Balance at December 31, 2017 Unrealized Gains (Losses) Assets at fair value Trading assets: U.S. Treasury and agency securities $ 74 $ (1) $ — $ (240) $ — $ 167 $ — $ — Other sovereign government obligations 6 — — (5) — — 1 — State and municipal securities 250 3 6 (83) — (168) 8 — MABS 217 47 289 (158) (37) 65 423 (7) Corporate bonds 232 22 381 (218) — 39 456 (4) CDO 63 22 40 (31) (9) (1) 84 15 Loans and lending commitments 5,122 182 3,616 (1,561) (1,463) 49 5,945 131 Other debt 180 38 66 (171) — 48 161 12 Corporate equities 446 (54) 173 (632) — 233 166 (6) Net derivative and other contracts 3 : Interest rate 420 322 29 (18) 608 (143) 1,218 341 Credit (373) (43) — (1) 455 3 41 (18) Foreign exchange (43) (108) — (1) 31 9 (112) (89) Equity 184 136 988 (524) 396 28 1,208 159 Commodity and other 1,600 515 24 (57) (343) (293) 1,446 20 Total net derivative and other contracts 1,788 822 1,041 (601) 1,147 (396) 3,801 413 Investments 958 96 102 (57) (78) (1) 1,020 88 Liabilities at fair value Deposits $ 42 $ (3) $ — $ 12 $ (3) $ (7) $ 47 $ (3) Trading liabilities: Corporate and other debt 36 — (63) 11 — 19 3 — Corporate equities 35 1 (76) 9 — 55 22 — Securities sold under agreements to repurchase 149 — — 1 — — 150 — Other secured financings 434 (35) — 64 (251) (43) 239 (28) Borrowings 2,014 (196) — 1,968 (424) (770) 2,984 (173) Loan originations and consolid ations of VIEs are included in P urchases and deconsolid ations of VIEs are included in S ettlements. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and B orrowings primarily represent issuances. Amounts for other line items primarily represent sales. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts . Amounts are presen ted before counterparty netting. Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2016 $ in millions Beginning Balance at December 31, 2015 Realized and Unrealized Gains (Losses) Purchases 1 Sales and Issuances 2 Settlements 1 Net Transfers Ending Balance at December 31, 2016 Unrealized Gains (Losses) Assets at fair value Trading assets: U.S. Treasury and agency securities $ — $ (4) $ 72 $ — $ — $ 6 $ 74 $ (4) Other sovereign government obligations 4 1 4 (7) — 4 6 — State and municipal securities 19 — 249 (18) — — 250 — MABS 438 (69) 82 (323) — 89 217 (77) Corporate bonds 267 9 310 (357) — 3 232 (20) CDO 430 11 14 (300) — (92) 63 (5) Loans and lending commitments 5,936 (79) 2,261 (954) (1,863) (179) 5,122 (80) Other debt 448 20 26 (51) — (263) 180 (13) Corporate equities 434 (2) 242 (154) — (74) 446 — Net derivative and other contracts 3 : Interest rate 260 529 1 — (83) (287) 420 463 Credit (844) (176) — (4) 623 28 (373) (167) Foreign exchange 141 (27) — — (220) 63 (43) (23) Equity (2,031) 539 809 (337) 1,073 131 184 376 Commodity and other 1,050 544 24 (114) (44) 140 1,600 304 Total net derivative and other contracts (1,424) 1,409 834 (455) 1,349 75 1,788 953 Investments 707 (32) 398 (75) (59) 19 958 (50) Intangible assets 5 — — — — (5) — — Liabilities at fair value Deposits $ 19 $ — $ — $ 23 $ — $ — $ 42 $ — Trading liabilities: Corporate and other debt 4 (4) (99) 145 — (18) 36 — Corporate equities 18 17 (10) 89 — (45) 35 — Securities sold under agreements to repurchase 151 2 — — — — 149 2 Other secured financings 461 (5) — 79 (45) (66) 434 (5) Borrowings 1,988 (19) — 648 (305) (336) 2,014 (30) Loan originations and consolidations of VIEs are included in P urchases and deconsolidations of VIEs are included in S ettlements. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and B orrowings primarily represent issuances. Amounts for other line items primarily represent sales. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts . Amounts are presen ted before counterparty netting. Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for 2015 $ in millions Beginning Balance at December 31, 2014 Realized and Unrealized Gains (Losses) Purchases 1 Sales and Issuances 2 Settlements 1 Net Transfers Ending Balance at December 31, 2015 Unrealized Gains (Losses) Assets at fair value Trading assets: Other sovereign government obligations $ 41 $ (1) $ 2 $ (30) $ — $ (8) $ 4 $ — State and municipal securities — 2 3 — — 14 19 2 MABS 347 (13) 226 (136) — 14 438 (20) Corporate bonds 386 (44) 374 (381) (53) (15) 267 (44) CDOs 1,152 123 325 (798) (344) (28) 430 (19) Loans and lending commitments 5,874 (42) 3,216 (207) (2,478) (427) 5,936 (76) Other debt 285 (23) 131 (5) (81) 141 448 (9) Corporate equities 272 (1) 374 (333) — 122 434 11 Net derivative and other contracts 3 : Interest rate (173) (51) 58 (54) 207 273 260 20 Credit (743) (172) 19 (121) 196 (23) (844) (179) Foreign exchange 151 53 4 (2) (18) (47) 141 52 Equity (2,165) 166 81 (311) 22 176 (2,031) 62 Commodity and other 1,146 433 35 (222) (116) (226) 1,050 402 Total net derivative and other contracts (1,784) 429 197 (710) 291 153 (1,424) 357 Investments 1,158 (1) 33 (139) (188) (156) 707 (1) Intangible assets 6 — — — (1) — 5 — Liabilities at fair value Deposits $ — $ (1) $ — $ 18 $ — $ — $ 19 $ (1) Trading liabilities: Corporate and other debt 121 5 (20) 13 (104) (1) 4 5 Corporate equities 45 79 (86) 33 — 105 18 79 Securities sold under agreements to repurchase 153 2 — — — — 151 2 Other secured financings 149 192 — 327 (232) 409 461 181 Borrowings 1,934 61 — 882 (364) (403) 1,988 52 Loan originations and consolid ations of VIEs are included in P urchases and deconsolid ations of VIEs are included in S ettlements. Amounts related to entering into Net derivative and other contracts, Deposits, Other secured financings and B orrowings primarily represent issuances. Amounts for other line items primarily represent sales. Net derivative and other contracts represent Trading assets—Derivative and other contracts, net of Trading liabilities—Derivative and other contracts . Amounts are presen ted before counterparty netting. |
Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements | Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements Predominant Valuation Techniques/ Significant Unobservable Inputs Range (Weighted Average or Simple Average/Median) 1 $ in millions, except inputs At December 31, 2017 At December 31, 2016 Recurring Fair Value Measurement Assets at fair value U.S. Treasury and agency securities ($— and $74) Comparable pricing: Comparable bond price N/A 96 to 105 points (102 points) State and municipal securities ($8 and $250) Comparable pricing: Comparable bond price N/M 53 to 100 points (91 points) MABS ($423 and $217) Comparable pricing: Comparable bond price 0 to 95 points (26 points) 0 to 86 points (27 points) Predominant Valuation Techniques/ Significant Unobservable Inputs Range (Weighted Average or Simple Average/Median) 1 $ in millions, except inputs At December 31, 2017 At December 31, 2016 Corporate bonds ($456 and $232) Comparable pricing: Comparable bond price 3 to 134 points (59 points) 3 to 130 points (70 points) Discounted cash flow: Recovery rate 6% to 36% (27%) N/A CDO ($84 and $63) Comparable pricing: Comparable bond price 16 to 101 points (67 points) 0 to 103 points (50 points) Loans and lending commitments ($5,945 and $5,122) Expected recovery: Asset coverage N/M 43% to 100% (83%) Margin loan model: Discount rate 0% to 3% (1%) 2% to 8% (3%) Volatility skew 7% to 41% (22%) 21% to 63% (33%) Comparable pricing: Comparable loan price 55 to 102 points (95 points) 45 to 100 points (84 points) Discounted cash flow: WACC N/M 5% Capitalization rate N/M 4% to 10% (4%) Other debt ($161 and $180) Option model: At the money volatility 17% to 52% (52%) 16% to 52% (52%) Discounted cash flow: Discount rate 7% to 20% (14%) 7% to 12% (11%) Comparable pricing: Comparable loan price N/M 1 to 74 points (23 points) Corporate equities ($166 and $446) Comparable pricing: Comparable equity price 100% 100% Net derivative and other contracts 2 : Interest rate ($1,218 and $420) Option model: Interest rate - Foreign exchange correlation N/M 28% to 58% (44% / 43%) Interest rate volatility skew 31% to 97% (41% / 47%) 19% to 117% (55% / 56%) Interest rate quanto correlation N/M -17% to 31% (1% / -5%) Interest rate curve correlation N/M 28% to 96% (68% / 72%) Inflation volatility 23% to 63% (44% / 41%) 23% to 55% (40% / 39%) Interest rate curve 2% N/M Credit ($41 and $(373)) Comparable pricing: Cash synthetic basis 12 to 13 points (12 points) 5 to 12 points (11 points) Comparable bond price 0 to 75 points (25 points) 0 to 70 points (23 points) Correlation model: Credit correlation 38% to 100% (48%) 32% to 70% (45%) Foreign exchange 3 ( $(112) and $(43)) Option model: Interest rate - Foreign exchange correlation 54% to 57% (56% / 56%) 28% to 58% (44% / 43%) Interest rate volatility skew 31% to 97% (41% / 47%) 34% to 117% (55% / 56%) Contingency probability 95% to 100% (96% / 95%) N/M Interest rate quanto correlation N/M -17% to 31% (1% / -5%) Equity 3 ( $1,208 and $184) Option model: At the money volatility 7% to 54% (32%) 7% to 66% (33%) Volatility skew -5% to 0% (-1%) -4% to 0% (-1%) Equity - Equity correlation 5% to 99% (76%) 25% to 99% (73%) Equity - Foreign exchange correlation -55% to 40% (36%) -63% to 30% (-43%) Equity - Interest rate correlation -7% to 49% (18% / 20%) -8% to 52% (12% / 4%) Commodity and other ($1,446 and $1,600) Option model: Forward power price $4 to $102 ($31) per MWh $7 to $90 ($32) per MWh Commodity volatility 7% to 205% (17%) 6% to 130% (18%) Cross-commodity correlation 5% to 99% (92%) 5% to 99% (92%) Investments ($1,020 and $958) Discounted cash flow: WACC 8% to 15% (9%) 10% Exit multiple 8 to 11 times (10 times) 10 to 24 times (11 times) Market approach: EBITDA multiple 6 to 25 times (11 times) 6 to 24 times (12 times) Comparable pricing: Comparable equity price 45% to 100% (92%) 75% to 100% (93%) Predominant Valuation Techniques/ Significant Unobservable Inputs Range (Weighted Average or Simple Average/Median) 1 $ in millions, except inputs At December 31, 2017 At December 31, 2016 Liabilities at Fair Value Securities sold under agreements to repurchase ($150 and $149) Discounted cash flow: Funding spread 107 to 126 bps (120 bps) 118 to 127 bps (121 bps) Other secured financings ($239 and $434) Discounted cash flow: Funding spread 39 to 76 bps (57 bps) 63 to 92 bps (78 bps) Option model: Volatility skew -1% -1% At the money volatility 10% to 40% (26%) N/M Discounted cash flow: Discount rate N/M 4% Borrowings ($2,984 and $2,014) Option model: At the money volatility 5% to 35% (22%) 7% to 42% (30%) Volatility skew -2% to 0% (0%) -2% to 0% (-1%) Equity - Equity correlation 39% to 95% (86%) 35% to 99% (84%) Equity - Foreign exchange correlation -55% to 10% (-18%) -63% to 13% (-40%) Option model: Equity volatility discount N/M 7% to 11% (10% / 10%) Nonrecurring Fair Value Measurement Assets at fair value Loans ($924 and $2,443) Corporate loan model: Credit spread 93 to 563 bps (239 bps) 90 to 487 bps (208 bps) Expected recovery: Asset coverage 95% to 99% (95%) 73% to 99% (97%) Points—Percentage of par A mounts represent weighted averages except where simple averages and the median of the inputs are provided when more relevant . CVA and FVA are included in the balance but excluded from the Valuation Technique(s) and Significant Unobservable Inputs . 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 . Includes derivative contracts with multiple r isks ( i.e. , hybrid products). |
Fair Value of Investments Measured at Net Asset Value | Investments in Certain Funds Measured at NAV per Share At December 31, 2017 At December 31, 2016 $ in millions Fair Value Commitment Fair Value Commitment Private equity $ 1,674 $ 308 $ 1,566 $ 335 Real estate 800 183 1,103 136 Hedge 1 90 4 147 4 Total $ 2,564 $ 495 $ 2,816 $ 475 Investments in hedge funds may be subject to initial period lock-up or gate provisions, which restrict an investor from withdrawing from the fund during a certain initial period or restrict the redemption amount on any redemption date, respectively. Nonredeemable Funds by Contractual Maturity Fair Value at December 31, 2017 $ in millions Private Equity Real Estate Less than 5 years $ 473 $ 62 5-10 years 1,033 499 Over 10 years 168 239 Total $ 1,674 $ 800 |
Earnings Impact of Instruments under the Fair Value Option | Earnings Impact of Instruments under the Fair Value Option Interest Trading Income Net $ in millions Revenues (Expense) Revenues 2017 Securities purchased under agreements to resell $ (2) $ 3 $ 1 Deposits (3) ─ (3) Securities sold under agreements to repurchase 1 10 (18) (8) Borrowings 1 (4,507) (443) (4,950) 2016 Securities purchased under agreements to resell $ (3) $ 7 $ 4 Deposits (1) (1) (2) Securities sold under agreements to repurchase 1 6 (13) (7) Borrowings 1 (707) (483) (1,190) 2015 Securities purchased under agreements to resell $ (6) $ 10 $ 4 Securities sold under agreements to repurchase 1 13 (6) 7 Borrowings 1 2,467 (528) 1,939 1 . In 2017 and 2016, unrealized DVA gains (losses) are recorded in OCI and , when realized, in Trading revenues . In 2015, realized and unrealized DVA gains (losses) were recorded in Trading revenues. Se e Note 15 for further information. |
Gains (Losses) Due to Changes in Instrument-Specific Credit Risk | Gains (Losses) Due to Changes in Instrument-Specific Credit Risk $ in millions Trading Revenues OCI 2017 Loans and other debt 1 $ 159 $ ─ Lending commitments 2 (2) ─ Securities sold under agreements to repurchase 3 ─ (7) Borrowings 3 (12) (903) 2016 Loans and other debt 1 $ (71) $ ─ Lending commitments 2 4 ─ Borrowings 3 31 (460) 2015 Loans and other debt 1 $ (193) $ ─ Lending commitments 2 12 ─ Borrowings 3 618 ─ $ in millions At December 31, 2017 At December 31, 2016 Cumulative pre-tax DVA gain (loss) recognized in AOCI $ (1,831) $ (921) 1 . Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses. 2 . Gains (losses) on lending commitments were generally determined based on the differen ce between estimated expected client yields and contractual yields at each respective period-end . 3 . In 2017 and 2016, u nrealized DVA gains (losses) are recorded in OCI and , when realized, in Trading revenues . In 2015, realized and unrealized DVA gains (losses) were recorded in Trading revenues. Se e Note 15 for further information. |
Borrowings Measured at Fair Value on a Recurring Basis | Borrowings Measured at Fair Value on a Recurring Basis At At December 31, December 31, $ in millions 2017 2016 Business Unit Responsible for Risk Management Equity $ 25,903 $ 21,066 Interest rates 19,230 16,051 Foreign exchange 666 1,114 Credit 815 647 Commodities 298 264 Total $ 46,912 $ 39,142 |
Excess of Contractual Principal Amount Over Fair Value | Excess of Contractual Principal Amount Over Fair Value At At December 31, December 31, $ in millions 2017 2016 Loans and other debt 1 $ 13,481 $ 13,495 Loans 90 or more days past due and/or on nonaccrual status 1 11,253 11,502 Borrowings 2 71 720 1. The majority of the difference between principal and fair value amounts for loans and other debt relates to distressed debt positions purchased at amounts well below par. 2. B orrowings do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in a reference price or index |
Fair Value Loans on Nonaccrual Status | Fair Value Loans on Nonaccrual Status At At December 31, December 31, $ in millions 2017 2016 Nonaccrual loans $ 1,240 $ 1,536 Nonaccrual loans 90 or more days past due $ 779 $ 787 |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | Carrying and Fair Values At December 31, 2017 Fair Value $ in millions Level 2 Level 3 1 Total Assets Loans $ 1,394 $ 924 $ 2,318 Other assets—Other investments ─ 144 144 Total $ 1,394 $ 1,068 $ 2,462 Liabilities Other liabilities and accrued expenses— Lending commitments $ 158 $ 38 $ 196 Total $ 158 $ 38 $ 196 At December 31, 2016 Fair Value $ in millions Level 2 Level 3 1 Total Assets Loans $ 2,470 $ 2,443 $ 4,913 Other assets—Other investments ─ 123 123 Other assets—Premises, equipment and software costs 22 3 25 Total $ 2,492 $ 2,569 $ 5,061 Liabilities Other liabilities and accrued expenses— Lending commitments $ 166 $ 60 $ 226 Total $ 166 $ 60 $ 226 For significant Level 3 balances, r efer to “Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements” section herein for details of the significant unobservable inputs used for nonrecurring fair value measurement. Gains (Losses) 1 $ in millions 2017 2016 2015 Assets Loans 2 $ 18 $ 40 $ (220) Other assets—Other investments 3 (66) (52) (3) Other assets—Premises, equipment and software costs 4 (25) (76) (44) Intangible assets 5 ─ (2) ─ Other assets 6 ─ ─ (22) Total $ (73) $ (90) $ (289) Liabilities Other liabilities and accrued expenses — Lending commitments 2 $ 75 $ 121 $ (207) Total $ 75 $ 121 $ (207) Gains and losses for Loans and Other assets—Other investments are classified in Other revenues. For other items, gains and losses are recorded in Other revenues if the item is held for sale, otherwise in Other expenses. Non recurring changes in the fair value of loans and lending commitments were calculated as follows: for the held for investment category, based on the value of the underlying collateral; and for the held for sale category, based on recently executed transactions, market price quotations, valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and CDS spread levels adjusted for any basis difference between cash and derivative instruments, or default recovery analysis where such transactions and quotations are unobservable. Losses related to Other assets— Other investments were determined using techniques that included discounted cash flow models, methodologies that incorporate multiples of certain comparable companies a nd recently executed transactions. Losses related to Other assets—Premises, equipment and software costs were determined using techniques that included a default recovery analysis and recently executed transactions . Losses related to Intangible assets were determined using techniques that included discounted cash flow models and methodologies that incorporate multiples of certain comparable companies. Losses related to Other assets were determined primarily using a default recovery analysis. |
Financial Instruments Not Measured at Fair Value | At December 31, 2017 Carrying Fair Value $ in millions Value Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents: Cash and due from banks $ 24,816 $ 24,816 $ — $ — $ 24,816 Interest bearing deposits with banks 21,348 21,348 — — 21,348 Restricted cash 34,231 34,231 — — 34,231 Investment securities— HTM 23,599 11,119 11,673 289 23,081 Securities purchased under agreements to resell 84,258 — 78,239 5,978 84,217 Securities borrowed 124,010 — 124,018 1 124,019 Customer and other receivables 1 51,269 — 47,159 3,984 51,143 Loans 2 104,126 — 21,290 82,928 104,218 Other assets 433 — 433 — 433 Financial Liabilities Deposits $ 159,232 $ — $ 159,232 $ — $ 159,232 Securities sold under agreements to repurchase 55,624 — 51,752 3,867 55,619 Securities loaned 13,592 — 13,191 401 13,592 Other secured financings 7,408 — 5,987 1,431 7,418 Customer and other payables 1 188,464 — 188,464 — 188,464 Borrowings 145,670 — 151,692 30 151,722 At December 31, 2016 Carrying Fair Value $ in millions Value Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents: Cash and due from banks $ 22,017 $ 22,017 $ — $ — $ 22,017 Interest bearing deposits with banks 21,364 21,364 — — 21,364 Restricted cash 33,979 33,979 — — 33,979 Investment securities— HTM 16,922 5,557 10,896 — 16,453 Securities purchased under agreements to resell 101,653 — 97,825 3,830 101,655 Securities borrowed 125,236 — 125,093 147 125,240 Customer and other receivables 1 41,679 — 36,962 4,575 41,537 Loans 2 94,248 — 20,906 74,121 95,027 Financial Liabilities Deposits $ 155,800 $ — $ 155,800 $ — $ 155,800 Securities sold under agreements to repurchase 53,899 — 50,941 2,972 53,913 Securities loaned 15,844 — 15,853 — 15,853 Other secured financings 6,077 — 4,792 1,290 6,082 Customer and other payables 1 187,497 — 187,497 — 187,497 Borrowings 126,574 — 130,361 51 130,412 Accrued interest, fees, and dividend receivables and payables where carrying value approximates fair value have been excluded. Amounts include loans measured at fair value on a non recurring basis . |
Lending Commitments-Held for Investment and Held for Sale | Lending Commitments—Held for Investment and Held for Sale Commitment Fair Value $ in millions Amount 1 Level 2 Level 3 Total December 31, 2017 $ 100,151 $ 620 $ 174 $ 794 December 31, 2016 97,409 973 268 1,241 For further discussion on lending commitments, see Note 12 . |
Derivative Instruments and He35
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Asset Fair Values | Derivative Fair Values At December 31, 2017 Assets $ in millions Bilateral OTC Cleared OTC 1 Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 1,057 $ — $ — $ 1,057 Foreign exchange contracts 57 6 — 63 Total 1,114 6 — 1,120 Not designated as accounting hedges Interest rate contracts 177,948 1,700 234 179,882 Credit contracts 5,740 2,282 — 8,022 Foreign exchange contracts 52,878 798 58 53,734 Equity contracts 24,452 — 20,538 44,990 Commodity and other contracts 8,861 — 1,802 10,663 Total 269,879 4,780 22,632 297,291 Total gross derivatives $ 270,993 $ 4,786 $ 22,632 $ 298,411 Amounts offset Counterparty netting (201,051) (3,856) (19,861) (224,768) Cash collateral netting (42,141) (689) — (42,830) Total in Trading assets $ 27,801 $ 241 $ 2,771 $ 30,813 Amounts not offset 2 Financial instruments collateral (12,363) — — (12,363) Other cash collateral (4) — — (4) Net amounts 3 $ 15,434 $ 241 $ 2,771 $ 18,446 Derivative assets not subject to legally enforceable master netting or collateral agreements 3 $ 3,154 At December 31, 2016 Assets $ in millions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 1,924 $ 1,049 $ — $ 2,973 Foreign exchange contracts 249 18 — 267 Total 2,173 1,067 — 3,240 Not designated as accounting hedges Interest rate contracts 200,336 99,217 384 299,937 Credit contracts 9,837 2,392 — 12,229 Foreign exchange contracts 73,645 1,022 231 74,898 Equity contracts 20,710 — 17,919 38,629 Commodity and other contracts 9,792 — 3,727 13,519 Total 314,320 102,631 22,261 439,212 Total gross derivatives $ 316,493 $ 103,698 $ 22,261 $ 442,452 Amounts offset Counterparty netting (243,488) (100,477) (19,607) (363,572) Cash collateral netting (45,875) (1,799) — (47,674) Total in Trading assets $ 27,130 $ 1,422 $ 2,654 $ 31,206 Amounts not offset 2 Financial instruments collateral (10,293) — — (10,293) Other cash collateral (124) — — (124) Net amounts 3 $ 16,713 $ 1,422 $ 2,654 $ 20,789 Derivative assets not subject to legally enforceable master netting or collateral agreements 3 $ 3,656 Effective in the first quarter of 2017, the Chicago Mercantile Exchange amended its rulebook for cleared OTC derivatives, resulting in the characterization of variation margin transfers as settlement payments as opposed to cash posted as collateral. In the quarter of adoption, the cleared OTC gross derivative assets and liabilities, and related counterparty and cash collateral netting amounts in total decreased by approximately $ 13 billion and $ 20 billion, respectively. Effective in the third quarter of 2017, derivatives cleared through LCH Clearnet Limited became subject to the rulebook under which variation margin transfers are settlement payments. As a result, cleared OTC gross derivative assets and liabilities, and related counterparty and cash collat eral netting amounts in total decreased by approximately $ 62 billion and $ 59 billion, respectively. Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of defau lt but where certain other criteria are not met in accordance with applicable offsetting accounting guidance . 3 . Net amounts include transactions that are either not subject to master netting agreements or collateral agreements , or are subject to such agre ements but the Firm has not determined the agreements to be legally enforceable. |
Derivative Liability Fair Values | Liabilities $ in millions Bilateral OTC Cleared OTC 1 Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 67 $ 1 $ — $ 68 Foreign exchange contracts 72 57 — 129 Total 139 58 — 197 Not designated as accounting hedges Interest rate contracts 161,758 1,178 144 163,080 Credit contracts 6,273 2,272 — 8,545 Foreign exchange contracts 54,191 925 23 55,139 Equity contracts 27,993 — 19,996 47,989 Commodity and other contracts 7,117 — 1,772 8,889 Total 257,332 4,375 21,935 283,642 Total gross derivatives $ 257,471 $ 4,433 $ 21,935 $ 283,839 Amounts offset Counterparty netting (201,051) (3,856) (19,861) (224,768) Cash collateral netting (31,892) (484) — (32,376) Total in Trading liabilities $ 24,528 $ 93 $ 2,074 $ 26,695 Amounts not offset 2 Financial instruments collateral (5,523) — (412) (5,935) Other cash collateral (18) (14) — (32) Net amounts 3 $ 18,987 $ 79 $ 1,662 $ 20,728 Derivative liabilities not subject to legally enforceable master netting or collateral agreements 3 $ 3,751 Liabilities $ in millions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 77 $ 647 $ — $ 724 Foreign exchange contracts 15 25 — 40 Total 92 672 — 764 Not designated as accounting hedges Interest rate contracts 183,063 103,392 397 286,852 Credit contracts 11,024 2,401 — 13,425 Foreign exchange contracts 74,575 952 16 75,543 Equity contracts 22,531 — 17,983 40,514 Commodity and other contracts 8,303 — 3,582 11,885 Total 299,496 106,745 21,978 428,219 Total gross derivatives $ 299,588 $ 107,417 $ 21,978 $ 428,983 Amounts offset Counterparty netting (243,488) (100,477) (19,607) (363,572) Cash collateral netting (30,405) (5,691) — (36,096) Total in Trading liabilities $ 25,695 $ 1,249 $ 2,371 $ 29,315 Amounts not offset 2 Financial instruments collateral (7,638) — (585) (8,223) Other cash collateral (10) (1) — (11) Net amounts 3 $ 18,047 $ 1,248 $ 1,786 $ 21,081 Derivative liabilities not subject to legally enforceable master netting or collateral agreements 3 $ 3,497 Effective in the first quarter of 2017, the Chicago Mercantile Exchange amended its rulebook for cleared OTC derivatives, resulting in the characterization of variation margin transfers as settlement payments as opposed to cash posted as collateral. In the quarter of adoption, the cleared OTC gross derivative assets and liabilities, and related counterparty and cash collateral netting amounts in total decreased by approximately $ 13 billion and $ 20 billion, respectively. Effective in the third quarter of 2017, derivatives cleared through LCH Clearnet Limited became subject to the rulebook under which variation margin transfers are settlement payments. As a result, cleared OTC gross derivative assets and liabilities, and related counterparty and cash collat eral netting amounts in total decreased by approximately $ 62 billion and $ 59 billion, respectively. Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of defau lt but where certain other criteria are not met in accordance with applicable offsetting accounting guidance . 3 . Net amounts include transactions that are either not subject to master netting agreements or collateral agreements , or are subject to such agre ements but the Firm has not determined the agreements to be legally enforceable. |
Derivative Notionals | Derivative Notionals At December 31, 2017 Assets $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 20 $ 46 $ — $ 66 Foreign exchange contracts 4 — — 4 Total 24 46 — 70 Not designated as accounting hedges Interest rate contracts 3,999 6,458 2,714 13,171 Credit contracts 194 100 — 294 Foreign exchange contracts 1,960 67 9 2,036 Equity contracts 397 — 334 731 Commodity and other contracts 86 — 72 158 Total 6,636 6,625 3,129 16,390 Total gross derivatives $ 6,660 $ 6,671 $ 3,129 $ 16,460 Liabilities $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 2 $ 102 $ — $ 104 Foreign exchange contracts 4 2 — 6 Total 6 104 — 110 Not designated as accounting hedges Interest rate contracts 4,199 6,325 1,089 11,613 Credit contracts 226 80 — 306 Foreign exchange contracts 2,014 78 51 2,143 Equity contracts 394 — 405 799 Commodity and other contracts 68 — 61 129 Total 6,901 6,483 1,606 14,990 Total gross derivatives $ 6,907 $ 6,587 $ 1,606 $ 15,100 At December 31, 2016 Assets $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 30 $ 38 $ — $ 68 Foreign exchange contracts 6 — — 6 Total 36 38 — 74 Not designated as accounting hedges Interest rate contracts 3,586 6,224 2,586 12,396 Credit contracts 333 112 — 445 Foreign exchange contracts 1,580 52 13 1,645 Equity contracts 338 — 242 580 Commodity and other contracts 67 — 79 146 Total 5,904 6,388 2,920 15,212 Total gross derivatives $ 5,940 $ 6,426 $ 2,920 $ 15,286 Liabilities $ in billions Bilateral OTC Cleared OTC Exchange-Traded Total Designated as accounting hedges Interest rate contracts $ 2 $ 52 $ — $ 54 Foreign exchange contracts 1 1 — 2 Total 3 53 — 56 Not designated as accounting hedges Interest rate contracts 3,462 6,087 897 10,446 Credit contracts 359 96 — 455 Foreign exchange contracts 1,557 48 14 1,619 Equity contracts 321 — 273 594 Commodity and other contracts 78 — 59 137 Total 5,777 6,231 1,243 13,251 Total gross derivatives $ 5,780 $ 6,284 $ 1,243 $ 13,307 |
Gains (Losses) on Accounting Hedges | Gains (Losses) on Accounting Hedges $ in millions 2017 2016 2015 Fair Value Hedges - Recognized in Interest Expense Derivatives $ (1,591) $ (1,738) $ (700) Borrowings 1,393 1,541 461 Total $ (198) $ (197) $ (239) Net Investment Hedges - Foreign exchange contracts Effective portion—OCI $ (365) $ (1) $ 434 Forward points excluded from hedge effectiveness testing—Interest income $ (20) $ (74) $ (149) |
Trading Revenues by Product Type | Trading Revenues by Product Type $ in millions 2017 2016 2015 Interest rate contracts $ 2,091 $ 1,522 $ 1,249 Foreign exchange contracts 647 1,156 984 Equity security and index contracts 1 6,291 5,690 5,695 Commodity and other contracts 740 56 793 Credit contracts 1,347 1,785 775 Subtotal $ 11,116 $ 10,209 $ 9,496 DVA 2 — — 618 Total $ 11,116 $ 10,209 $ 10,114 Dividend income is included within equity security and index contracts . In 2017 and 2016, 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) are recorded within OCI in the comprehensive income statements. In 2015, the DVA gains (losses) were recorded within Trading revenues in the income statements. See note 15 for further information . |
Credit Risk-Related Contingencies | Net Derivative Liabilities and Collateral Posted At At December 31, December 31, $ in millions 2017 2016 Net derivative liabilities with credit risk-related contingent features $ 20,675 $ 22,939 Collateral posted 16,642 17,040 Incremental Collateral or Termination Payments upon Potential Future Ratings Downgrade At December 31, $ in millions 2017 One-notch downgrade $ 635 Two-notch downgrade 382 Bilateral downgrade agreements included in the amounts above 1 $ 823 1. Amount represents 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 downg rade arrangements are used by the Firm to manage the risk of counterparty downgrades. |
Credit Derivatives and Other Credit Contracts | Protection Sold and Purchased with CDSs At December 31, 2017 Protection Sold Protection Purchased $ in millions Notional Fair Value (Asset)/ Liability Notional Fair Value (Asset)/ Liability Single name $ 146,948 $ (1,277) $ 164,773 $ 1,658 Index and basket 131,073 (341) 120,348 209 Tranched index and basket 11,864 (342) 24,498 616 Total $ 289,885 $ (1,960) $ 309,619 $ 2,483 Single name and non-tranched index and basket with identical underlying reference obligations $ 274,473 $ — $ 281,162 $ — At December 31, 2016 Protection Sold Protection Purchased $ in millions Notional Fair Value (Asset)/ Liability Notional Fair Value (Asset)/ Liability Single name $ 266,918 $ (753) $ 269,623 $ 826 Index and basket 130,383 374 122,061 (481) Tranched index and basket 32,429 (670) 78,505 1,900 Total $ 429,730 $ (1,049) $ 470,189 $ 2,245 Single name and non-tranched index and basket with identical underlying reference obligations $ 395,536 $ — $ 389,221 $ — Credit Ratings of Reference Obligation and Maturities of Credit Protection Sold At December 31, 2017 Maximum Potential Payout/Notional Fair Value Years to Maturity (Asset)/ $ in millions Less than 1 1-3 3-5 Over 5 Total Liability Single name CDSs Investment grade $ 39,721 $ 42,591 $ 18,157 $ 8,872 $ 109,341 $ (1,167) Non-investment grade 14,213 16,293 6,193 908 37,607 (110) Total single name CDSs 53,934 58,884 24,350 9,780 146,948 (1,277) Index and basket CDSs Investment grade 29,046 15,418 37,343 6,807 88,614 (1,091) Non-investment grade 5,246 7,371 32,417 9,289 54,323 408 Total index and basket CDSs 34,292 22,789 69,760 16,096 142,937 (683) Total CDSs sold $ 88,226 $ 81,673 $ 94,110 $ 25,876 $ 289,885 $ (1,960) Other credit contracts 2 — — 134 136 16 Total credit derivatives and other credit contracts $ 88,228 $ 81,673 $ 94,110 $ 26,010 $ 290,021 $ (1,944) At December 31, 2016 Maximum Potential Payout/Notional Fair Value Years to Maturity (Asset)/ $ in millions Less than 1 1-3 3-5 Over 5 Total Liability Single name CDSs Investment grade $ 79,449 $ 70,796 $ 34,529 $ 10,293 $ 195,067 $ (1,060) Non-investment grade 34,571 25,820 10,436 1,024 71,851 307 Total single name CDSs $ 114,020 $ 96,616 $ 44,965 $ 11,317 $ 266,918 $ (753) Index and basket CDSs Investment grade $ 26,530 $ 21,388 $ 35,060 $ 9,096 $ 92,074 $ (846) Non-investment grade 26,135 22,983 11,759 9,861 70,738 550 Total index and basket CDSs $ 52,665 $ 44,371 $ 46,819 $ 18,957 $ 162,812 $ (296) Total CDSs sold $ 166,685 $ 140,987 $ 91,784 $ 30,274 $ 429,730 $ (1,049) Other credit contracts 49 6 — 215 270 — Total credit derivatives and other credit contracts $ 166,734 $ 140,993 $ 91,784 $ 30,489 $ 430,000 $ (1,049) |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investment securities | |
Schedule of AFS and HTM Securities | AFS and HTM Securities At December 31, 2017 $ in millions Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 26,842 $ — $ 589 $ 26,253 U.S. agency securities 1 22,803 28 247 22,584 Total U.S. government and agency securities 49,645 28 836 48,837 Corporate and other debt: CMBS: Agency 1,370 2 49 1,323 Non-agency 1,102 — 8 1,094 Corporate bonds 1,379 5 12 1,372 CLO 398 1 — 399 FFELP student loan ABS 2 2,165 15 7 2,173 Total corporate and other debt 6,414 23 76 6,361 Total AFS debt securities 56,059 51 912 55,198 AFS equity securities 15 — 10 5 Total AFS securities 56,074 51 922 55,203 HTM securities U.S. government and agency securities: U.S. Treasury securities 11,424 — 305 11,119 U.S. agency securities 1 11,886 7 220 11,673 Total U.S. government and agency securities 23,310 7 525 22,792 Corporate and other debt: CMBS: Non-agency 289 1 1 289 Total corporate and other debt 289 1 1 289 Total HTM securities 23,599 8 526 23,081 Total investment securities $ 79,673 $ 59 $ 1,448 $ 78,284 At December 31, 2016 $ in millions Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 28,371 $ 1 $ 545 $ 27,827 U.S. agency securities 1 22,348 14 278 22,084 Total U.S. government and agency securities 50,719 15 823 49,911 Corporate and other debt: CMBS: Agency 1,850 2 44 1,808 Non-agency 2,250 11 16 2,245 Auto loan ABS 1,509 1 1 1,509 Corporate bonds 3,836 7 22 3,821 CLO 540 — 1 539 FFELP student loan ABS 2 3,387 5 61 3,331 Total corporate and other debt 13,372 26 145 13,253 Total AFS debt securities 64,091 41 968 63,164 AFS equity securities 15 — 9 6 Total AFS securities 64,106 41 977 63,170 HTM securities U.S. government and agency securities: U.S. Treasury securities 5,839 1 283 5,557 U.S. agency securities 1 11,083 1 188 10,896 Total HTM securities 16,922 2 471 16,453 Total investment securities $ 81,028 $ 43 $ 1,448 $ 79,623 U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and CMO s . 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 December 31, 2017 Less than 12 Months 12 Months or Longer Total $ in millions Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 21,941 $ 495 $ 4,287 $ 94 $ 26,228 $ 589 U.S. agency securities 12,673 192 2,513 55 15,186 247 Total U.S. government and agency securities 34,614 687 6,800 149 41,414 836 Corporate and other debt: CMBS: Agency 930 49 — — 930 49 Non-agency 257 1 559 7 816 8 Corporate bonds 316 3 389 9 705 12 FFELP student loan ABS 984 7 — — 984 7 Total corporate and other debt 2,487 60 948 16 3,435 76 Total AFS debt securities 37,101 747 7,748 165 44,849 912 AFS equity securities — — 5 10 5 10 Total AFS securities 37,101 747 7,753 175 44,854 922 HTM securities U.S. government and agency securities: U.S. Treasury securities 6,608 86 4,512 219 11,120 305 U.S. agency securities 2,879 24 7,298 196 10,177 220 Total U.S. government and agency securities 9,487 110 11,810 415 21,297 525 Corporate and other debt: CMBS: Non-agency 124 1 — — 124 1 Total corporate and other debt 124 1 — — 124 1 Total HTM securities 9,611 111 11,810 415 21,421 526 Total investment securities $ 46,712 $ 858 $ 19,563 $ 590 $ 66,275 $ 1,448 At December 31, 2016 Less than 12 Months 12 Months or Longer Total $ in millions Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses AFS debt securities U.S. government and agency securities: U.S. Treasury securities $ 25,323 $ 545 $ — $ — $ 25,323 $ 545 U.S. agency securities 16,760 278 125 — 16,885 278 Total U.S. government and agency securities 42,083 823 125 — 42,208 823 Corporate and other debt: CMBS: Agency 1,245 44 — — 1,245 44 Non-agency 763 11 594 5 1,357 16 Auto loan ABS 659 1 123 — 782 1 Corporate bonds 2,050 21 142 1 2,192 22 CLO 178 — 239 1 417 1 FFELP student loan ABS 2,612 61 — — 2,612 61 Total corporate and other debt 7,507 138 1,098 7 8,605 145 Total AFS debt securities 49,590 961 1,223 7 50,813 968 AFS equity securities 6 9 — — 6 9 Total AFS securities 49,596 970 1,223 7 50,819 977 HTM securities U.S. government and agency securities: U.S. Treasury securities 5,057 283 — — 5,057 283 U.S. agency securities 10,612 188 — — 10,612 188 Total HTM securities 15,669 471 — — 15,669 471 Total investment securities $ 65,265 $ 1,441 $ 1,223 $ 7 $ 66,488 $ 1,448 |
Schedule of Investment Securities by Contractual Maturity | Investment Securities by Contractual Maturity At December 31, 2017 $ in millions Amortized Cost Fair Value Average Yield AFS debt securities U.S. government and agency securities: U.S. Treasury securities: Due within 1 year $ 6,501 $ 6,478 0.9% After 1 year through 5 years 15,195 14,901 1.5% After 5 years through 10 years 5,146 4,874 1.5% Total 26,842 26,253 U.S. agency securities: Due within 1 year 46 45 1.1% After 1 year through 5 years 2,485 2,475 0.9% After 5 years through 10 years 1,280 1,263 1.9% After 10 years 18,992 18,801 1.9% Total 22,803 22,584 Total U.S. government and agency securities 49,645 48,837 1.5% Corporate and other debt: CMBS: Agency: Due within 1 year 3 3 0.9% After 1 year through 5 years 380 379 1.4% After 5 years through 10 years 153 154 1.1% After 10 years 834 787 1.6% Total 1,370 1,323 Non-agency: After 5 years through 10 years 35 36 2.5% After 10 years 1,067 1,058 1.7% Total 1,102 1,094 Corporate bonds: Due within 1 year 46 46 1.2% After 1 year through 5 years 1,248 1,243 2.3% After 5 years through 10 years 85 83 2.4% Total 1,379 1,372 CLO: After 5 years through 10 years 200 200 1.5% After 10 years 198 199 2.4% Total 398 399 FFELP student loan ABS: After 1 year through 5 years 50 49 0.8% After 5 years through 10 years 404 401 0.8% After 10 years 1,711 1,723 1.1% Total 2,165 2,173 Total corporate and other debt 6,414 6,361 1.6% Total AFS debt securities 56,059 55,198 1.5% AFS equity securities 15 5 ― % Total AFS securities 56,074 55,203 1.5% HTM securities U.S. government securities: U.S. Treasury securities: Due within 1 year 499 496 1.2% After 1 year through 5 years 5,085 5,034 1.6% After 5 years through 10 years 5,113 4,923 1.9% After 10 years 727 666 2.3% Total 11,424 11,119 U.S. agency securities: After 10 years 11,886 11,673 2.5% Total 11,886 11,673 Total U.S. government and agency securities 23,310 22,792 2.3% Corporate and other debt: CMBS: Non-agency: After 1 year through 5 years 95 95 3.6% After 5 years through 10 years 175 175 3.8% After 10 years 19 19 4.1% Total 289 289 Total corporate and other debt 289 289 0.1% Total HTM securities 23,599 23,081 2.1% Total investment securities $ 79,673 $ 78,284 1.7% |
Schedule of Gross Realized Gains and Losses on Sales of AFS Securities | Gross Realized Gains and Losses on Sales of AFS Securities $ in millions 2017 2016 2015 Gross realized gains $ 46 $ 133 $ 116 Gross realized (losses) (11) (21) (32) Total $ 35 $ 112 $ 84 |
Collateralized Transactions (Ta
Collateralized Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Collateralized Transactions | |
Offsetting of Certain Collaterized Transactions | Offsetting of Certain Collateralized Transactions At December 31, 2017 $ in millions Gross Amounts Amounts Offset Net Amounts Presented Amounts Not Offset 1 Net Amounts Assets Securities purchased under agreements to resell $ 199,044 $ (114,786) $ 84,258 $ (78,009) $ 6,249 Securities borrowed 133,431 (9,421) 124,010 (119,358) 4,652 Liabilities Securities sold under agreements to repurchase $ 171,210 $ (114,786) $ 56,424 $ (48,067) $ 8,357 Securities loaned 23,014 (9,422) 13,592 (13,271) 321 Not subject to legally enforceable master netting agreements 2 Securities purchased under agreements to resell $ 5,687 Securities borrowed 572 Securities sold under agreements to repurchase 6,945 Securities loaned 307 At December 31, 2016 $ in millions Gross Amounts Amounts Offset Net Amounts Presented Amounts Not Offset 1 Net Amounts Assets Securities purchased under agreements to resell $ 182,888 $ (80,933) $ 101,955 $ (93,365) $ 8,590 Securities borrowed 129,934 (4,698) 125,236 (118,974) 6,262 Liabilities Securities sold under agreements to repurchase $ 135,561 $ (80,933) $ 54,628 $ (47,933) $ 6,695 Securities loaned 20,542 (4,698) 15,844 (15,670) 174 Not subject to legally enforceable master netting agreements 2 Securities purchased under agreements to resell $ 7,765 Securities borrowed 2,591 Securities sold under agreements to repurchase 6,500 Securities loaned 154 1. 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. 2. Represents amounts within Net Amounts related to transactions that 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 . |
Gross Secured Financing Balances | Maturities and Collateral Pledged Gross Secured Financing Balances by Remaining Contractual Maturity At December 31, 2017 $ in millions Overnight and Open Less than 30 Days 30-90 Days Over 90 Days Total Securities sold under agreements to repurchase $ 41,332 $ 66,593 $ 28,682 $ 34,603 $ 171,210 Securities loaned 12,130 873 1,577 8,434 23,014 Total included in the offsetting disclosure $ 53,462 $ 67,466 $ 30,259 $ 43,037 $ 194,224 Trading liabilities ― Obligation to return securities received as collateral 22,555 — — — 22,555 Total $ 76,017 $ 67,466 $ 30,259 $ 43,037 $ 216,779 At December 31, 2016 $ in millions Overnight and Open Less than 30 Days 30-90 Days Over 90 Days Total Securities sold under agreements to repurchase $ 41,549 $ 36,703 $ 24,648 $ 32,661 $ 135,561 Securities loaned 9,487 851 2,863 7,341 20,542 Total included in the offsetting disclosure $ 51,036 $ 37,554 $ 27,511 $ 40,002 $ 156,103 Trading liabilities ― Obligation to return securities received as collateral 20,262 — — — 20,262 Total $ 71,298 $ 37,554 $ 27,511 $ 40,002 $ 176,365 Gross Secured Financing Balances by Class of Collateral Pledged $ in millions At December 31, 2017 At December 31, 2016 Securities sold under agreements to repurchase U.S. government and agency securities $ 43,346 $ 56,372 State and municipal securities 2,451 1,363 Other sovereign government obligations 87,141 42,790 ABS 1,130 1,918 Corporate and other debt 7,737 9,086 Corporate equities 28,497 23,152 Other 908 880 Total $ 171,210 $ 135,561 Securities loaned U.S. government and agency securities $ 81 $ — Other sovereign government obligations 9,489 4,762 Corporate and other debt 14 73 Corporate equities 13,174 15,693 Other 256 14 Total $ 23,014 $ 20,542 Total included in the offsetting disclosure $ 194,224 $ 156,103 Trading liabilities ― Obligation to return securities received as collateral Corporate equities $ 22,555 $ 20,262 Total $ 216,779 $ 176,365 |
Carrying Value of Assets Loaned or Pledged Without Counterparty Right to Sell or Repledge | Carrying Value of Assets Loaned or Pledged without Counterparty Right to Sell or Repledge $ in millions At December 31, 2017 At December 31, 2016 Trading assets $ 31,324 $ 41,358 Loans (gross of allowance for loan losses) 228 — Total $ 31,552 $ 41,358 |
Fair Value of Collateral Received with Right to Sell or Repledge | Fair Value of Collateral Received with Right to Sell or Repledge $ in millions At December 31, 2017 At December 31, 2016 Collateral received with right to sell or repledge $ 599,244 $ 561,239 Collateral that was sold or repledged 475,113 430,911 |
Concentration Based on the Firm's Total Assets | Concentration Based on the Firm's Total Assets At December 31, 2017 At December 31, 2016 Trading assets: U.S. government and agency securities and other sovereign government obligations 1 9% 8% Collateral held for: Resale agreements and bonds borrowed 2 14% 18% Other sovereign government obligations p rincipally comprise the U.K., Japan and Brazil. C onsists of securities issued by the U.S. government, federal agencies or other so vereign government obligations. |
Customer Margin Lending and Other | Customer Margin Lending and Other $ in millions At December 31, 2017 At December 31, 2016 Net customer receivables representing margin loans $ 32,112 $ 24,359 |
Restricted Cash and Segregated Securities | Restricted Cash and Segregated Securities $ in millions At December 31, 2017 At December 31, 2016 Restricted cash $ 34,231 $ 33,979 Segregated securities 1 20,549 23,756 Total $ 54,780 $ 57,735 Securities segregated under federal regulations for the Firm’s U.S. broker-dealers are sourced from Securities purchased under agreements to resell and Trading assets in the balance sheets. |
Loans and Allowance for Credi38
Loans and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Loans Held for Investment and Held for Sale | Loans by Type At December 31, 2017 $ in millions Loans Held for Investment Loans Held for Sale Total Loans Corporate loans $ 29,754 $ 9,456 $ 39,210 Consumer loans 26,808 — 26,808 Residential real estate loans 26,635 35 26,670 Wholesale real estate loans 9,980 1,682 11,662 Total loans, gross 93,177 11,173 104,350 Allowance for loan losses (224) — (224) Total loans, net $ 92,953 $ 11,173 $ 104,126 At December 31, 2016 $ in millions Loans Held for Investment Loans Held for Sale Total Loans Corporate loans $ 25,025 $ 10,710 $ 35,735 Consumer loans 24,866 — 24,866 Residential real estate loans 24,385 61 24,446 Wholesale real estate loans 7,702 1,773 9,475 Total loans, gross 81,978 12,544 94,522 Allowance for loan losses (274) — (274) Total loans, net $ 81,704 $ 12,544 $ 94,248 Loans by Interest Rate Type At At December 31, December 31, $ in millions 2017 2016 Fixed $ 13,339 $ 11,895 Floating or adjustable 90,787 82,353 Total loans, net $ 104,126 $ 94,248 Loans to Non-U.S. Borrowers At At December 31, December 31, $ in millions 2017 2016 Loans, net of allowance $ 9,977 $ 9,388 |
Loans Held for Investment Before Allowance by Credit Quality | Loans Held for Investment before Allowance by Credit Quality At December 31, 2017 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total Pass $ 29,166 $ 26,802 $ 26,562 $ 9,480 $ 92,010 Special mention 188 6 — 200 394 Substandard 393 — 73 300 766 Doubtful 7 — — — 7 Loss — — — — — Total $ 29,754 $ 26,808 $ 26,635 $ 9,980 $ 93,177 At December 31, 2016 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total Pass $ 23,409 $ 24,853 $ 24,345 $ 7,294 $ 79,901 Special mention 288 13 — 218 519 Substandard 1,259 — 40 190 1,489 Doubtful 69 — — — 69 Loss — — — — — Total $ 25,025 $ 24,866 $ 24,385 $ 7,702 $ 81,978 |
Impaired Loans and Lending Commitments Before Allowance | Impaired Loans and Lending Commitments before Allowance At December 31, 2017 $ in millions Corporate Residential Real Estate Total Loans With allowance $ 16 $ — $ 16 Without allowance 1 118 45 163 UPB 2 146 46 192 Lending Commitments With allowance $ — $ — $ — Without allowance 1 199 — 199 At December 31, 2016 $ in millions Corporate Residential Real Estate Total Loans With allowance $ 104 $ — $ 104 Without allowance 1 206 35 241 UPB 2 316 38 354 Lending Commitments With allowance $ — $ — $ — Without allowance 1 89 — 89 At December 31, 2017 and December 31, 2016 , no allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows (or, alternatively, the observable market price of the instrument or the fair value of the collateral held) equaled or exceeded the carrying value. The impaired loans UPB 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. |
Impaired Loans and Allowance by Region | Impaired Loans and Allowance by Region At December 31, 2017 $ in millions Americas EMEA Asia Total Impaired loans $ 160 $ 9 $ 10 $ 179 Allowance for loan losses 194 27 3 224 At December 31, 2016 $ in millions Americas EMEA Asia Total Impaired loans $ 320 $ 9 $ 16 $ 345 Allowance for loan losses 245 28 1 274 |
Troubled Debt Restructurings | Troubled Debt Restructurings At At December 31, December 31, $ in millions 2017 2016 Loans $ 51 $ 67 Lending commitments 28 14 Allowance for loan losses and lending commitments 10 — |
Allowance for Loan Losses and Lending Commitments Rollforward | Allowance for Loan Losses Rollforward $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2016 $ 195 $ 4 $ 20 $ 55 $ 274 Gross charge-offs (75) — — — (75) Recoveries 1 — — — 1 Net recoveries (charge-offs) (74) — — — (74) Provision (release) 5 — 4 13 22 Other — — — 2 2 December 31, 2017 $ 126 $ 4 $ 24 $ 70 $ 224 Inherent $ 119 $ 4 $ 24 $ 70 $ 217 Specific 7 — — — 7 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2015 $ 166 $ 5 $ 17 $ 37 $ 225 Gross charge-offs (16) — (1) — (17) Gross recoveries 3 — — — 3 Net recoveries (charge-offs) (13) — (1) — (14) Provision (release) 110 (1) 4 18 131 Other 1 (68) — — — (68) December 31, 2016 $ 195 $ 4 $ 20 $ 55 $ 274 Inherent $ 133 $ 4 $ 20 $ 55 $ 212 Specific 62 — — — 62 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2014 $ 118 $ 2 $ 8 $ 21 $ 149 Gross charge-offs — — (1) — (1) Gross recoveries 1 — — — 1 Net recoveries (charge-offs) 1 — (1) — — Provision (release) 58 3 10 16 87 Other (11) — — — (11) December 31, 2015 $ 166 $ 5 $ 17 $ 37 $ 225 Inherent $ 156 $ 5 $ 17 $ 37 $ 215 Specific 10 — — — 10 The r eduction is related to loans of $ 492 million that were transferred to loans held for sale during 2016. Allowance for Lending Commitments Rollforward $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2016 $ 185 $ 1 $ — $ 4 $ 190 Provision (release) 8 — — (1) 7 Other 1 — — — 1 December 31, 2017 $ 194 $ 1 $ — $ 3 $ 198 Inherent $ 192 $ 1 $ — $ 3 $ 196 Specific 2 — — — 2 $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2015 $ 180 $ 1 $ — $ 4 $ 185 Provision (release) 13 — — — 13 Other (8) — — — (8) December 31, 2016 $ 185 $ 1 $ — $ 4 $ 190 Inherent $ 185 $ 1 $ — $ 4 $ 190 Specific — — — — — $ in millions Corporate Consumer Residential Real Estate Wholesale Real Estate Total December 31, 2014 $ 147 $ — $ — $ 2 $ 149 Provision (release) 33 1 — 2 36 December 31, 2015 $ 180 $ 1 $ — $ 4 $ 185 Inherent $ 173 $ 1 $ — $ 4 $ 178 Specific 7 — — — 7 |
Employee Loans | Employee Loans At At December 31, December 31, $ in millions 2017 2016 Balance $ 4,185 $ 4,804 Allowance for loan losses (77) (89) Balance, net $ 4,108 $ 4,715 Repayment term range, in years 1 to 20 1 to 12 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments | |
Schedule of Equity Method Investments | Equity Method Investment Balances $ in millions At December 31, 2017 At December 31, 2016 Investments $ 2,623 $ 2,837 $ in millions 2017 1 2016 2015 Income (loss) $ (34) $ (79) $ 114 Includes a $ 53 million impai rment of Investment Management business segment’s int erest in a third-party asset manager. |
MUMSS | |
Equity Method Investments | |
Schedule of Equity Method Investments | $ in millions 2017 2016 2015 Income from investment in MUMSS $ 123 $ 93 $ 220 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets | |
Goodwill Rollforward | Goodwill Rollforward $ in millions IS WM IM Total At December 31, 2015 1 $ 282 $ 5,533 $ 769 $ 6,584 Foreign currency and other (7) ─ ─ (7) At December 31, 2016 1 $ 275 $ 5,533 $ 769 $ 6,577 Foreign currency and other 20 ─ ─ 20 At December 31, 2017 1 $ 295 $ 5,533 $ 769 $ 6,597 Accumulated impairments 2 673 ─ 27 700 IS—Institutional Securities WM—Wealth Management IM—Investment Management Balances represent the amount of the Firm’s goodwill after accumulated impairments . Balances represent amounts at December 31, 2017, 2016 and 2015. |
Schedule of Intangible Assets by Business Segment | Intangible Assets by Business Segment $ in millions IS WM IM Total Amortizable intangibles $ 346 $ 2,361 $ 11 $ 2,718 Mortgage servicing rights — 3 — 3 At December 31, 2016 $ 346 $ 2,364 $ 11 $ 2,721 Amortizable intangibles $ 349 $ 2,092 $ 4 $ 2,445 Mortgage servicing rights — 3 — 3 At December 31, 2017 $ 349 $ 2,095 $ 4 $ 2,448 |
Schedule of Amortizable Intangible Assets by Type | Gross Amortizable Intangible Assets by Type At December 31, 2017 At December 31, 2016 $ in millions Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Trademarks $ 1 $ — $ 1 $ — Tradename 283 50 283 40 Customer relationships 4,059 2,193 4,059 1,939 Management contracts 503 299 467 275 Other 329 188 329 167 Total $ 5,175 $ 2,730 $ 5,139 $ 2,421 Estimated annual amortization expense for the next five years $ 301 |
Net Amortizable Intangible Assets Rollforward | Net Amortizable Intangible Assets Rollforward $ in millions IS WM IM Total At December 31, 2015 $ 327 $ 2,632 $ 20 $ 2,979 Acquired 43 — — 43 Disposals (11) — — (11) Amortization expense (11) (271) (9) (291) Impairment losses (2) — — (2) At December 31, 2016 $ 346 $ 2,361 $ 11 $ 2,718 Acquired 51 — — 51 Disposals (15) — — (15) Amortization expense (33) (269) (7) (309) At December 31, 2017 $ 349 $ 2,092 $ 4 $ 2,445 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits [Abstract] | |
Deposits | Deposits At At December 31, December 31, $ in millions 2017 2016 Savings and demand deposits $ 144,487 $ 154,559 Time deposits 14,949 1,304 Total $ 159,436 $ 155,863 Deposits subject to FDIC insurance $ 127,017 $ 127,992 Time deposits that equal or exceed the FDIC insurance limit $ 38 $ 46 |
Time Deposit Maturities | Time Deposit Maturities $ in millions At December 31, 2017 2018 $ 12,232 2019 2,481 2020 32 2021 6 2022 69 Thereafter 129 |
Borrowings and Other Secured 42
Borrowings and Other Secured Financings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Borrowings and Other Secured Financings | |
Maturities and Terms of Borrowings | Maturities and Terms of Borrowings Parent Company Subsidiaries At At Fixed Variable Fixed Variable December December $ in millions Rate Rate 1 Rate Rate 1 31, 2017 31, 2016 Original maturities of one year or less: Next 12 months $ — $ — $ — $ 1,519 $ 1,519 $ 941 Original maturities greater than one year: 2017 $ — $ — $ — $ — $ — $ 26,127 2018 13,154 5,625 14 5,077 23,870 19,292 2019 12,947 8,902 55 2,645 24,549 22,397 2020 11,175 7,668 14 2,557 21,414 16,736 2021 13,733 4,146 18 1,166 19,063 17,179 2022 6,536 8,717 17 2,316 17,586 5,338 Thereafter 56,866 17,765 201 9,749 84,581 57,706 Total $ 114,411 $ 52,823 $ 319 $ 23,510 $ 191,063 $ 164,775 Total borrowings $ 114,411 $ 52,823 $ 319 $ 25,029 $ 192,582 $ 165,716 Weighted average coupon at period-end 2 3.8% 1.8% 6.3% N/M 3.3% 3.7% 1. Variable rate borrowings bear interest based on a variety of money market indices, including LIBOR and federal funds rates. Amounts include notes carried at fair value with various payment provisions, including notes linked to equity, credit, commodity or other indices. 2 . Includes only borrowings with original maturities greater than one year. Weighted average coupon i s calculated utilizing U.S. and non-U.S. dollar interest rates and excludes financial instruments for which the fair value option was elected. Virtually all of the variable rate notes issued by subsidiaries are carried at fair value so a weighted average coupon is not meaningful. |
Increases (Decreases) in Carrying Amount of Borrowings Associated with Fair Value Hedges | Increases ( Decreases ) in Carrying Amount of Borrowings Associated with Fair Value Hedge s At December 31, $ in millions 2017 2018 $ 73 2019 150 2020 154 2021 9 2022 (96) Thereafter (595) Total $ (305) |
Borrowings with Original Maturities Greater than One Year | Borrowings with Original Maturities Greater than One Year by Type $ in millions At December 31, 2017 At December 31, 2016 Senior $ 180,835 $ 154,472 Subordinated 10,228 10,303 Total $ 191,063 $ 164,775 Weighted average stated maturity, in years 6.6 5.9 Subordinated Debt 2017 2016 Contractual weighted average coupon 4.5% 4.5% Rates for Borrow ings w ith Original Maturities Greater t han One Year At December 31, 2017 2016 2015 Contractual weighted average coupon 1 3.3% 3.7% 4.0% Effective average after swaps 2.5% 2.5% 2.1% 1. Weighted average coupon was calculated utilizing U.S. and non-U.S. dollar interest rates and excludes financial instruments for which the fair value option was elected . |
Other Secured Financings | Other Secured Financings by Original Maturity and Type At At December 31, December 31, $ in millions 2017 2016 Secured financings Original maturities: Greater than one year $ 8,685 $ 9,404 One year or less 2,034 1,429 Failed sales 1 552 285 Total $ 11,271 $ 11,118 1. For more information on failed sales, see Note 13 . Maturities and Terms of Secured Financings At December 31, 2017 At Fixed Variable December 31, $ in millions Rate Rate 1 Total 2016 Original maturities of one year or less: Next 12 months $ 590 $ 1,444 $ 2,034 $ 1,429 Original maturities greater than one year: 2017 $ — $ — $ — $ 3,377 2018 165 4,827 4,992 2,738 2019 36 2,601 2,637 2,813 2020 354 151 505 270 2021 2 — 2 — 2022 2 149 151 — Thereafter 227 171 398 206 Total $ 786 $ 7,899 $ 8,685 $ 9,404 Weighted average coupon at period-end 2 3.1% 1.5% 1.7% 1.0% 1. Variable rate borrowings bear interest based on a variety of money market indices, including LIBOR and federal funds rates . Amounts include notes carried at fair value with various payment provisions, including notes linked to equity, credit, commodity or other indices . 2. Includes only other secured financings with original maturities greater than one year. Weighted average coupon is calculated utilizing U.S. and non-U.S. dollar interest rates and excludes secured financings that are linked to non-interest indices and for w hich the fair value option was elected. Failed Sales by Maturity At At December 31, December 31, $ in millions 2017 2016 2017 $ — $ 112 2018 22 17 2019 4 53 2020 109 55 2021 69 28 2022 59 4 Thereafter 289 16 Total $ 552 $ 285 |
Commitments, Guarantees and C43
Commitments, Guarantees and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments, Guarantees and Contingencies [Abstract] | |
Commitments by Years to Maturity | Years to Maturity at December 31, 2017 Less $ in millions than 1 1-3 3-5 Over 5 Total Lending: Corporate $ 16,495 $ 30,234 $ 43,975 $ 4,061 $ 94,765 Consumer 6,319 — 8 3 6,330 Residential real estate 1 52 52 253 358 Wholesale real estate 108 508 — — 616 Forward-starting secured financing receivables 67,883 — — 579 68,462 Underwriting 336 — — — 336 Investment activities 506 126 44 245 921 Letters of credit and other financial guarantees 63 131 1 70 265 Total $ 91,711 $ 31,051 $ 44,080 $ 5,211 $ 172,053 Corporate lending commitments participated to third parties $ 6,414 Forward-starting secured financing receivables settled within three business days $ 54,236 |
Future Minimum Rental Commitments for Operating Premises Leases | Operating Premises Leases At December 31, $ in millions 2017 2018 $ 664 2019 624 2020 559 2021 494 2022 444 Thereafter 2,639 Total $ 5,424 Total minimum rental income to be received in the future under non-cancelable operating subleases $ 12 |
Rent Expense | $ in millions 2017 2016 2015 Rent expense $ 704 $ 689 $ 705 |
Obligations under Guarantee Arrangements | Obligations under Guarantee Arrangements at December 31, 2017 Maximum Potential Payout/Notional Years to Maturity $ in millions Less than 1 1-3 3-5 Over 5 Total Credit derivatives $ 88,226 $ 81,673 $ 94,110 $ 25,876 $ 289,885 Other credit contracts 2 — — 134 136 Non-credit derivatives 1,505,001 1,085,197 343,121 549,989 3,483,308 Standby letters of credit and other financial guarantees issued 1 830 1,152 1,215 5,036 8,233 Market value guarantees 38 58 68 — 164 Liquidity facilities 3,333 — — — 3,333 Whole loan sales guarantees — 1 1 23,244 23,246 Securitization representations and warranties — — — 60,157 60,157 General partner guarantees 32 52 324 25 433 Carrying Amount (Asset)/ Collateral/ $ in millions Liability Recourse Credit derivatives 2 $ (1,960) $ — Other credit contracts 16 — Non-credit derivatives 2 37,123 — Standby letters of credit and other financial guarantees issued 1 (199) 6,743 Market value guarantees — — Liquidity facilities (5) 5,547 Whole loan sales guarantees 8 — Securitization representations and warranties 91 — General partner guarantees 60 — 1. These amounts include certain issued standby letters of credit participated to third parties, totaling $ 0.7 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements. 2. 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 . |
Securitization Representation and Warranties | Securitization Representations and Warranties At December 31, 2017 $ in millions RMBS CMBS Maximum potential payout/notional $ 25,508 $ 34,649 Reserve for payments owed 1 91 — 1. Reserved in the Firm’s financial statements for payments to resolve claims related to breach of representations and warranties in connection with residential mortgages. |
Legal Expenses | $ in millions 2017 2016 2015 Legal expenses $ 342 $ 263 $ 563 |
Variable Interest Entities an44
Variable Interest Entities and Securitization Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Securitization Activities and Variable Interest Entities [Abstract] | |
Consolidated VIEs | Assets and Liabilities by Type of Activity At December 31, 2017 At December 31, 2016 $ in millions VIE Assets VIE Liabilities VIE Assets VIE Liabilities CLN $ — $ — $ 501 $ — OSF 378 3 602 10 MABS 1 249 210 397 283 Other 2 1,174 250 910 25 Total $ 1,801 $ 463 $ 2,410 $ 318 OSF—Other structured financings Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets. The value of assets is determined based on the fair value of the liabilities 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 December 31, At December 31, $ in millions 2017 2016 Assets Cash and cash equivalents: Cash and due from banks $ 69 $ 74 Restricted cash 222 255 Trading assets at fair value 833 1,295 Customer and other receivables 19 13 Goodwill 18 18 Intangible assets 155 177 Other assets 485 578 Total $ 1,801 $ 2,410 Liabilities Other secured financings at fair value $ 438 $ 289 Other liabilities and accrued expenses 25 29 Total $ 463 $ 318 Select Information Related to Consolidated VIEs At December 31, At December 31, $ in millions 2017 2016 Noncontrolling interests $ 189 $ 228 Maximum exposure to losses 1 — 78 Primarily related to certain derivatives, commitments, guarantees and other forms of involvement not recognized in the financial statements . |
Non-Consolidated VIEs | Non-consolidated VIEs At December 31, 2017 $ in millions MABS CDO MTOB OSF Other VIE assets (unpaid principal balance) $ 89,288 $ 9,807 $ 5,306 $ 3,322 $ 31,934 Maximum exposure to loss Debt and equity interests $ 10,657 $ 1,384 $ 80 $ 1,628 $ 4,730 Derivative and other contracts — — 3,333 — 1,686 Commitments, guarantees and other 1,214 668 — 164 433 Total $ 11,871 $ 2,052 $ 3,413 $ 1,792 $ 6,849 Carrying value of exposure to loss—Assets Debt and equity interests $ 10,657 $ 1,384 $ 43 $ 1,202 $ 4,730 Derivative and other contracts — — 5 — 184 Total $ 10,657 $ 1,384 $ 48 $ 1,202 $ 4,914 At December 31, 2016 $ in millions MABS CDO MTOB OSF Other VIE assets (unpaid principal balance) $ 101,916 $ 11,341 $ 4,857 $ 4,293 $ 39,077 Maximum exposure to loss Debt and equity interests $ 11,243 $ 1,245 $ 50 $ 1,570 $ 4,877 Derivative and other contracts — — 2,812 — 45 Commitments, guarantees and other 684 99 — 187 228 Total $ 11,927 $ 1,344 $ 2,862 $ 1,757 $ 5,150 Carrying value of exposure to loss—Assets Debt and equity interests $ 11,243 $ 1,245 $ 49 $ 1,183 $ 4,877 Derivative and other contracts — — 5 — 18 Total $ 11,243 $ 1,245 $ 54 $ 1,183 $ 4,895 MTOB— Municipal tender option bonds Non-consolidated VIE Mortgage- and Asset-Backed Securitization Assets At December 31, 2017 At December 31, 2016 UPB Debt and Equity Interests UPB Debt and Equity Interests $ in millions Residential mortgages $ 15,636 $ 1,272 $ 4,775 $ 458 Commercial mortgages 46,464 2,331 54,021 2,656 U.S. agency collateralized mortgage obligations 16,223 3,439 14,796 2,758 Other consumer or commercial loans 10,965 3,615 28,324 5,371 Total $ 89,288 $ 10,657 $ 101,916 $ 11,243 Additional VIE Assets Owned At December 31, 2017 At December 31, 2016 $ in millions VIE assets $ 11,318 $ 11,685 |
Transfers of Assets with Continuing Involvement | Transfers of Assets with Continuing Involvement At December 31, 2017 RML CML U.S. Agency CMO CLN and Other 1 $ in millions SPE assets (UPB) 2 $ 15,555 $ 62,744 $ 11,612 $ 17,060 Retained interests Investment grade $ — $ 293 $ 407 $ 4 Non-investment grade (fair value) 1 98 — 478 Total $ 1 $ 391 $ 407 $ 482 Interests purchased in the secondary market (fair value) Investment grade $ — $ 94 $ 439 $ — Non-investment grade 16 66 — 4 Total $ 16 $ 160 $ 439 $ 4 Derivative assets (fair value) $ 1 $ — $ — $ 226 Derivative liabilities (fair value) — — — 85 At December 31, 2016 RML CML U.S. Agency CMO CLN and Other 1 $ in millions SPE assets(UPB) 2 $ 19,381 $ 43,104 $ 11,092 $ 11,613 Retained interests (fair value) Investment grade $ — $ 22 $ 375 $ — Non-investment grade 4 79 — 826 Total $ 4 $ 101 $ 375 $ 826 Interests purchased in the secondary market (fair value) Investment grade $ — $ 30 $ 26 $ — Non-investment grade 23 75 — — Total $ 23 $ 105 $ 26 $ — Derivative assets (fair value) $ — $ 261 $ — $ 89 Derivative liabilities (fair value) — — — 459 RML—Residential mortgage loans CML—Commercial mortgage loans Amounts include CLO transactions managed by unrelated third parties. Amounts include assets transferred by unrelated transferors . Fair Value at December 31, 2017 $ in millions Level 2 Level 3 Total Retained interests Investment grade $ 407 $ 4 $ 411 Non-investment grade 22 555 577 Total $ 429 $ 559 $ 988 Interests purchased in the secondary market Investment grade $ 531 $ 2 $ 533 Non-investment grade 57 29 86 Total $ 588 $ 31 $ 619 Derivative assets $ 78 $ 149 $ 227 Derivative liabilities 81 4 85 Fair Value at December 31, 2016 $ in millions Level 2 Level 3 Total Retained interests Investment grade $ 385 $ 12 $ 397 Non-investment grade 14 895 909 Total $ 399 $ 907 $ 1,306 Interests purchased in the secondary market Investment grade $ 56 $ — $ 56 Non-investment grade 84 14 98 Total $ 140 $ 14 $ 154 Derivative assets $ 348 $ 2 $ 350 Derivative liabilities 98 361 459 |
Proceeds from New Securitization Transactions and Sales of Loans | Proceeds from New Securitization Transactions and Sales of Loans $ in millions 2017 2016 2015 New transactions 1 $ 23,939 $ 18,975 $ 21,243 Retained interests 2,337 2,701 3,062 Sales of corporate loans to CLO SPEs 1, 2 191 475 1,110 Net gains on new transactions and sale s of corporate loans to CLO entities at the time of the sale were not material for all periods presented. Sponsored by non-affiliates . |
Assets Sold with Retained Exposure | Assets Sold with Retained Exposure At December 31, 2017 At December 31, 2016 $ in millions Carrying value of assets derecognized at the time of sale and gross cash proceeds $ 19,115 $ 11,209 Fair value Assets sold $ 19,138 $ 11,301 Derivative assets recognized in the balance sheets 176 128 Derivative liabilities recognized in the balance sheets 153 36 |
Carrying Value of Assets and Liabilities Related to Failed Sales | Carrying Value of Assets and Liabilities Related to Failed Sales At December 31, 2017 At December 31, 2016 $ in millions Assets Liabilities Assets Liabilities Failed sales $ 552 $ 552 $ 285 $ 285 |
Regulatory Requirements (Tables
Regulatory Requirements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Requirements | |
Schedule of Regulatory Capital and Capital Ratios | Regulatory Capital At December 31, 2017 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 61,134 16.5% 7.3% Tier 1 capital 69,938 18.9% 8.8% Total capital 80,275 21.7% 10.8% Tier 1 leverage — 8.3% 4.0% Total RWAs $ 369,578 N/A N/A Adjusted average assets 2 842,270 N/A N/A At December 31, 2016 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 60,398 16.9% 5.9% Tier 1 capital 68,097 19.0% 7.4% Total capital 78,642 22.0% 9.4% Tier 1 leverage — 8.4% 4.0% Total RWAs $ 358,141 N/A N/A Adjusted average assets 2 811,402 N/A N/A 1. Percentages represent minimum regulatory capital ratios under the transitional rules. 2 . 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 quarter ended December 31, 2017 and December 31, 2016 , res pectively , adjusted for disallowed goodwill, transitional intangible assets, certain deferred tax assets, certain investments in the capital instruments of unconsolidated financial institutions and other adjustments. |
Schedule of Restricted Net Assets | $ in millions At December 31, 2017 At December 31, 2016 Restricted net assets $ 29,894 $ 25,258 |
MSBNA | |
Regulatory Requirements | |
Schedule of Regulatory Capital and Capital Ratios | MSBNA’s Regulatory Capital At December 31, 2017 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 15,196 20.5% 6.5% Tier 1 capital 15,196 20.5% 8.0% Total capital 15,454 20.8% 10.0% Tier 1 leverage 15,196 11.8% 5.0% At December 31, 2016 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 13,398 16.9% 6.5% Tier 1 capital 13,398 16.9% 8.0% Total capital 14,858 18.7% 10.0% Tier 1 leverage 13,398 10.5% 5.0% 1. Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. |
MSPBNA | |
Regulatory Requirements | |
Schedule of Regulatory Capital and Capital Ratios | MSPBNA’s Regulatory Capital At December 31, 2017 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 6,215 24.4% 6.5% Tier 1 capital 6,215 24.4% 8.0% Total capital 6,258 24.6% 10.0% Tier 1 leverage 6,215 9.7% 5.0% At December 31, 2016 $ in millions Amount Ratio Minimum Capital Ratio 1 Common Equity Tier 1 capital $ 5,589 26.1% 6.5% Tier 1 capital 5,589 26.1% 8.0% Total capital 5,626 26.3% 10.0% Tier 1 leverage 5,589 10.6% 5.0% 1. Capital ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. |
MS&Co. | |
Regulatory Requirements | |
Schedule of Broker-Dealer Regulatory Capital Requirements | U.S. Broker-Dealer Regulatory Capital Requirements MS&Co. Regulatory Capital $ in millions At December 31, 2017 At December 31, 2016 Net capital $ 10,142 $ 10,311 Excess net capital 8,018 8,034 |
MSSB LLC | |
Regulatory Requirements | |
Schedule of Broker-Dealer Regulatory Capital Requirements | MSSB LLC Regulatory Capital $ in millions At December 31, 2017 At December 31, 2016 Net capital $ 2,567 $ 3,946 Excess net capital 2,400 3,797 |
Total Equity (Tables)
Total Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Total Equity | |
Rollforward of Common Stock Outstanding | Rollforward of Common Stock Outstanding in millions 2017 2016 Shares outstanding at beginning of period 1,852 1,920 Treasury stock purchases 1 (92) (133) Other 2 28 65 Shares outstanding at end of period 1,788 1,852 1. The Firm’s Board has authorized the repurchase of the Firm’s outstanding stock under a share repurchase program (“Share Repurchase Program”). In addition to the Firm’s Share Repurchase Program, Treasury stock purchases include repurchases of common stock for employee tax withholding. 2. Other includes net shares issued to and forfeited from Employee stock trusts and issued for RSU conversions. |
Repurchases of Common Stock | Dividends and Share Repurchases $ in millions 2017 2016 Repurchases of common stock $ 3,750 $ 3,500 |
Preferred Stock | Preferred Stock $ in millions 2017 2016 2015 Dividends declared $ 523 $ 468 $ 452 Preferred Stock Outstanding $ in millions, except per share data Shares Outstanding Carrying Value At Liquidation At At December 31, Preference December 31, December 31, 2017 per Share 2017 2016 Series 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 K 40,000 25,000 1,000 — Total $ 8,520 $ 7,520 1. Series C is composed 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. Preferred Stock Issuance Description Series Issuance Date Preferred Stock Issuance Description Redemption Price per Share 1 Redeemable on or after Date Dividend per Share 2 A 3 July 2006 44,000,000 Depositary Shares, each representing a 1/1,000th of a share of Floating Rate Non-Cumulative Preferred Stock, $0.01 par value $ 25,000 July 15, 2011 $ 255.56 C 3, 4 October 13, 2008 10% Perpetual Non-Cumulative Non-Voting Preferred Stock 1,100 October 15, 2011 25.00 E 5 September 30, 2013 34,500,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 October 15, 2023 445.31 F 5 December 10, 2013 34,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 January 15, 2024 429.69 G 5 April 29, 2014 20,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual 6.625% Non-Cumulative Preferred Stock, $0.01 par value 25,000 July 15, 2019 414.06 H 5, 6 April 29, 2014 1,300,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 July 15, 2019 681.25 I 5 September 18, 2014 40,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 October 15, 2024 398.44 J 5, 7 March 19, 2015 1,500,000 Depositary Shares, each representing a 1/25th interest in a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, $0.01 par value 25,000 July 15, 2020 693.75 K 5, 8 January 2017 40,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, $0.01 par value 25,000 April 15, 2027 365.63 1. The redemption price per share for Series A, E, F, G, I and K is equivalent to $25.00 per Depositary Share. The redemption price per share for Series H and J is equivalent to $1,000 per Depositary Share. 2. Quarterly dividend s (unless noted otherwise) . 3. The preferred stock is redeemable at the Firm’s option, in whole or in part, on or after the redemption date. 4. Dividends on the Series C preferred stock are payable, on a non-cumulative basis, as and if declared by the Board, in cash, at the rate of 10% per annum of the liquidation preference of $1,000 per share. 5. The preferred stock is redeemable at the Firm’s option (i) in whole or in part, from time to time, on any dividend payment date on or after the redemption date or (ii) in whole but not in part at any time within 90 days following a regulatory capital treatment event (as described in the terms of that series). 6. Dividend on Series H preferred stock is payable semiannually until July 15, 2019 and quarterly thereafter. 7. Dividend on Serie s J preferred stock is payable semiannually until July 15, 2020 and quarterly thereafter. In addition to the redemption price per share, the redemption price includes any declared and unpaid dividends up to, but excluding, the date fixed for redemption, wi thout accumulation of any undeclared dividends . 8. The Series K Preferred Stock offering (net of related issuance costs) in January 2017 resulted in proceeds of approximately $994 million. |
Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) Accumulated Comprehensive Income (Loss) 1 $ in millions Foreign Currency Translation Adjustments AFS Securities Pensions, Postretirement and Other DVA Total December 31, 2014 $ (663) $ (73) $ (512) $ — $ (1,248) OCI during the period (300) (246) 138 — (408) December 31, 2015 (963) (319) (374) — (1,656) Cumulative adjustment for accounting change related to DVA 2 — — — (312) (312) OCI during the period (23) (269) (100) (283) (675) December 31, 2016 (986) (588) (474) (595) (2,643) OCI during the period 219 41 (117) (560) (417) December 31, 2017 $ (767) $ (547) $ (591) $ (1,155) $ (3,060) Amounts net of tax and noncontrolling interests. 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 unrealized DVA amount, net of noncontrolling interest s and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOCI. |
Period Changes in OCI Components | Period Changes in OCI Components 2017 $ in millions Pre-tax Gain (Loss) Income Tax Benefit (Provision) After-tax Gain (Loss) Non-controlling Interests Net Foreign currency translation adjustments OCI activity $ 64 $ 187 $ 251 $ 32 $ 219 Reclassified to earnings — — — — — Net OCI $ 64 $ 187 $ 251 $ 32 $ 219 Change in net unrealized gains (losses) on AFS securities OCI activity $ 100 $ (36) $ 64 $ — $ 64 Reclassified to earnings 1 (35) 12 (23) — (23) Net OCI $ 65 $ (24) $ 41 $ — $ 41 Pension, postretirement and other OCI activity $ (193) $ 75 $ (118) $ — $ (118) Reclassified to earnings 1 2 (1) 1 — 1 Net OCI $ (191) $ 74 $ (117) $ — $ (117) Change in net DVA OCI activity $ (922) $ 325 $ (597) $ (28) $ (569) Reclassified to earnings 1 12 (3) 9 — 9 Net OCI $ (910) $ 322 $ (588) $ (28) $ (560) 2016 2 $ in millions Pre-tax Gain (Loss) Income Tax Benefit (Provision) After-tax Gain (Loss) Non-controlling Interests Net Foreign currency translation adjustments OCI activity $ (24) $ 9 $ (15) $ 12 $ (27) Reclassified to earnings 4 — 4 — 4 Net OCI $ (20) $ 9 $ (11) $ 12 $ (23) Change in net unrealized gains (losses) on AFS securities OCI activity $ (313) $ 116 $ (197) $ — $ (197) Reclassified to earnings 1 (113) 41 (72) — (72) Net OCI $ (426) $ 157 $ (269) $ — $ (269) Pension, postretirement and other OCI activity $ (162) $ 64 $ (98) $ — $ (98) Reclassified to earnings 1 (3) 1 (2) — (2) Net OCI $ (165) $ 65 $ (100) $ — $ (100) Change in net DVA OCI activity $ (429) $ 153 $ (276) $ (13) $ (263) Reclassified to earnings 1 (31) 11 (20) — (20) Net OCI $ (460) $ 164 $ (296) $ (13) $ (283) 2015 $ in millions Pre-tax Gain (Loss) Income Tax Benefit (Provision) After-tax Gain (Loss) Non-controlling Interests Net Foreign currency translation adjustments OCI activity $ (119) $ (185) $ (304) $ (4) $ (300) Reclassified to earnings — — — — — Net OCI $ (119) $ (185) $ (304) $ (4) $ (300) Change in net unrealized gains (losses) on AFS securities OCI activity $ (305) $ 112 $ (193) $ — $ (193) Reclassified to earnings 1 (84) 31 (53) — (53) Net OCI $ (389) $ 143 $ (246) $ — $ (246) Pension, postretirement and other OCI activity $ 202 $ (70) $ 132 $ — $ 132 Reclassified to earnings 1 9 (3) 6 — 6 Net OCI $ 211 $ (73) $ 138 $ — $ 138 Amounts reclassified to earnings related to: realized gains and losses from sales of AFS securities are classified within Other revenues in the income statements; Pension, postretirement and other are classified within Compensation and benefits expenses in the income statements; and realization of DVA are classified within Trading revenues in the income statements . Exclusive of 2016 cumulative adjustment for accounting change related to DVA. |
Cumulative Foreign Currency Translation Adjustments | Cumulative Foreign Currency Translation Adjustments At At December 31, December 31, $ in millions 2017 2016 Associated with net investments in subsidiaries with a non-U.S. dollar functional currency $ (1,434) $ (2,018) Hedges, net of tax 667 1,032 Total $ (767) $ (986) Carrying value of net investments in non-U.S. dollar functional currency subsidiaries subject to hedges $ 10,139 $ 8,856 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted EPS | in millions, except for per share data 2017 2016 2015 Basic EPS Income from continuing operations $ 6,235 $ 6,122 $ 6,295 Income (loss) from discontinued operations (19) 1 (16) Net income 6,216 6,123 6,279 Net income applicable to noncontrolling interests 105 144 152 Net income applicable to Morgan Stanley 6,111 5,979 6,127 Less: Preferred stock dividends and other (523) (471) (456) Earnings applicable to Morgan Stanley common shareholders $ 5,588 $ 5,508 $ 5,671 Weighted average common shares outstanding 1,780 1,849 1,909 Earnings per basic common share Income from continuing operations $ 3.15 $ 2.98 $ 2.98 Income (loss) from discontinued operations (0.01) — (0.01) Earnings per basic common share $ 3.14 $ 2.98 $ 2.97 Diluted EPS Earnings applicable to Morgan Stanley common shareholders $ 5,588 $ 5,508 $ 5,671 Weighted average common shares outstanding 1,780 1,849 1,909 Effect of dilutive securities: Stock options and RSUs 1 41 38 44 Weighted average common shares outstanding and common stock equivalents 1,821 1,887 1,953 Earnings per diluted common share Income from continuing operations $ 3.08 $ 2.92 $ 2.91 Income (loss) from discontinued operations (0.01) — (0.01) Earnings per diluted common share $ 3.07 $ 2.92 $ 2.90 Weighted average antidilutive RSUs and stock options (excluded from the computation of diluted EPS) 1 — 13 12 1. 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. |
Interest Income and Interest 48
Interest Income and Interest Expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Interest Income and Interest Expense | |
Schedule of Details of Interest Income and Interest Expense | $ in millions 2017 2016 2015 Interest income Investment securities $ 1,334 $ 1,142 $ 876 Loans 3,298 2,724 2,163 Securities purchased under agreements to resell and Securities borrowed 1 169 (374) (560) Trading assets, net of Trading liabilities 2,029 2,131 2,262 Customer receivables and Other 2 2,167 1,393 1,094 Total interest income $ 8,997 $ 7,016 $ 5,835 Interest expense Deposits $ 187 $ 83 $ 78 Borrowings 4,285 3,606 3,497 Securities sold under agreements to repurchase and Securities loaned 3 1,237 977 1,024 Customer payables and Other 4 (12) (1,348) (1,857) Total interest expense $ 5,697 $ 3,318 $ 2,742 Net interest $ 3,300 $ 3,698 $ 3,093 1. Includes fees paid on Securities borrowed . 2 . Inclu des interest from Customer receivables, Restricted cash and Interest bearing deposits with banks . 3 . Includes fees received on Securities loaned. 4 . Includes fees received from prime brokerage customers for stock loan transactions incurred to cover customers’ short positions. |
Deferred Compensation Plans (Ta
Deferred Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Compensation Arrangements [Abstract] | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense $ in millions 2017 2016 2015 RSUs $ 951 $ 1,054 $ 1,080 Stock options — 2 (3) PSUs 75 81 26 Total 1 $ 1,026 $ 1,137 $ 1,103 Includes: Retirement eligible awards 2 $ 85 $ 73 $ 68 Net of cancellations. Relates to stock-based compensation anticipated to be awarded in January of the following year that do es not contain a future service requirement. |
Tax Benefit Related to Stock-Based Compensation Expense | Tax Benefit Related to Stock-Based Compensation Expense $ in millions 2017 2016 2015 Tax benefit 1 $ 225 $ 381 $ 369 1. Excludes income tax consequences related to employee share-based award conversions . |
Unrecognized Compensation Cost Related to Unvested Stock-Based Awards | Unrecognized Compensation Cost Related to Unvested Stock-Based Awards At December 31, $ in millions 2017 1 To be recognized in: 2018 $ 357 2019 158 Thereafter 27 Total $ 542 1. Amounts do not include forfeitures , cancellations , accelerations or 2017 performance year compensation award ed in January 2018, which will begin to be amortized in 2018 (see the Annual Compensation Cost for 2017 Performance Year Awards table herein). |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Available for Grant [Table Text Block] | Common Shares Available for Future Awards Under Stock-Based Compensation Plans At December 31, in millions 2017 Shares 146 |
Vested and Unvested RSU Activity | Vested and Unvested RSU Activity 2017 shares in millions Number of Shares Weighted Average Award Date Fair Value RSUs at beginning of period 100 $ 29.35 Awarded 22 42.98 Conversions to common stock (31) 30.03 Cancelled (3) 31.96 RSUs at end of period 1 88 $ 32.46 Aggregate intrinsic value of RSUs at end of period (dollars in millions) $ 4,633 Weighted average award date fair value RSUs awarded in 2016 $ 25.48 RSUs awarded in 2015 34.76 1. At December 31, 2017, the weighted average remaining term until delivery for the outstanding RSUs was approximately 1.1 years . |
Unvested RSU Activity | Unvested RSU Activity 2017 shares in millions Number of Shares Weighted Average Award Date Fair Value Unvested RSUs at beginning of period 65 $ 28.70 Awarded 22 42.98 Vested (34) 30.46 Cancelled (3) 31.96 Unvested RSUs at end of period 1 50 $ 33.64 1. Unvested RSUs represent awards where recipients have yet to satisfy either the explicit vesting terms or retirement-eligible requirements. |
Fair Value of RSU Activity | Fair Value of RSU Activity $ in millions 2017 2016 2015 Conversions to common stock $ 1,333 $ 1,068 $ 1,646 Vested 1,470 1,088 1,693 |
Fair Value per PSU on Award Date | PSU Fair Value on Award Date 2017 2016 2015 MS Adjusted ROE $ 42.64 $ 25.19 $ 34.58 Relative MS TSR 48.02 24.51 38.07 |
PSU Valuation Assumptions | Monte Carlo Simulation Assumptions Award Year Risk-Free Interest Rate Expected Stock Price Volatility Expected Dividend Yield 2017 1.5% 27.0% 0.0% 2016 1.1% 25.4% 0.0% 2015 0.9% 29.6% 0.0% |
PSU Activity | PSU Activity 2017 shares in millions Number of Shares PSUs at beginning of period 4 Awarded 1 Conversions to common stock (2) PSUs at end of period 3 |
Deferred Cash-Based Compensation Plans | Deferred Cash-Based Compensation Expense $ in millions 2017 2016 2015 Deferred cash-based awards $ 1,039 $ 950 $ 660 Return on referenced investments 696 228 112 Total 1 $ 1,735 $ 1,178 $ 772 Includes: Retirement-eligible awards 2 $ 176 $ 151 $ 144 1. Net of cancellations. 2. Relates to deferred cash-based compensation anticipated to be awarded in January of the following year that do es not contain a future service requirement. Unrecognized Compensation Cost Related to Unvested Deferred Cash-Based Awards At December 31, $ in millions 2017 1 To be recognized in : 2018 $ 375 2019 125 Thereafter 195 Total $ 695 Amounts do not include unrecognized expense for returns on referenced investments, forfeitures, cancellations, accelerations or 2017 performance year compensation awarded in January 2018 which will begin to be amortized in 2018 (see below). |
Annual Compensation Cost for 2017 Performance Year Awards | Annual Compensation Cost for 2017 Performance Year Awards 1 $ in millions 2018 2019 Thereafter Total Stock-based awards $ 519 $ 198 $ 165 $ 882 Deferred cash-based awards 616 290 121 1,027 Total $ 1,135 $ 488 $ 286 $ 1,909 1. Awarded in January 2018 and contain a future service requirement. Amounts do not include forfeitures, cancellations, accelerations, or any future return on referenced investments . |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Components of Net Periodic Benefit Expense (Income) | Components of Net Periodic Benefit Expense (Income) Pension Plans $ in millions 2017 2016 2015 Service cost, benefits earned during the period $ 16 $ 17 $ 19 Interest cost on projected benefit obligation 146 150 152 Expected return on plan assets (117) (122) (120) Net amortization of prior service credit — — (1) Net amortization of actuarial loss 17 12 26 Settlement loss — — 2 Net periodic benefit expense (income) $ 62 $ 57 $ 78 Other Postretirement Plan $ in millions 2017 2016 2015 Service cost, benefits earned during the period $ 1 $ 1 $ 1 Interest cost on projected benefit obligation 3 4 3 Net amortization of prior service credit (16) (17) (18) Net periodic benefit expense (income) $ (12) $ (12) $ (14) |
Pre-tax Amounts Recognized in OCI | Pre-tax Amounts Recognized in OCI Pension Plans $ in millions 2017 2016 2015 Net gain (loss) $ (205) $ (149) $ 212 Prior service credit (cost) 2 1 1 Amortization of prior service credit — — (1) Amortization of net loss 17 12 28 Total $ (186) $ (136) $ 240 Other Postretirement Plan $ in millions 2017 2016 2015 Net gain (loss) $ — $ (2) $ (3) Prior service credit (cost) — — (9) Amortization of prior service credit (16) (17) (18) Total $ (16) $ (19) $ (30) |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense (Income) | Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense (Income) Pension Plans 2017 2016 2015 Discount rate 4.01% 4.27% 3.86% Expected long-term rate of return on plan assets 3.52% 3.61% 3.59% Rate of future compensation increases 3.10% 3.19% 2.85% Other Postretirement Plan 2017 2016 2015 Discount rate 4.01% 4.13% 3.77% |
Rollforward of the Benefit Obligation and Fair Value of Plan Assets | Benefit Obligation and Funded Status Rollforward of the Benefit Obligation and Fair Value of Plan Assets Pension Plans Other Postretirement Plan $ in millions 2017 2016 2017 2016 Rollforward of benefit obligation Benefit obligation at beginning of year $ 3,711 $ 3,604 $ 88 $ 87 Service cost 16 17 1 1 Interest cost 146 150 3 4 Actuarial loss (gain) 1 304 223 — 1 Plan amendments (2) (1) — — Plan settlements (9) (19) — — Benefits paid (242) (219) (6) (5) Other, including foreign currency exchange rate changes 42 (44) — — Benefit obligation at end of year $ 3,966 $ 3,711 $ 86 $ 88 Rollforward of fair value of plan assets Fair value of plan assets at beginning of year $ 3,431 $ 3,497 $ — $ — Actual return on plan assets 217 196 — — Employer contributions 32 38 6 5 Benefits paid (242) (219) (6) (5) Plan settlements (9) (19) — — Other, including foreign currency exchange rate changes 39 (62) — — Fair value of plan assets at end of year $ 3,468 $ 3,431 $ — $ — Funded (unfunded) status $ (498) $ (280) $ (86) $ (88) Amounts recognized in the balance sheets Assets $ 87 $ 230 $ — $ — Liabilities (585) (510) (86) (88) Net amount recognized $ (498) $ (280) $ (86) $ (88) 1. Amounts primarily reflect the impact of year-over-year discount rate fluctuations. |
Amounts Recognized in AOCI and Estimated Amortization into Net Period Benefit Expense (Income) | Amounts Recognized in AOCI Pension Plans Other Postretirement Plan At At At At $ in millions December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Prior service credit (cost) $ 4 $ 2 $ 1 $ 17 Net gain (loss) (951) (763) — — Net gain (loss) recognized $ (947) $ (761) $ 1 $ 17 Estimated Amortization from AOCI into Net Periodic Benefit Expense (Income) in 2018 $ in millions Pension Plans Other Postretirement Plan Prior service credit (cost) $ 1 $ 1 Net gain (loss) (27) — |
Pension Plans with Benefit Obligations in Excess of the Fair Value of Plan Assets | Pension Plans with Benefit Obligations in Excess of the Fair Value of Plan Assets At At $ in millions December 31, 2017 December 31, 2016 Projected benefit obligation $ 3,676 $ 566 Accumulated benefit obligation 3,663 552 Fair value of plan assets 3,091 56 |
Accumulated Benefit Obligation | Accumulated Benefit Obligation At At December 31, December 31, $ in millions 2017 2016 Pension plans $ 3,953 $ 3,696 |
Weighted Average Assumptions Used to Determine Benefit Obligation | Weighted Average Assumptions Used to Determine Benefit Obligation Pension Plans Other Postretirement Plan At At At At December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Discount rate 3.46% 4.01% 3.44% 4.01% Rate of future compensation increase 3.38% 3.10% N/A N/A |
Assumed Health Care Cost Trend Rates Used to Determine the U.S. Postretirement Benefit Obligation | Assumed Health Care Cost Trend Rates Used to Determine the U.S. Postretirement Benefit Obligation At At December 31, 2017 December 31, 2016 Health care cost trend rate assumed for next year Medical 5.81% 5.96% Prescription 8.49% 9.32% Rate to which the cost trend rate is assumed to decline (ultimate trend rate) 4.50% 4.50% Year that the rate reaches the ultimate trend rate 2038 2038 |
Fair Value of Plan Assets and Liabilities | Fair Value of Plan Assets and Liabilities At December 31, 2017 $ in millions Level 1 Level 2 Level 3 Total Assets Investments: Cash and cash equivalents 1 $ 6 $ — $ — $ 6 U.S. government and agency securities: U.S. Treasury securities 2,398 — — 2,398 U.S. agency securities — 318 — 318 Total U.S. government and agency securities 2,398 318 — 2,716 Corporate and other debt: CDO — 14 — 14 Total corporate and other debt — 14 — 14 Derivative contracts 2 — 1 — 1 Other investments — — 47 47 Other receivables 1 26 — — 26 Total assets 3 $ 2,430 $ 333 $ 47 $ 2,810 Liabilities Derivative contracts 2 $ — $ 2 $ — $ 2 Other payables 1 11 — — 11 Total liabilities $ 11 $ 2 $ — $ 13 At December 31, 2016 $ in millions Level 1 Level 2 Level 3 Total Assets Investments: Cash and cash equivalents 1 $ 55 $ — $ — $ 55 U.S. government and agency securities: U.S. Treasury securities 1,493 — — 1,493 U.S. agency securities — 423 — 423 Total U.S. government and agency securities 1,493 423 — 1,916 Corporate and other debt: CDO — 13 — 13 Total corporate and other debt — 13 — 13 Derivative contracts — 159 — 159 Derivative-related cash collateral receivable — 76 — 76 Other investments — — 38 38 Total assets 3 $ 1,548 $ 671 $ 38 $ 2,257 Liabilities Derivative contracts $ — $ 225 $ — $ 225 Total liabilities $ — $ 225 $ — $ 225 1. Cash and cash equivalents , other receivables and other payables are valued at their carrying value, which approximates fair value. 2. During 2017, the Chicago Mercantile Exchange amended its rulebook for cleared OTC derivatives, resulting in the characterization o f variation margin transfers as settlement payments as opposed to cash posted as collateral. 3. Amounts exclude certain investments that are measured at fair value using the NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “Fair Value of Plan Assets Measured at NAV ” herein. |
Rollforward of Level 3 Plan Assets | Rollforward of Level 3 Plan Assets $ in millions 2017 2016 Balance at beginning of period $ 38 $ 35 Actual return on plan assets related to assets held at end of period 1 — Purchases, sales, other settlements and issuances, net 8 3 Balance at end of period $ 47 $ 38 |
Funds Measured at NPV per Share Not Classified in the Fair Value of Plan Assets | Fair Value of Plan Assets Measured at NAV At December 31, At December 31, $ in millions 2017 2016 Commingled trust funds Fixed income $ — $ 999 Money market 285 86 Foreign funds Fixed income 126 111 Liquidity 41 9 Targeted cash flow 219 194 Total $ 671 $ 1,399 |
Expected Future Benefit Payments | Expected Future Benefit Payments At December 31, 2017 $ in millions Pension Plans Other Postretirement Plan 2018 $ 140 $ 7 2019 142 7 2020 148 7 2021 156 7 2022 166 7 2023-2027 922 31 |
401(k) Plan and Defined Contribution Pension Plans | 401(k) Expense $ in millions 2017 2016 2015 Expense $ 258 $ 250 $ 255 Defined Contribution Pension Expense $ in millions 2017 2016 2015 Expense $ 106 $ 101 $ 111 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Components of Provision for (Benefit from) Income Taxes | Components of Provision for (Benefit from) Income Taxes $ in millions 2017 2016 2015 Current U.S.: Federal $ 476 $ 330 $ 239 State and local 125 221 144 Non-U.S.: U.K. 401 196 247 Japan 56 28 19 Hong Kong 48 14 24 Other 308 359 333 Total $ 1,414 $ 1,148 $ 1,006 Deferred U.S.: Federal $ 2,656 $ 1,336 $ 1,031 State and local 84 74 43 Non-U.S.: U.K. 18 56 (56) Japan (17) 127 58 Hong Kong (2) 31 50 Other 15 (46) 68 Total $ 2,754 $ 1,578 $ 1,194 Provision for income taxes from continuing operations $ 4,168 $ 2,726 $ 2,200 Provision for (benefit from) income taxes from discontinued operations $ (7) $ 1 $ (7) |
Selected Other Non-U.S. Tax Provisions | Selected Other Non-U.S. Tax Provisions $ in millions Tax Provisions 2017: Brazil $ 82 India 49 Canada 36 2016: Brazil 125 India 46 France 38 2015: Mexico 68 Brazil 62 Netherlands 58 India 45 France 42 |
Net Income Tax Provision (Benefit) Accrued in Additional Paid-in Capital Related to Employee Share-Based Compensation | Net Income Tax Provision (Benefit) Accrued in Additional Paid-in Capital Related to Employee Share-Based Compensation $ in millions 2017 2016 2015 Additional paid-in capital 1 $ — $ 24 $ (203) Beginning in 2017, the income tax consequences related to employee share-based awards are required to be recognized in Provision for income taxes in the income statements upon the conversion of employee share-based awards instead of additional paid-in capital. See Note 2 to the financial statements for information on the adoption of the accounting update Improvements to Employee Share-Based Payment Accounting. See Note 21 for more information on the net discrete tax provisions (benefits). |
Reconciliation of the U.S. Federal Statutory Income Tax Rate to the Effective Income Tax Rate | 2017 2016 2015 U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % U.S. state and local income taxes, net of U.S. federal income tax benefits 1.4 2.2 1.4 Domestic tax credits (1.6) (2.5) (1.5) Tax exempt income (0.1) (0.1) (0.2) Non-U.S. earnings Foreign tax rate differential (5.0) (3.1) (8.7) Change in reinvestment assertion — — 0.2 Change in foreign tax rates — 0.1 — Tax Act enactment 11.5 — — Employee share-based awards (1.5) — — Other 0.4 (0.8) (0.3) Effective income tax rate 40.1 % 30.8 % 25.9 % |
Deferred Tax Assets and Liabilities | At At December 31, December 31, $ in millions 2017 2016 Gross deferred tax assets Tax credits and net operating loss carryforwards $ 391 $ 731 Employee compensation and benefit plans 2,146 3,504 Valuation and liability allowances 377 656 Valuation of inventory, investments and receivables 645 1,062 Other — 21 Total deferred tax assets 3,559 5,974 Deferred tax assets valuation allowance 144 164 Deferred tax assets after valuation allowance $ 3,415 $ 5,810 Gross deferred tax liabilities Non-U.S. operations $ 20 $ 270 Fixed assets 627 773 Other 194 — Total deferred tax liabilities $ 841 $ 1,043 Net deferred tax assets $ 2,574 $ 4,767 |
Rollforward of Unrecognized Tax Benefits | Rollforward of Unrecognized Tax Benefits $ in millions 2017 2016 2015 Balance at beginning of period $ 1,851 $ 1,804 $ 2,228 Increase based on tax positions related to the current period 63 172 230 Increase based on tax positions related to prior periods 170 14 114 Decrease based on tax positions related to prior periods (312) (134) (753) Decreases related to settlements with taxing authorities (155) — (7) Decreases related to lapse of statute of limitations (23) (5) (8) Balance at end of period $ 1,594 $ 1,851 $ 1,804 Net unrecognized tax benefits 1 $ 873 $ 1,110 $ 1,144 Represent ending unrecognized tax benefits adjusted for the impact of the federal benefit of state issues, competent authority and foreign tax credit offsets. If recognized, these net benefits would favorably impact the effective tax rate in future pe riods. |
Interest Expense (Benefit), Net of Federal and State Income Tax Benefits | Interest Expense (Benefit), Net of Federal and State Income Tax Benefits $ in millions 2017 2016 2015 Recognized in income statements $ (3) $ 28 $ 18 Accrued at end of period 147 150 122 |
Earliest Tax Year Subject to Examination in Major Tax Jurisdictions | Earliest Tax Year Subject to Examination in Major Tax Jurisdictions Jurisdiction Tax Year U.S. 1999 New York State and New York City 2007 Hong Kong 2011 U.K. 2010 Japan 2015 |
Income from Continuing Operations before Income Tax Expense (Benefit) | Income from Continuing Operations Before Income Tax Expense (Benefit) $ in millions 2017 2016 2015 U.S. $ 5,686 $ 5,694 $ 5,360 Non-U.S. 1 4,717 3,154 3,135 Total $ 10,403 $ 8,848 $ 8,495 1. Non-U.S. income is defined as income generated from operations located outside the U.S. |
Segment and Geographic Inform52
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Selected Financial Information by Business Segment | Selected Financial Information by Business Segment 2017 $ in millions IS WM IM 1, 2 I/E Total Total non-interest revenues $ 19,622 $ 12,731 $ 2,586 $ (294) $ 34,645 Interest income 5,377 4,591 4 (975) 8,997 Interest expense 6,186 486 4 (979) 5,697 Net interest (809) 4,105 — 4 3,300 Net revenues $ 18,813 $ 16,836 $ 2,586 $ (290) $ 37,945 Income from continuing operations before income taxes $ 5,644 $ 4,299 $ 456 $ 4 $ 10,403 Provision for income taxes 3 1,993 1,974 201 — 4,168 Income from continuing operations 3,651 2,325 255 4 6,235 Income (loss) from discontinued operations, net of income taxes (19) — — — (19) Net income 3,632 2,325 255 4 6,216 Net income applicable to noncontrolling interests 96 — 9 — 105 Net income applicable to Morgan Stanley $ 3,536 $ 2,325 $ 246 $ 4 $ 6,111 2016 $ in millions IS 4 WM 4 IM 1, 2 I/E Total Total non-interest revenues $ 17,294 $ 11,821 $ 2,108 $ (290) $ 30,933 Interest income 4,005 3,888 5 (882) 7,016 Interest expense 3,840 359 1 (882) 3,318 Net interest 165 3,529 4 — 3,698 Net revenues $ 17,459 $ 15,350 $ 2,112 $ (290) $ 34,631 Income from continuing operations before income taxes $ 5,123 $ 3,437 $ 287 $ 1 $ 8,848 Provision for income taxes 3 1,318 1,333 75 — 2,726 Income from continuing operations 3,805 2,104 212 1 6,122 Income (loss) from discontinued operations, net of income taxes (1) — 2 — 1 Net income 3,804 2,104 214 1 6,123 Net income (loss) applicable to noncontrolling interests 155 — (11) — 144 Net income applicable to Morgan Stanley $ 3,649 $ 2,104 $ 225 $ 1 $ 5,979 2015 $ in millions IS 4 WM 4 IM 1 I/E Total Total non-interest revenues $ 17,800 $ 12,144 $ 2,331 $ (213) $ 32,062 Interest income 3,190 3,105 2 (462) 5,835 Interest expense 3,037 149 18 (462) 2,742 Net interest 153 2,956 (16) — 3,093 Net revenues $ 17,953 $ 15,100 $ 2,315 $ (213) $ 35,155 Income from continuing operations before income taxes $ 4,671 $ 3,332 $ 492 $ — $ 8,495 Provision for income taxes 3 825 1,247 128 — 2,200 Income from continuing operations 3,846 2,085 364 — 6,295 Income (loss) from discontinued operations, net of income taxes (17) — 1 — (16) Net income 3,829 2,085 365 — 6,279 Net income applicable to noncontrolling interests 133 — 19 — 152 Net income applicable to Morgan Stanley $ 3,696 $ 2,085 $ 346 $ — $ 6,127 I/E – Intersegment Eliminations For information on fee waivers see the table below. For information on net unrealized performance-based fees see the table below. The Firm’s effective tax rate from continuing operations included net discrete tax provisions (benefits). See table below for further information. Effective July 1, 2016, the Institutional Securities and Wealth Management business segments entered into an agreement, whereby Institutional Securities assumed management of Wealth Management’s fixed i ncome client-driven trading activities and employees. Institutional Securities now pays fees to Wealth Management based on distribution activity (collectively, the “Fixed Income Integration”). Prior periods have not been recast for this new intersegment ag reement due to immateriality . |
Information on Fee Waivers and Net Unrealized Performance-based Fees | Reduction of Fees due to Fee Waivers $ in millions 2017 2016 2015 Fee waivers $ 86 $ 91 $ 197 Net Unrealized Performance-based Fees At At $ in millions December 31, 2017 December 31, 2016 Net cumulative unrealized performance-based fees at risk of reversing $ 442 $ 397 |
Net Discrete Tax Provision (Benefit) by Segment | Net Discrete Tax Provision (Benefit) by Segment 2017 $ in millions IS WM IM Total Intermittent: Tax Act enactment 1 $ 705 $ 402 $ 94 $ 1,201 Remeasurement of reserves and related interest (168) — — (168) Other (66) 9 (8) (65) Total intermittent net discrete tax provision (benefit) $ 471 $ 411 $ 86 $ 968 Recurring: Employee share-based awards (93) (54) (8) (155) Total $ 378 $ 357 $ 78 $ 813 2016 2 $ (68) 2015 2 (564) For further discussion on the Tax Act, see Note 20 . The intermittent net discrete tax benefits for 2016 and 2015 were primarily within the Institutional Securities business segment. |
Total Assets by Business Segment | Total Assets by Business Segment At December 31, At December 31, $ in millions 2017 2016 Institutional Securities $ 664,974 $ 629,149 Wealth Management 182,009 181,135 Investment Management 4,750 4,665 Total 1 $ 851,733 $ 814,949 Parent assets have been fully allocated to the business segments. |
Net Revenues by Region | Net Revenues by Region $ in millions 2017 2016 2015 Americas $ 27,817 $ 25,487 $ 25,080 EMEA 5,714 4,994 5,353 Asia 4,414 4,150 4,722 Net revenues $ 37,945 $ 34,631 $ 35,155 |
Total Assets by Region | Total Assets by Region At December 31, At December 31, $ in millions 2017 2016 Americas $ 570,489 $ 581,750 EMEA 191,398 158,819 Asia 89,846 74,380 Total $ 851,733 $ 814,949 |
Parent Company (Tables)
Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Statement | |
Borrowings with Original Maturities Greater than One Year | Borrowings with Original Maturities Greater than One Year by Type $ in millions At December 31, 2017 At December 31, 2016 Senior $ 180,835 $ 154,472 Subordinated 10,228 10,303 Total $ 191,063 $ 164,775 Weighted average stated maturity, in years 6.6 5.9 Subordinated Debt 2017 2016 Contractual weighted average coupon 4.5% 4.5% Rates for Borrow ings w ith Original Maturities Greater t han One Year At December 31, 2017 2016 2015 Contractual weighted average coupon 1 3.3% 3.7% 4.0% Effective average after swaps 2.5% 2.5% 2.1% 1. Weighted average coupon was calculated utilizing U.S. and non-U.S. dollar interest rates and excludes financial instruments for which the fair value option was elected . |
Obligations under Guarantee Arrangements | Obligations under Guarantee Arrangements at December 31, 2017 Maximum Potential Payout/Notional Years to Maturity $ in millions Less than 1 1-3 3-5 Over 5 Total Credit derivatives $ 88,226 $ 81,673 $ 94,110 $ 25,876 $ 289,885 Other credit contracts 2 — — 134 136 Non-credit derivatives 1,505,001 1,085,197 343,121 549,989 3,483,308 Standby letters of credit and other financial guarantees issued 1 830 1,152 1,215 5,036 8,233 Market value guarantees 38 58 68 — 164 Liquidity facilities 3,333 — — — 3,333 Whole loan sales guarantees — 1 1 23,244 23,246 Securitization representations and warranties — — — 60,157 60,157 General partner guarantees 32 52 324 25 433 Carrying Amount (Asset)/ Collateral/ $ in millions Liability Recourse Credit derivatives 2 $ (1,960) $ — Other credit contracts 16 — Non-credit derivatives 2 37,123 — Standby letters of credit and other financial guarantees issued 1 (199) 6,743 Market value guarantees — — Liquidity facilities (5) 5,547 Whole loan sales guarantees 8 — Securitization representations and warranties 91 — General partner guarantees 60 — 1. These amounts include certain issued standby letters of credit participated to third parties, totaling $ 0.7 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements. 2. 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 . |
Parent Company | |
Condensed Financial Statement | |
Condensed Income Statements and Comprehensive Income Statements | $ in millions 2017 2016 2015 Revenues Dividends from non-bank subsidiaries $ 2,567 $ 2,448 $ 4,942 Trading (260) 96 574 Other 64 38 53 Total non-interest revenues 2,371 2,582 5,569 Interest income 3,783 3,008 3,055 Interest expense 4,079 4,036 4,073 Net interest (296) (1,028) (1,018) Net revenues 2,075 1,554 4,551 Non-interest expenses 240 126 (195) Income before income taxes 1,835 1,428 4,746 Provision for (benefit from) income taxes (206) (383) (83) Net income before undistributed gain of subsidiaries 2,041 1,811 4,829 Undistributed gain of subsidiaries 4,070 4,168 1,298 Net income 6,111 5,979 6,127 OCI, net of tax: Foreign currency translation adjustments 219 (23) (300) Change in net unrealized gains (losses) on AFS securities 41 (269) (246) Pensions, postretirement and other (117) (100) 138 Change in net DVA (560) (283) — Comprehensive income $ 5,694 $ 5,304 $ 5,719 Net income $ 6,111 $ 5,979 $ 6,127 Preferred stock dividends and other 523 471 456 Earnings applicable to Morgan Stanley common shareholders $ 5,588 $ 5,508 $ 5,671 |
Condensed Balance Sheets | Parent Company Only—Condensed Balance Sheets At December 31, At December 31, $ in millions, except share data 2017 2016 Assets Cash and cash equivalents: Cash and due from banks $ 11 $ 116 Deposits with banking subsidiaries 8,120 3,600 Restricted cash 1 3 Trading assets at fair value 5,752 139 Investment securities at fair value 19,268 — Securities purchased under agreement to resell with affiliates 38,592 57,906 Advances to subsidiaries: Bank and BHC 30,145 28,186 Non-bank 112,557 95,684 Equity investments in subsidiaries: Bank and BHC 35,971 34,329 Non-bank 31,856 31,246 Other assets 2,704 4,613 Total assets $ 284,977 $ 255,822 Liabilities Trading liabilities at fair value $ 148 $ 49 Securities sold under agreements to repurchase with affiliates 8,753 — Payables to subsidiaries 28,781 26,957 Other liabilities and accrued expenses 2,421 2,040 Borrowings 167,483 150,726 Total liabilities 207,586 179,772 Commitments and contingent liabilities (see Note 12) - Equity Preferred stock 8,520 7,520 Common stock, $0.01 par value: Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,788,086,805 and 1,852,481,601 20 20 Additional paid-in capital 23,545 23,271 Retained earnings 57,577 53,679 Employee stock trusts 2,907 2,851 AOCI (3,060) (2,643) Common stock held in treasury at cost, $0.01 par value (250,807,174 and 186,412,378 shares) (9,211) (5,797) Common stock issued to employee stock trusts (2,907) (2,851) Total shareholders' equity 77,391 76,050 Total liabilities and equity $ 284,977 $ 255,822 |
Condensed Cash Flow Statements | Parent Company Only—Condensed Cash Flow Statements $ in millions 2017 2016 2015 Cash flows from operating activities Net income $ 6,111 $ 5,979 $ 6,127 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Undistributed gain of subsidiaries (4,070) (4,168) (1,298) Other operating activities 1,087 1,367 1,084 Changes in assets and liabilities 619 (151) (2,984) Net cash provided by (used for) operating activities 3,747 3,027 2,929 Cash flows from investing activities Proceeds from (payments for): Investment securities: Purchases (5,263) — — Proceeds from sales 3,620 — — Proceeds from paydowns and maturities 1,038 — — Securities purchased under agreements to resell with affiliates 19,314 (10,846) (5,459) Securities sold under agreements to repurchase with affiliates 8,753 — — Advances to and investments in subsidiaries (33,825) (2,502) 1,364 Net cash provided by (used for) investing activities (6,363) (13,348) (4,095) Cash flows from financing activities Proceeds from: Issuance of preferred stock, net of issuance costs 994 — 1,493 Issuance of Borrowings 36,833 32,795 28,575 Payments for: Borrowings (24,668) (24,793) (23,458) Repurchases of common stock and employee tax withholdings (4,292) (3,933) (2,773) Cash dividends (2,085) (1,746) (1,455) Other financing activities 26 66 — Net cash provided by (used for) financing activities 6,808 2,389 2,382 Effect of exchange rate changes on cash and cash equivalents 221 (250) (65) Net increase (decrease) in cash and cash equivalents 4,413 (8,182) 1,151 Cash and cash equivalents, at beginning of period 3,719 11,901 10,750 Cash and cash equivalents, at end of period $ 8,132 $ 3,719 $ 11,901 Cash and cash equivalents: Cash and due from banks $ 11 $ 116 $ 5,166 Deposits with banking subsidiaries 8,120 3,600 4,311 Interest bearing deposits with banks — — 2,421 Restricted cash 1 3 3 Cash and cash equivalents, at end of period $ 8,132 $ 3,719 $ 11,901 Supplemental Disclosure of Cash Flow Information Cash payments for: Interest $ 3,570 $ 3,650 $ 3,959 Income taxes, net of refunds 201 201 255 |
Borrowings with Original Maturities Greater than One Year | Parent Company’s Borrowings with Original Maturities Greater than One Year At At December 31, December 31, $ in millions 2017 2016 Senior $ 157,255 $ 140,422 Subordinated 10,228 10,303 Total $ 167,483 $ 150,725 |
Obligations under Guarantee Arrangements | Guarantees of Debt Instruments and Warrants Issued by Subsidiaries $ in millions At December 31, 2017 At December 31, 2016 Aggregate balance $ 19,392 $ 11,538 Guarantees under Subsidiary Lease Obligations $ in millions At December 31, 2017 At December 31, 2016 Aggregate balance 1 $ 1,082 $ 1,090 1. Amounts primarily relate to the U.K. |
Quarterly Results (Tables)
Quarterly Results (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results | |
Schedule of Quarterly Results (Unaudited) | 2017 Quarter 1 $ in millions, except per share data First Second Third Fourth 2, 3 Total non-interest revenues $ 8,974 $ 8,752 $ 8,414 $ 8,505 Net interest 771 751 783 995 Net revenues 9,745 9,503 9,197 9,500 Total non-interest expenses 6,937 6,861 6,715 7,029 Income from continuing operations before income taxes 2,808 2,642 2,482 2,471 Provision for income taxes 815 846 697 1,810 Income from continuing operations 1,993 1,796 1,785 661 Income (loss) from discontinued operations (22) (5) 6 2 Net income 1,971 1,791 1,791 663 Net income applicable to noncontrolling interests 41 34 10 20 Net income applicable to Morgan Stanley $ 1,930 $ 1,757 $ 1,781 $ 643 Preferred stock dividends and other 90 170 93 170 Earnings applicable to Morgan Stanley common shareholders $ 1,840 $ 1,587 $ 1,688 $ 473 Earnings (loss) per basic common share 4 : Income from continuing operations $ 1.03 $ 0.89 $ 0.95 $ 0.27 Income (loss) from discontinued operations (0.01) — — — Earnings per basic common share $ 1.02 $ 0.89 $ 0.95 $ 0.27 Earnings (loss) per diluted common share 4 : Income from continuing operations $ 1.01 $ 0.87 $ 0.93 $ 0.26 Income (loss) from discontinued operations (0.01) — — — Earnings per diluted common share $ 1.00 $ 0.87 $ 0.93 $ 0.26 Dividends declared per common share $ 0.20 $ 0.20 $ 0.25 $ 0.25 Book value per common share $ 37.48 $ 38.22 $ 38.87 $ 38.52 2016 Quarter $ in millions, except per share data First Second Third Fourth 2, 5 Total non-interest revenues $ 6,893 $ 7,996 $ 7,906 $ 8,138 Net interest 899 913 1,003 883 Net revenues 7,792 8,909 8,909 9,021 Total non-interest expenses 6,054 6,426 6,528 6,775 Income from continuing operations before income taxes 1,738 2,483 2,381 2,246 Provision for income taxes 578 833 749 566 Income from continuing operations 1,160 1,650 1,632 1,680 Income (loss) from discontinued operations (3) (4) 8 — Net income 1,157 1,646 1,640 1,680 Net income applicable to noncontrolling interests 23 64 43 14 Net income applicable to Morgan Stanley $ 1,134 $ 1,582 $ 1,597 $ 1,666 Preferred stock dividends and other 79 157 79 156 Earnings applicable to Morgan Stanley common shareholders $ 1,055 $ 1,425 $ 1,518 $ 1,510 Earnings (loss) per basic common share 4 : Income from continuing operations $ 0.56 $ 0.77 $ 0.82 $ 0.84 Income (loss) from discontinued operations — (0.01) 0.01 — Earnings per basic common share $ 0.56 $ 0.76 $ 0.83 $ 0.84 Earnings (loss) per diluted common share 4 : Income from continuing operations $ 0.55 $ 0.75 $ 0.80 $ 0.81 Income (loss) from discontinued operations — — 0.01 — Earnings per diluted common share $ 0.55 $ 0.75 $ 0.81 $ 0.81 Dividends declared per common share $ 0.15 $ 0.15 $ 0.20 $ 0.20 Book value per common share $ 35.34 $ 36.29 $ 37.11 $ 36.99 For information on recurring-type discrete tax benefits related to the adoption of the accounting update Improvements to Employee Share-Based Payment Accounting , see the following table and Note 2. The fourth quarter of 2017 included an intermittent net discrete tax provision of approximately $1.2 billion , primarily related to the remeasurement of certain net deferred tax assets using the lower corporate tax rate as a result of the enactment of the Tax Act . The fourth quarter of 2017 and 2016 also inc luded net intermittent discrete tax benefits of $ 168 million and $ 135 million, respectively, primarily related to the remeasurement of reserves and related interest due to new information regarding the status of multi-year IRS tax examination s . Income tax consequences associated with employee share-based awards are excluded from intermittent net discrete tax provisions (benefits), as we anticipate conversion activity each year (see Note s 2 and 20 ) . T he fourth quarter of 2017 included a $ 53 million impairment of the Investment Management business segment’s equity method investment in a third- party asset manager. The s um of the quarters’ earnings per common share may not equal the annual amounts due to the averaging effect of the number of shares and share equivalents throughout the year . During the fourth quarter of 2016, net revenues included losses of approximately $ 60 million on sales and markdowns of legacy limited partnership investments in third-party-sponsored funds within the Investment Manage ment business segment. The fourth quarter of 2016 also included a $ 70 million provision within the Wealth Management business segment related to certain brokerage service reporting activities. Employee Share-Based Awards 2017 Quarter $ in millions First Second Third Fourth Discrete tax benefit $ 112 $ 16 $ 11 $ 16 |
Introduction and Basis of Pre55
Introduction and Basis of Presentation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Global Oil Merchanting Unit | |
Disclosures by disposal groups, including discontinued operations | |
Gain (loss) on sale of business | $ (71) |
Significant Accounting Polici56
Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Improvements to Employee Share-Based Payment Accounting | ||||
Accounting Standards Adopted | ||||
Excess tax deficiences (benefits) recognized in Provision for income taxes | $ (112) | |||
Cumulative catch-up adjustment to Retained Earnings | $ 30 | |||
Increase to Additional paid-in capital | 45 | |||
Increase to deferred tax asset | $ 15 | |||
Statement of Cash Flows - Restricted Cash | ||||
Accounting Standards Adopted | ||||
Increase (decrease) in Net cash provided by (used for) operating activities | $ 2,900 | $ (8,300) | ||
Buildings | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 39 years | |||
Furniture and Fixtures | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 7 years | |||
Leasehold Improvements - Building | Maximum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 25 years | |||
Leasehold Improvements - Other | Maximum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 15 years | |||
Computer and Communications Equipment | Minimum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 3 years | |||
Computer and Communications Equipment | Maximum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 9 years | |||
Power Generation Assets | Minimum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 15 years | |||
Power Generation Assets | Maximum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 29 years | |||
Terminals, Pipelines and Equipment | Minimum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 3 years | |||
Terminals, Pipelines and Equipment | Maximum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 30 years | |||
Software Costs | Minimum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 3 years | |||
Software Costs | Maximum | ||||
Premises, Equipment and Software Costs | ||||
Estimated useful lives | 10 years |
Fair Value Disclosures (Assets
Fair Value Disclosures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets at Fair Value | ||
Total trading assets | $ 298,282 | $ 262,154 |
Investment securities - AFS | 55,203 | 63,170 |
Securities purchased under agreement to resell | 0 | 302 |
Liabilities at Fair Value | ||
Deposits | 204 | 63 |
Securities sold under agreement to repurchase | 800 | 729 |
Other secured financings | 3,863 | 5,041 |
Borrowings | 46,912 | 39,142 |
Recurring | ||
Assets at Fair Value | ||
U.S. treasury and agency securities | 48,965 | 48,045 |
Other sovereign government obligations | 28,060 | 19,508 |
State and municipal securities | 3,600 | 2,605 |
MABS | 2,787 | 1,908 |
Corporate bonds | 15,561 | 11,283 |
CDO | 529 | 665 |
Loans and lending commitments | 10,736 | 8,702 |
Other debt | 1,448 | 1,540 |
Corporate equities | 150,355 | 132,372 |
Derivative and other contracts | 30,813 | 31,206 |
Netting | (267,598) | (411,246) |
Counterparty and cash collateral netting | (47,171) | (51,381) |
Investments | 1,840 | 1,392 |
Physical commodities | 1,024 | 112 |
Total trading assets | 295,718 | 259,338 |
Investment securities - AFS | 55,203 | 63,170 |
Securities purchased under agreement to resell | 302 | |
Intangible assets | 3 | 3 |
Total assets | 350,924 | 322,813 |
Liabilities at Fair Value | ||
Deposits | 204 | 63 |
U.S. treasury and agency securities | 17,826 | 11,697 |
Other sovereign government obligations | 26,873 | 23,088 |
Corporate and other debt | 7,144 | 6,157 |
Corporate equities | 52,757 | 57,936 |
Derivative and other contracts | 26,695 | 29,315 |
Netting | (257,144) | (399,668) |
Counterparty and cash collateral netting | (36,717) | (39,803) |
Physical commodities | 1 | |
Total trading liabilities | 131,295 | 128,194 |
Securities sold under agreement to repurchase | 800 | 729 |
Other secured financings | 3,863 | 5,041 |
Borrowings | 46,912 | 39,142 |
Total liabilities | 183,074 | 173,169 |
Transfers Between Level 1 and Level 2 | ||
Trading assets transferred from Level 2 to Level 1 | 1,200 | |
Trading liabilities transferred from Level 2 to Level 1 | 1,000 | |
Recurring | Futures Contracts | Customer and Other Receivables, Net | ||
Additional Fair Value Disclosure | ||
Derivative assets, unsettled fair value | 831 | 610 |
Recurring | Corporate Loans | ||
Assets at Fair Value | ||
Loans and lending commitments | 8,358 | 7,217 |
Recurring | Residential Real Estate Loans | ||
Assets at Fair Value | ||
Loans and lending commitments | 799 | 966 |
Recurring | Wholesale Real Estate Loans | ||
Assets at Fair Value | ||
Loans and lending commitments | 1,579 | 519 |
Recurring | Interest Rate Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 180,939 | 302,910 |
Liabilities at Fair Value | ||
Derivative and other contracts | 163,148 | 287,576 |
Borrowings | 19,230 | 16,051 |
Recurring | Credit Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 8,022 | 12,229 |
Liabilities at Fair Value | ||
Derivative and other contracts | 8,545 | 13,425 |
Borrowings | 815 | 647 |
Recurring | Foreign Exchange Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 53,797 | 75,165 |
Liabilities at Fair Value | ||
Derivative and other contracts | 55,268 | 75,583 |
Borrowings | 666 | 1,114 |
Recurring | Equity Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 44,990 | 38,629 |
Liabilities at Fair Value | ||
Derivative and other contracts | 47,989 | 40,514 |
Borrowings | 25,903 | 21,066 |
Recurring | Commodity and Other Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 10,663 | 13,519 |
Liabilities at Fair Value | ||
Derivative and other contracts | 8,889 | 11,885 |
Recurring | Level 1 | ||
Assets at Fair Value | ||
U.S. treasury and agency securities | 22,077 | 27,579 |
Other sovereign government obligations | 20,234 | 14,005 |
State and municipal securities | 0 | 0 |
MABS | 0 | 0 |
Corporate bonds | 0 | 0 |
CDO | 0 | 0 |
Loans and lending commitments | 0 | 0 |
Other debt | 0 | 0 |
Corporate equities | 149,697 | 131,574 |
Derivative and other contracts | 669 | 977 |
Netting | (2,088) | (4,378) |
Investments | 297 | 237 |
Physical commodities | 0 | 0 |
Total trading assets | 192,974 | 174,372 |
Investment securities - AFS | 27,522 | 29,120 |
Securities purchased under agreement to resell | 0 | |
Intangible assets | 0 | 0 |
Total assets | 220,496 | 203,492 |
Liabilities at Fair Value | ||
Deposits | 0 | 0 |
U.S. treasury and agency securities | 17,802 | 11,636 |
Other sovereign government obligations | 24,857 | 20,658 |
Corporate and other debt | 0 | 0 |
Corporate equities | 52,653 | 57,847 |
Derivative and other contracts | 332 | 708 |
Netting | (2,088) | (4,378) |
Physical commodities | 0 | |
Total trading liabilities | 95,644 | 90,849 |
Securities sold under agreement to repurchase | 0 | 0 |
Other secured financings | 0 | 0 |
Borrowings | 0 | 47 |
Total liabilities | 95,644 | 90,896 |
Recurring | Level 1 | Interest Rate Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 472 | 1,131 |
Liabilities at Fair Value | ||
Derivative and other contracts | 364 | 1,244 |
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 | 58 | 231 |
Liabilities at Fair Value | ||
Derivative and other contracts | 23 | 17 |
Recurring | Level 1 | Equity Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 1,101 | 1,185 |
Liabilities at Fair Value | ||
Derivative and other contracts | 1,001 | 1,162 |
Recurring | Level 1 | Commodity and Other Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 1,126 | 2,808 |
Liabilities at Fair Value | ||
Derivative and other contracts | 1,032 | 2,663 |
Recurring | Level 2 | ||
Assets at Fair Value | ||
U.S. treasury and agency securities | 26,888 | 20,392 |
Other sovereign government obligations | 7,825 | 5,497 |
State and municipal securities | 3,592 | 2,355 |
MABS | 2,364 | 1,691 |
Corporate bonds | 15,105 | 11,051 |
CDO | 445 | 602 |
Loans and lending commitments | 4,791 | 3,580 |
Other debt | 1,287 | 1,360 |
Corporate equities | 492 | 352 |
Derivative and other contracts | 69,015 | 75,981 |
Netting | (216,764) | (353,543) |
Investments | 523 | 197 |
Physical commodities | 1,024 | 112 |
Total trading assets | 133,351 | 123,170 |
Investment securities - AFS | 27,681 | 34,050 |
Securities purchased under agreement to resell | 302 | |
Intangible assets | 3 | 3 |
Total assets | 161,035 | 157,525 |
Liabilities at Fair Value | ||
Deposits | 157 | 21 |
U.S. treasury and agency securities | 24 | 61 |
Other sovereign government obligations | 2,016 | 2,430 |
Corporate and other debt | 7,141 | 6,121 |
Corporate equities | 82 | 54 |
Derivative and other contracts | 58,581 | 64,569 |
Netting | (216,764) | (353,543) |
Physical commodities | 1 | |
Total trading liabilities | 67,844 | 73,236 |
Securities sold under agreement to repurchase | 650 | 580 |
Other secured financings | 3,624 | 4,607 |
Borrowings | 43,928 | 37,081 |
Total liabilities | 116,203 | 115,525 |
Recurring | Level 2 | Interest Rate Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 178,704 | 300,406 |
Liabilities at Fair Value | ||
Derivative and other contracts | 162,239 | 285,379 |
Recurring | Level 2 | Credit Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 7,602 | 11,727 |
Liabilities at Fair Value | ||
Derivative and other contracts | 8,166 | 12,550 |
Recurring | Level 2 | Foreign Exchange Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 53,724 | 74,921 |
Liabilities at Fair Value | ||
Derivative and other contracts | 55,118 | 75,510 |
Recurring | Level 2 | Equity Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 40,359 | 35,736 |
Liabilities at Fair Value | ||
Derivative and other contracts | 44,666 | 37,828 |
Recurring | Level 2 | Commodity and Other Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 5,390 | 6,734 |
Liabilities at Fair Value | ||
Derivative and other contracts | 5,156 | 6,845 |
Recurring | Level 3 | ||
Assets at Fair Value | ||
U.S. treasury and agency securities | 0 | 74 |
Other sovereign government obligations | 1 | 6 |
State and municipal securities | 8 | 250 |
MABS | 423 | 217 |
Corporate bonds | 456 | 232 |
CDO | 84 | 63 |
Loans and lending commitments | 5,945 | 5,122 |
Other debt | 161 | 180 |
Corporate equities | 166 | 446 |
Derivative and other contracts | 8,300 | 5,629 |
Netting | (1,575) | (1,944) |
Investments | 1,020 | 958 |
Physical commodities | 0 | 0 |
Total trading assets | 16,564 | 13,177 |
Investment securities - AFS | 0 | 0 |
Securities purchased under agreement to resell | 0 | |
Intangible assets | 0 | 0 |
Total assets | 16,564 | 13,177 |
Liabilities at Fair Value | ||
Deposits | 47 | 42 |
U.S. treasury and agency securities | 0 | 0 |
Other sovereign government obligations | 0 | 0 |
Corporate and other debt | 3 | 36 |
Corporate equities | 22 | 35 |
Derivative and other contracts | 4,499 | 3,841 |
Netting | (1,575) | (1,944) |
Physical commodities | 0 | |
Total trading liabilities | 4,524 | 3,912 |
Securities sold under agreement to repurchase | 150 | 149 |
Other secured financings | 239 | 434 |
Borrowings | 2,984 | 2,014 |
Total liabilities | 7,944 | 6,551 |
Recurring | Level 3 | Interest Rate Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 1,763 | 1,373 |
Liabilities at Fair Value | ||
Derivative and other contracts | 545 | 953 |
Recurring | Level 3 | Credit Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 420 | 502 |
Liabilities at Fair Value | ||
Derivative and other contracts | 379 | 875 |
Recurring | Level 3 | Foreign Exchange Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 15 | 13 |
Liabilities at Fair Value | ||
Derivative and other contracts | 127 | 56 |
Recurring | Level 3 | Equity Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 3,530 | 1,708 |
Liabilities at Fair Value | ||
Derivative and other contracts | 2,322 | 1,524 |
Recurring | Level 3 | Commodity and Other Contracts | ||
Assets at Fair Value | ||
Derivative and other contracts | 4,147 | 3,977 |
Liabilities at Fair Value | ||
Derivative and other contracts | $ 2,701 | $ 2,377 |
Fair Value Disclosures (Rollfor
Fair Value Disclosures (Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Recurring - Level 3 - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets | |||
Assets | |||
Beginning balance | $ 0 | $ 5 | $ 6 |
Realized and unrealized gains (losses) | 0 | 0 | |
Purchases | 0 | 0 | |
Sales and issuances | 0 | 0 | |
Settlements | 0 | (1) | |
Net transfers | (5) | 0 | |
Ending balance | 0 | 5 | |
Unrealized gains (losses) | 0 | 0 | |
Deposits | |||
Liabilities | |||
Beginning balance | 42 | 19 | 0 |
Realized and unrealized (gains) losses | 3 | 0 | 1 |
Purchases | 0 | 0 | 0 |
Sales and Issuances | 12 | 23 | 18 |
Settlements | (3) | 0 | 0 |
Net transfers | (7) | 0 | 0 |
Ending balance | 47 | 42 | 19 |
Unrealized gains (losses) | (3) | 0 | (1) |
Securities Sold Under Agreements to Repurchase | |||
Liabilities | |||
Beginning balance | 149 | 151 | 153 |
Realized and unrealized (gains) losses | 0 | (2) | (2) |
Purchases | 0 | 0 | 0 |
Sales and Issuances | 1 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Net transfers | 0 | 0 | 0 |
Ending balance | 150 | 149 | 151 |
Unrealized gains (losses) | 0 | 2 | 2 |
Other Secured Financings | |||
Liabilities | |||
Beginning balance | 434 | 461 | 149 |
Realized and unrealized (gains) losses | 35 | 5 | (192) |
Purchases | 0 | 0 | 0 |
Sales and Issuances | 64 | 79 | 327 |
Settlements | (251) | (45) | (232) |
Net transfers | (43) | (66) | 409 |
Ending balance | 239 | 434 | 461 |
Unrealized gains (losses) | (28) | (5) | 181 |
Borrowings | |||
Liabilities | |||
Beginning balance | 2,014 | 1,988 | 1,934 |
Realized and unrealized (gains) losses | 196 | 19 | (61) |
Purchases | 0 | 0 | 0 |
Sales and Issuances | 1,968 | 648 | 882 |
Settlements | (424) | (305) | (364) |
Net transfers | (770) | (336) | (403) |
Ending balance | 2,984 | 2,014 | 1,988 |
Unrealized gains (losses) | (173) | (30) | 52 |
Trading Assets | U.S. Treasury and Agency Securities | |||
Assets | |||
Beginning balance | 74 | 0 | |
Realized and unrealized gains (losses) | (1) | (4) | |
Purchases | 0 | 72 | |
Sales and issuances | (240) | 0 | |
Settlements | 0 | 0 | |
Net transfers | 167 | 6 | |
Ending balance | 0 | 74 | 0 |
Unrealized gains (losses) | 0 | (4) | |
Trading Assets | Other Sovereign Government Obligations | |||
Assets | |||
Beginning balance | 6 | 4 | 41 |
Realized and unrealized gains (losses) | 0 | 1 | (1) |
Purchases | 0 | 4 | 2 |
Sales and issuances | (5) | (7) | (30) |
Settlements | 0 | 0 | 0 |
Net transfers | 0 | 4 | (8) |
Ending balance | 1 | 6 | 4 |
Unrealized gains (losses) | 0 | 0 | 0 |
Trading Assets | State and Municipal Securities | |||
Assets | |||
Beginning balance | 250 | 19 | 0 |
Realized and unrealized gains (losses) | 3 | 0 | 2 |
Purchases | 6 | 249 | 3 |
Sales and issuances | (83) | (18) | 0 |
Settlements | 0 | 0 | 0 |
Net transfers | (168) | 0 | 14 |
Ending balance | 8 | 250 | 19 |
Unrealized gains (losses) | 0 | 0 | 2 |
Trading Assets | MABS | |||
Assets | |||
Beginning balance | 217 | 438 | 347 |
Realized and unrealized gains (losses) | 47 | (69) | (13) |
Purchases | 289 | 82 | 226 |
Sales and issuances | (158) | (323) | (136) |
Settlements | (37) | 0 | 0 |
Net transfers | 65 | 89 | 14 |
Ending balance | 423 | 217 | 438 |
Unrealized gains (losses) | (7) | (77) | (20) |
Trading Assets | Corporate Bonds | |||
Assets | |||
Beginning balance | 232 | 267 | 386 |
Realized and unrealized gains (losses) | 22 | 9 | (44) |
Purchases | 381 | 310 | 374 |
Sales and issuances | (218) | (357) | (381) |
Settlements | 0 | 0 | (53) |
Net transfers | 39 | 3 | (15) |
Ending balance | 456 | 232 | 267 |
Unrealized gains (losses) | (4) | (20) | (44) |
Trading Assets | CDO | |||
Assets | |||
Beginning balance | 63 | 430 | 1,152 |
Realized and unrealized gains (losses) | 22 | 11 | 123 |
Purchases | 40 | 14 | 325 |
Sales and issuances | (31) | (300) | (798) |
Settlements | (9) | 0 | (344) |
Net transfers | (1) | (92) | (28) |
Ending balance | 84 | 63 | 430 |
Unrealized gains (losses) | 15 | (5) | (19) |
Trading Assets | Loans and Lending Commitments | |||
Assets | |||
Beginning balance | 5,122 | 5,936 | 5,874 |
Realized and unrealized gains (losses) | 182 | (79) | (42) |
Purchases | 3,616 | 2,261 | 3,216 |
Sales and issuances | (1,561) | (954) | (207) |
Settlements | (1,463) | (1,863) | (2,478) |
Net transfers | 49 | (179) | (427) |
Ending balance | 5,945 | 5,122 | 5,936 |
Unrealized gains (losses) | 131 | (80) | (76) |
Trading Assets | Other Debt | |||
Assets | |||
Beginning balance | 180 | 448 | 285 |
Realized and unrealized gains (losses) | 38 | 20 | (23) |
Purchases | 66 | 26 | 131 |
Sales and issuances | (171) | (51) | (5) |
Settlements | 0 | 0 | (81) |
Net transfers | 48 | (263) | 141 |
Ending balance | 161 | 180 | 448 |
Unrealized gains (losses) | 12 | (13) | (9) |
Trading Assets | Corporate Equities | |||
Assets | |||
Beginning balance | 446 | 434 | 272 |
Realized and unrealized gains (losses) | (54) | (2) | (1) |
Purchases | 173 | 242 | 374 |
Sales and issuances | (632) | (154) | (333) |
Settlements | 0 | 0 | 0 |
Net transfers | 233 | (74) | 122 |
Ending balance | 166 | 446 | 434 |
Unrealized gains (losses) | (6) | 0 | 11 |
Trading Assets | Net Derivative and Other Contracts | |||
Assets | |||
Beginning balance | 1,788 | (1,424) | (1,784) |
Realized and unrealized gains (losses) | 822 | 1,409 | 429 |
Purchases | 1,041 | 834 | 197 |
Sales and issuances | (601) | (455) | (710) |
Settlements | 1,147 | 1,349 | 291 |
Net transfers | (396) | 75 | 153 |
Ending balance | 3,801 | 1,788 | (1,424) |
Unrealized gains (losses) | 413 | 953 | 357 |
Trading Assets | Net Derivative and Other Contracts | Interest Rate Contracts | |||
Assets | |||
Beginning balance | 420 | 260 | (173) |
Realized and unrealized gains (losses) | 322 | 529 | (51) |
Purchases | 29 | 1 | 58 |
Sales and issuances | (18) | 0 | (54) |
Settlements | 608 | (83) | 207 |
Net transfers | (143) | (287) | 273 |
Ending balance | 1,218 | 420 | 260 |
Unrealized gains (losses) | 341 | 463 | 20 |
Trading Assets | Net Derivative and Other Contracts | Credit Contracts | |||
Assets | |||
Beginning balance | (373) | (844) | (743) |
Realized and unrealized gains (losses) | (43) | (176) | (172) |
Purchases | 0 | 0 | 19 |
Sales and issuances | (1) | (4) | (121) |
Settlements | 455 | 623 | 196 |
Net transfers | 3 | 28 | (23) |
Ending balance | 41 | (373) | (844) |
Unrealized gains (losses) | (18) | (167) | (179) |
Trading Assets | Net Derivative and Other Contracts | Foreign Exchange Contracts | |||
Assets | |||
Beginning balance | (43) | 141 | 151 |
Realized and unrealized gains (losses) | (108) | (27) | 53 |
Purchases | 0 | 0 | 4 |
Sales and issuances | (1) | 0 | (2) |
Settlements | 31 | (220) | (18) |
Net transfers | 9 | 63 | (47) |
Ending balance | (112) | (43) | 141 |
Unrealized gains (losses) | (89) | (23) | 52 |
Trading Assets | Net Derivative and Other Contracts | Equity Contracts | |||
Assets | |||
Beginning balance | 184 | (2,031) | (2,165) |
Realized and unrealized gains (losses) | 136 | 539 | 166 |
Purchases | 988 | 809 | 81 |
Sales and issuances | (524) | (337) | (311) |
Settlements | 396 | 1,073 | 22 |
Net transfers | 28 | 131 | 176 |
Ending balance | 1,208 | 184 | (2,031) |
Unrealized gains (losses) | 159 | 376 | 62 |
Trading Assets | Net Derivative and Other Contracts | Commodity and Other Contracts | |||
Assets | |||
Beginning balance | 1,600 | 1,050 | 1,146 |
Realized and unrealized gains (losses) | 515 | 544 | 433 |
Purchases | 24 | 24 | 35 |
Sales and issuances | (57) | (114) | (222) |
Settlements | (343) | (44) | (116) |
Net transfers | (293) | 140 | (226) |
Ending balance | 1,446 | 1,600 | 1,050 |
Unrealized gains (losses) | 20 | 304 | 402 |
Trading Assets | Investments | |||
Assets | |||
Beginning balance | 958 | 707 | 1,158 |
Realized and unrealized gains (losses) | 96 | (32) | (1) |
Purchases | 102 | 398 | 33 |
Sales and issuances | (57) | (75) | (139) |
Settlements | (78) | (59) | (188) |
Net transfers | (1) | 19 | (156) |
Ending balance | 1,020 | 958 | 707 |
Unrealized gains (losses) | 88 | (50) | (1) |
Trading Liabilities | Corporate and Other Debt | |||
Liabilities | |||
Beginning balance | 36 | 4 | 121 |
Realized and unrealized (gains) losses | 0 | 4 | (5) |
Purchases | (63) | (99) | (20) |
Sales and Issuances | 11 | 145 | 13 |
Settlements | 0 | 0 | (104) |
Net transfers | 19 | (18) | (1) |
Ending balance | 3 | 36 | 4 |
Unrealized gains (losses) | 0 | 0 | 5 |
Trading Liabilities | Corporate Equities | |||
Liabilities | |||
Beginning balance | 35 | 18 | 45 |
Realized and unrealized (gains) losses | (1) | (17) | (79) |
Purchases | (76) | (10) | (86) |
Sales and Issuances | 9 | 89 | 33 |
Settlements | 0 | 0 | 0 |
Net transfers | 55 | (45) | 105 |
Ending balance | 22 | 35 | 18 |
Unrealized gains (losses) | $ 0 | $ 0 | $ 79 |
Fair Value Disclosures (Valuati
Fair Value Disclosures (Valuation Techniques and Sensitivity of Unobservable Inputs Used in Recurring Level 3 Fair Value Measurements) (Details) - Level 3 $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / MWh | Dec. 31, 2016USD ($)$ / MWh | |
Recurring | U.S. Treasury and Agency Securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 0 | $ 74 |
Recurring | U.S. Treasury and Agency Securities | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable bond price | 96.00% | |
Recurring | U.S. Treasury and Agency Securities | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable bond price | 105.00% | |
Recurring | U.S. Treasury and Agency Securities | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable bond price | 102.00% | |
Recurring | State and Municipal Securities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | 8 | $ 250 |
Recurring | State and Municipal Securities | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable bond price | 53.00% | |
Recurring | State and Municipal Securities | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable bond price | 100.00% | |
Recurring | State and Municipal Securities | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable bond price | 91.00% | |
Recurring | MABS | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 423 | $ 217 |
Recurring | MABS | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable bond price | 0.00% | 0.00% |
Recurring | MABS | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable bond price | 95.00% | 86.00% |
Recurring | MABS | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable bond price | 26.00% | 27.00% |
Recurring | Corporate Bonds | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 456 | $ 232 |
Recurring | Corporate Bonds | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable bond price | 3.00% | 3.00% |
Recurring | Corporate Bonds | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable bond price | 134.00% | 130.00% |
Recurring | Corporate Bonds | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable bond price | 59.00% | 70.00% |
Recurring | Corporate Bonds | Discounted Cash Flow | Minimum | ||
Fair Value Inputs | ||
Recovery rate | 6.00% | |
Recurring | Corporate Bonds | Discounted Cash Flow | Maximum | ||
Fair Value Inputs | ||
Recovery rate | 36.00% | |
Recurring | Corporate Bonds | Discounted Cash Flow | Weighted Average | ||
Fair Value Inputs | ||
Recovery rate | 27.00% | |
Recurring | CDO | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 84 | $ 63 |
Recurring | CDO | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable bond price | 16.00% | 0.00% |
Recurring | CDO | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable bond price | 101.00% | 103.00% |
Recurring | CDO | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable bond price | 67.00% | 50.00% |
Recurring | Loans and Lending Commitments | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 5,945 | $ 5,122 |
Recurring | Loans and Lending Commitments | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable loan price | 55.00% | 45.00% |
Recurring | Loans and Lending Commitments | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable loan price | 102.00% | 100.00% |
Recurring | Loans and Lending Commitments | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable loan price | 95.00% | 84.00% |
Recurring | Loans and Lending Commitments | Discounted Cash Flow | ||
Fair Value Inputs | ||
WACC | 5.00% | |
Recurring | Loans and Lending Commitments | Discounted Cash Flow | Minimum | ||
Fair Value Inputs | ||
Capitalization rate | 4.00% | |
Recurring | Loans and Lending Commitments | Discounted Cash Flow | Maximum | ||
Fair Value Inputs | ||
Capitalization rate | 10.00% | |
Recurring | Loans and Lending Commitments | Discounted Cash Flow | Weighted Average | ||
Fair Value Inputs | ||
Capitalization rate | 4.00% | |
Recurring | Loans and Lending Commitments | Expected Recovery | Minimum | ||
Fair Value Inputs | ||
Asset coverage | 43.00% | |
Recurring | Loans and Lending Commitments | Expected Recovery | Maximum | ||
Fair Value Inputs | ||
Asset coverage | 100.00% | |
Recurring | Loans and Lending Commitments | Expected Recovery | Weighted Average | ||
Fair Value Inputs | ||
Asset coverage | 83.00% | |
Recurring | Loans and Lending Commitments | Margin Loan Model | Minimum | ||
Fair Value Inputs | ||
Discount rate | 0.00% | 2.00% |
Volatility Skew | 7.00% | 21.00% |
Recurring | Loans and Lending Commitments | Margin Loan Model | Maximum | ||
Fair Value Inputs | ||
Discount rate | 3.00% | 8.00% |
Volatility Skew | 41.00% | 63.00% |
Recurring | Loans and Lending Commitments | Margin Loan Model | Weighted Average | ||
Fair Value Inputs | ||
Discount rate | 1.00% | 3.00% |
Volatility Skew | 22.00% | 33.00% |
Recurring | Other Debt | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 161 | $ 180 |
Recurring | Other Debt | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable loan price | 1.00% | |
Recurring | Other Debt | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable loan price | 74.00% | |
Recurring | Other Debt | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable loan price | 23.00% | |
Recurring | Other Debt | Discounted Cash Flow | Minimum | ||
Fair Value Inputs | ||
Discount rate | 7.00% | 7.00% |
Recurring | Other Debt | Discounted Cash Flow | Maximum | ||
Fair Value Inputs | ||
Discount rate | 20.00% | 12.00% |
Recurring | Other Debt | Discounted Cash Flow | Weighted Average | ||
Fair Value Inputs | ||
Discount rate | 14.00% | 11.00% |
Recurring | Other Debt | Option Model | Minimum | ||
Fair Value Inputs | ||
At the money volatility | 17.00% | 16.00% |
Recurring | Other Debt | Option Model | Maximum | ||
Fair Value Inputs | ||
At the money volatility | 52.00% | 52.00% |
Recurring | Other Debt | Option Model | Weighted Average | ||
Fair Value Inputs | ||
At the money volatility | 52.00% | 52.00% |
Recurring | Corporate Equities | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 166 | $ 446 |
Recurring | Corporate Equities | Comparable Pricing | ||
Fair Value Inputs | ||
Comparable equity price | 100.00% | 100.00% |
Recurring | Interest Rate Contracts | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 1,218 | $ 420 |
Recurring | Interest Rate Contracts | Option Model | ||
Fair Value Inputs | ||
Inflation rate curve | 2.00% | |
Recurring | Interest Rate Contracts | Option Model | Simple Average | ||
Fair Value Inputs | ||
Inflation volatility | 44.00% | 40.00% |
Interest rate - Foreign exchange correlation | 44.00% | |
Interest rate curve correlation | 68.00% | |
Interest rate quanto correlation | 1.00% | |
Interest rate volatility skew | 41.00% | 55.00% |
Recurring | Interest Rate Contracts | Option Model | Median | ||
Fair Value Inputs | ||
Inflation volatility | 41.00% | 39.00% |
Interest rate - Foreign exchange correlation | 43.00% | |
Interest rate curve correlation | 72.00% | |
Interest rate quanto correlation | (5.00%) | |
Interest rate volatility skew | 47.00% | 56.00% |
Recurring | Interest Rate Contracts | Option Model | Minimum | ||
Fair Value Inputs | ||
Inflation volatility | 23.00% | 23.00% |
Interest rate - Foreign exchange correlation | 28.00% | |
Interest rate curve correlation | 28.00% | |
Interest rate quanto correlation | (17.00%) | |
Interest rate volatility skew | 31.00% | 19.00% |
Recurring | Interest Rate Contracts | Option Model | Maximum | ||
Fair Value Inputs | ||
Inflation volatility | 63.00% | 55.00% |
Interest rate - Foreign exchange correlation | 58.00% | |
Interest rate curve correlation | 96.00% | |
Interest rate quanto correlation | 31.00% | |
Interest rate volatility skew | 97.00% | 117.00% |
Recurring | Credit Contracts | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 41 | $ (373) |
Recurring | Credit Contracts | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Cash synthetic basis | 12.00% | 5.00% |
Comparable bond price | 0.00% | 0.00% |
Recurring | Credit Contracts | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Cash synthetic basis | 13.00% | 12.00% |
Comparable bond price | 75.00% | 70.00% |
Recurring | Credit Contracts | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Cash synthetic basis | 12.00% | 11.00% |
Comparable bond price | 25.00% | 23.00% |
Recurring | Credit Contracts | Correlation Model | Minimum | ||
Fair Value Inputs | ||
Credit correlation | 38.00% | 32.00% |
Recurring | Credit Contracts | Correlation Model | Maximum | ||
Fair Value Inputs | ||
Credit correlation | 100.00% | 70.00% |
Recurring | Credit Contracts | Correlation Model | Weighted Average | ||
Fair Value Inputs | ||
Credit correlation | 48.00% | 45.00% |
Recurring | Foreign Exchange Contracts | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ (112) | $ (43) |
Recurring | Foreign Exchange Contracts | Option Model | Simple Average | ||
Fair Value Inputs | ||
Contingency probability | 96.00% | |
Interest rate - Foreign exchange correlation | 56.00% | 44.00% |
Interest rate quanto correlation | 1.00% | |
Interest rate volatility skew | 41.00% | 55.00% |
Recurring | Foreign Exchange Contracts | Option Model | Median | ||
Fair Value Inputs | ||
Contingency probability | 95.00% | |
Interest rate - Foreign exchange correlation | 56.00% | 43.00% |
Interest rate quanto correlation | (5.00%) | |
Interest rate volatility skew | 47.00% | 56.00% |
Recurring | Foreign Exchange Contracts | Option Model | Minimum | ||
Fair Value Inputs | ||
Contingency probability | 95.00% | |
Interest rate - Foreign exchange correlation | 54.00% | 28.00% |
Interest rate quanto correlation | (17.00%) | |
Interest rate volatility skew | 31.00% | 34.00% |
Recurring | Foreign Exchange Contracts | Option Model | Maximum | ||
Fair Value Inputs | ||
Contingency probability | 100.00% | |
Interest rate - Foreign exchange correlation | 57.00% | 58.00% |
Interest rate quanto correlation | 31.00% | |
Interest rate volatility skew | 97.00% | 117.00% |
Recurring | Equity Contracts | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 1,208 | $ 184 |
Recurring | Equity Contracts | Option Model | Simple Average | ||
Fair Value Inputs | ||
Equity - Interest rate correlation | 18.00% | 12.00% |
Recurring | Equity Contracts | Option Model | Median | ||
Fair Value Inputs | ||
Equity - Interest rate correlation | 20.00% | 4.00% |
Recurring | Equity Contracts | Option Model | Minimum | ||
Fair Value Inputs | ||
At the money volatility | 7.00% | 7.00% |
Equity - Equity correlation | 5.00% | 25.00% |
Equity - Foreign exchange correlation | (55.00%) | (63.00%) |
Equity - Interest rate correlation | (7.00%) | (8.00%) |
Volatility Skew | (5.00%) | (4.00%) |
Recurring | Equity Contracts | Option Model | Maximum | ||
Fair Value Inputs | ||
At the money volatility | 54.00% | 66.00% |
Equity - Equity correlation | 99.00% | 99.00% |
Equity - Foreign exchange correlation | 40.00% | 30.00% |
Equity - Interest rate correlation | 49.00% | 52.00% |
Volatility Skew | 0.00% | 0.00% |
Recurring | Equity Contracts | Option Model | Weighted Average | ||
Fair Value Inputs | ||
At the money volatility | 32.00% | 33.00% |
Equity - Equity correlation | 76.00% | 73.00% |
Equity - Foreign exchange correlation | 36.00% | (43.00%) |
Volatility Skew | (1.00%) | (1.00%) |
Recurring | Commodity and Other Contracts | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 1,446 | $ 1,600 |
Recurring | Commodity and Other Contracts | Option Model | Minimum | ||
Fair Value Inputs | ||
Commodity volatility | 7.00% | 6.00% |
Cross commodity correlation | 5.00% | 5.00% |
Forward power price | $ / MWh | 4 | 7 |
Recurring | Commodity and Other Contracts | Option Model | Maximum | ||
Fair Value Inputs | ||
Commodity volatility | 205.00% | 130.00% |
Cross commodity correlation | 99.00% | 99.00% |
Forward power price | $ / MWh | 102 | 90 |
Recurring | Commodity and Other Contracts | Option Model | Weighted Average | ||
Fair Value Inputs | ||
Commodity volatility | 17.00% | 18.00% |
Cross commodity correlation | 92.00% | 92.00% |
Forward power price | $ / MWh | 31 | 32 |
Recurring | Investments | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 1,020 | $ 958 |
Recurring | Investments | Comparable Pricing | Minimum | ||
Fair Value Inputs | ||
Comparable equity price | 45.00% | 75.00% |
Recurring | Investments | Comparable Pricing | Maximum | ||
Fair Value Inputs | ||
Comparable equity price | 100.00% | 100.00% |
Recurring | Investments | Comparable Pricing | Weighted Average | ||
Fair Value Inputs | ||
Comparable equity price | 92.00% | 93.00% |
Recurring | Investments | Discounted Cash Flow | ||
Fair Value Inputs | ||
WACC | 10.00% | |
Recurring | Investments | Discounted Cash Flow | Minimum | ||
Fair Value Inputs | ||
Exit multiple | 8 | 10 |
WACC | 8.00% | |
Recurring | Investments | Discounted Cash Flow | Maximum | ||
Fair Value Inputs | ||
Exit multiple | 11 | 24 |
WACC | 15.00% | |
Recurring | Investments | Discounted Cash Flow | Weighted Average | ||
Fair Value Inputs | ||
Exit multiple | 10 | 11 |
WACC | 9.00% | |
Recurring | Investments | Market Approach | Minimum | ||
Fair Value Inputs | ||
EBITDA multiple | 6 | 6 |
Recurring | Investments | Market Approach | Maximum | ||
Fair Value Inputs | ||
EBITDA multiple | 25 | 24 |
Recurring | Investments | Market Approach | Weighted Average | ||
Fair Value Inputs | ||
EBITDA multiple | 11 | 12 |
Recurring | Securities Sold Under Agreements to Repurchase | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Liabilities | $ 150 | $ 149 |
Recurring | Securities Sold Under Agreements to Repurchase | Discounted Cash Flow | Minimum | ||
Fair Value Inputs | ||
Funding spread | 1.07% | 1.18% |
Recurring | Securities Sold Under Agreements to Repurchase | Discounted Cash Flow | Maximum | ||
Fair Value Inputs | ||
Funding spread | 1.26% | 1.27% |
Recurring | Securities Sold Under Agreements to Repurchase | Discounted Cash Flow | Weighted Average | ||
Fair Value Inputs | ||
Funding spread | 1.20% | 1.21% |
Recurring | Other Secured Financings | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Liabilities | $ 239 | $ 434 |
Recurring | Other Secured Financings | Discounted Cash Flow | ||
Fair Value Inputs | ||
Discount rate | 4.00% | |
Recurring | Other Secured Financings | Discounted Cash Flow | Minimum | ||
Fair Value Inputs | ||
Funding spread | 0.39% | 0.63% |
Recurring | Other Secured Financings | Discounted Cash Flow | Maximum | ||
Fair Value Inputs | ||
Funding spread | 0.76% | 0.92% |
Recurring | Other Secured Financings | Discounted Cash Flow | Weighted Average | ||
Fair Value Inputs | ||
Funding spread | 0.57% | 0.78% |
Recurring | Other Secured Financings | Option Model | ||
Fair Value Inputs | ||
Volatility Skew | (1.00%) | (1.00%) |
Recurring | Other Secured Financings | Option Model | Minimum | ||
Fair Value Inputs | ||
At the money volatility | 10.00% | |
Recurring | Other Secured Financings | Option Model | Maximum | ||
Fair Value Inputs | ||
At the money volatility | 40.00% | |
Recurring | Other Secured Financings | Option Model | Weighted Average | ||
Fair Value Inputs | ||
At the money volatility | 26.00% | |
Recurring | Borrowings | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Liabilities | $ 2,984 | $ 2,014 |
Recurring | Borrowings | Option Model | Simple Average | ||
Fair Value Inputs | ||
Equity volatility discount | 10.00% | |
Recurring | Borrowings | Option Model | Median | ||
Fair Value Inputs | ||
Equity volatility discount | 10.00% | |
Recurring | Borrowings | Option Model | Minimum | ||
Fair Value Inputs | ||
At the money volatility | 5.00% | 7.00% |
Equity - Equity correlation | 39.00% | 35.00% |
Equity - Foreign exchange correlation | (55.00%) | (63.00%) |
Equity volatility discount | 7.00% | |
Volatility Skew | (2.00%) | (2.00%) |
Recurring | Borrowings | Option Model | Maximum | ||
Fair Value Inputs | ||
At the money volatility | 35.00% | 42.00% |
Equity - Equity correlation | 95.00% | 99.00% |
Equity - Foreign exchange correlation | 10.00% | 13.00% |
Equity volatility discount | 11.00% | |
Volatility Skew | 0.00% | 0.00% |
Recurring | Borrowings | Option Model | Weighted Average | ||
Fair Value Inputs | ||
At the money volatility | 22.00% | 30.00% |
Equity - Equity correlation | 86.00% | 84.00% |
Equity - Foreign exchange correlation | (18.00%) | (40.00%) |
Volatility Skew | 0.00% | (1.00%) |
Nonrecurring | Loans | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Assets | $ 924 | $ 2,443 |
Nonrecurring | Loans | Corporate Loan Model | Minimum | ||
Fair Value Inputs | ||
Credit spread | 0.93% | 0.90% |
Nonrecurring | Loans | Corporate Loan Model | Maximum | ||
Fair Value Inputs | ||
Credit spread | 5.63% | 4.87% |
Nonrecurring | Loans | Corporate Loan Model | Weighted Average | ||
Fair Value Inputs | ||
Credit spread | 2.39% | 2.08% |
Nonrecurring | Loans | Expected Recovery | Minimum | ||
Fair Value Inputs | ||
Asset coverage | 95.00% | 73.00% |
Nonrecurring | Loans | Expected Recovery | Maximum | ||
Fair Value Inputs | ||
Asset coverage | 99.00% | 99.00% |
Nonrecurring | Loans | Expected Recovery | Weighted Average | ||
Fair Value Inputs | ||
Asset coverage | 95.00% | 97.00% |
Fair Value Disclosures (Fair Va
Fair Value Disclosures (Fair Value of Investments Measured at NAV) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value of Investments that Calculate Net Asset Value | ||
Fair Value | $ 2,564 | $ 2,816 |
Commitment | 495 | 475 |
Private Equity Funds | ||
Fair Value of Investments that Calculate Net Asset Value | ||
Fair Value | 1,674 | 1,566 |
Commitment | 308 | 335 |
Fair Value of Nonredeemable Funds by Contractual Maturity | ||
Less than 5 years | 473 | |
5-10 years | 1,033 | |
Over 10 years | 168 | |
Total | 1,674 | |
Real Estate Funds | ||
Fair Value of Investments that Calculate Net Asset Value | ||
Fair Value | 800 | 1,103 |
Commitment | 183 | 136 |
Fair Value of Nonredeemable Funds by Contractual Maturity | ||
Less than 5 years | 62 | |
5-10 years | 499 | |
Over 10 years | 239 | |
Total | 800 | |
Hedge Funds | ||
Fair Value of Investments that Calculate Net Asset Value | ||
Fair Value | 90 | 147 |
Commitment | $ 4 | $ 4 |
Fair Value Disclosures (Earning
Fair Value Disclosures (Earnings Impact of Instruments under the Fair Value Option) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Securities Purchased Under Agreements to Resell | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | $ 1 | $ 4 | $ 4 |
Deposits | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (3) | (2) | |
Securities Sold Under Agreements to Repurchase | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (8) | (7) | 7 |
Borrowings | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (4,950) | (1,190) | 1,939 |
Trading Revenues | Securities Purchased Under Agreements to Resell | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (2) | (3) | (6) |
Trading Revenues | Deposits | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (3) | (1) | |
Trading Revenues | Securities Sold Under Agreements to Repurchase | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | 10 | 6 | 13 |
Trading Revenues | Borrowings | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (4,507) | (707) | 2,467 |
Interest Income (Expense) | Securities Purchased Under Agreements to Resell | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | 3 | 7 | 10 |
Interest Income (Expense) | Deposits | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | 0 | (1) | |
Interest Income (Expense) | Securities Sold Under Agreements to Repurchase | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | (18) | (13) | (6) |
Interest Income (Expense) | Borrowings | |||
Fair Value Option Quantitative Disclosures | |||
Gains (losses) included in net revenues | $ (443) | $ (483) | $ (528) |
Fair Value Disclosures (Gains (
Fair Value Disclosures (Gains (Losses) Due to Changes in Instrument-Specific Credit Risk) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value disclosure | |||
Cumulative pre-tax DVA gain (loss) recognized in AOCI | $ (1,831) | $ (921) | |
Loans and Other Debt | OCI | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | 0 | 0 | $ 0 |
Loans and Other Debt | Trading Revenues | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | 159 | (71) | (193) |
Lending Commitments | OCI | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | 0 | 0 | 0 |
Lending Commitments | Trading Revenues | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | (2) | 4 | 12 |
Securities Sold Under Agreements to Repurchase | OCI | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | (7) | ||
Securities Sold Under Agreements to Repurchase | Trading Revenues | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | 0 | ||
Borrowings | OCI | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | (903) | (460) | 0 |
Borrowings | Trading Revenues | |||
Fair Value disclosure | |||
Gains (losses) due to changes in instrument-specific credit risk | $ (12) | $ 31 | $ 618 |
Fair Value Disclosures (Borrowi
Fair Value Disclosures (Borrowings Measured at Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Borrowings at fair value | $ 46,912 | $ 39,142 |
Recurring | ||
Fair Value Measurements | ||
Borrowings at fair value | 46,912 | 39,142 |
Recurring | Equity | ||
Fair Value Measurements | ||
Borrowings at fair value | 25,903 | 21,066 |
Recurring | Interest Rates | ||
Fair Value Measurements | ||
Borrowings at fair value | 19,230 | 16,051 |
Recurring | Foreign Exchange | ||
Fair Value Measurements | ||
Borrowings at fair value | 666 | 1,114 |
Recurring | Credit Contracts | ||
Fair Value Measurements | ||
Borrowings at fair value | 815 | 647 |
Recurring | Commodities | ||
Fair Value Measurements | ||
Borrowings at fair value | $ 298 | $ 264 |
Fair Value Disclosures (Excess
Fair Value Disclosures (Excess of Contractual Principal Amount Over Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures | ||
Loans and other debt | $ 13,481 | $ 13,495 |
Loans 90 or more days past due and/or on nonaccrual status | 11,253 | 11,502 |
Borrowings | $ 71 | $ 720 |
Fair Value Disclosures (Fair 65
Fair Value Disclosures (Fair Value of Loans in Nonaccrual Status) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures | ||
Nonaccrual loans | $ 1,240 | $ 1,536 |
Nonaccrual loans 90 or more days past due | $ 779 | $ 787 |
Fair Value Disclosures (Asset66
Fair Value Disclosures (Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - Nonrecurring - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value | |||
Loans | $ 2,318 | $ 4,913 | |
Other assets-Other investments | 144 | 123 | |
Other assets-Premises, equipment and software costs | 25 | ||
Total assets | 2,462 | 5,061 | |
Other liabilities and accrued expenses-Lending commitments | 196 | 226 | |
Total liabilities | 196 | 226 | |
Assets | |||
Fair Value | |||
Gains (losses) included in net revenues | (73) | (90) | $ (289) |
Loans | |||
Fair Value | |||
Gains (losses) included in net revenues | 18 | 40 | (220) |
Other Assets-Other Investments | |||
Fair Value | |||
Gains (losses) included in net revenues | (66) | (52) | (3) |
Other Assets-Premises, Equipment and Software Costs | |||
Fair Value | |||
Gains (losses) included in net revenues | (25) | (76) | (44) |
Intangible Assets | |||
Fair Value | |||
Gains (losses) included in net revenues | 0 | (2) | 0 |
Other Assets | |||
Fair Value | |||
Gains (losses) included in net revenues | 0 | 0 | (22) |
Liabilities | |||
Fair Value | |||
Gains (losses) included in net revenues | 75 | 121 | (207) |
Other Liabilities and Accrued Expenses-Lending Commitments | |||
Fair Value | |||
Gains (losses) included in net revenues | 75 | 121 | $ (207) |
Level 2 | |||
Fair Value | |||
Loans | 1,394 | 2,470 | |
Other assets-Other investments | 0 | 0 | |
Other assets-Premises, equipment and software costs | 22 | ||
Total assets | 1,394 | 2,492 | |
Other liabilities and accrued expenses-Lending commitments | 158 | 166 | |
Total liabilities | 158 | 166 | |
Level 3 | |||
Fair Value | |||
Loans | 924 | 2,443 | |
Other assets-Other investments | 144 | 123 | |
Other assets-Premises, equipment and software costs | 3 | ||
Total assets | 1,068 | 2,569 | |
Other liabilities and accrued expenses-Lending commitments | 38 | 60 | |
Total liabilities | $ 38 | $ 60 |
Fair Value Disclosures (Financi
Fair Value Disclosures (Financial Instruments Not Measured at Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial Assets | |||
Cash and due from banks | $ 24,816 | $ 22,017 | $ 19,827 |
Interest bearing deposits with banks | 21,348 | 21,364 | 34,256 |
Restricted cash | 34,231 | 33,979 | $ 31,469 |
Securities purchased under agreements to resell | 84,258 | 101,955 | |
Securities borrowed | 124,010 | 125,236 | |
Customer and other receivables | 56,187 | 46,460 | |
Loans | 92,953 | 81,704 | |
Financial Liabilities | |||
Deposits | 159,436 | 155,863 | |
Securities sold under agreements to repurchase | 56,424 | 54,628 | |
Securities loaned | 13,592 | 15,844 | |
Other secured financings | 11,271 | 11,118 | |
Customer and other payables | 191,510 | 190,513 | |
Borrowings | 192,582 | 165,716 | |
Additional Disclosures | |||
Commitment amount | 100,151 | 97,409 | |
Carrying Value | |||
Financial Assets | |||
Cash and due from banks | 24,816 | 22,017 | |
Interest bearing deposits with banks | 21,348 | 21,364 | |
Restricted cash | 34,231 | 33,979 | |
Investment securities - HTM securities | 23,599 | 16,922 | |
Securities purchased under agreements to resell | 84,258 | 101,653 | |
Securities borrowed | 124,010 | 125,236 | |
Customer and other receivables | 51,269 | 41,679 | |
Loans | 104,126 | 94,248 | |
Other assets | 433 | ||
Financial Liabilities | |||
Deposits | 159,232 | 155,800 | |
Securities sold under agreements to repurchase | 55,624 | 53,899 | |
Securities loaned | 13,592 | 15,844 | |
Other secured financings | 7,408 | 6,077 | |
Customer and other payables | 188,464 | 187,497 | |
Borrowings | 145,670 | 126,574 | |
Fair Value | |||
Financial Assets | |||
Cash and due from banks | 24,816 | 22,017 | |
Interest bearing deposits with banks | 21,348 | 21,364 | |
Restricted cash | 34,231 | 33,979 | |
Investment securities - HTM securities | 23,081 | 16,453 | |
Securities purchased under agreements to resell | 84,217 | 101,655 | |
Securities borrowed | 124,019 | 125,240 | |
Customer and other receivables | 51,143 | 41,537 | |
Loans | 104,218 | 95,027 | |
Other assets | 433 | ||
Financial Liabilities | |||
Deposits | 159,232 | 155,800 | |
Securities sold under agreements to repurchase | 55,619 | 53,913 | |
Securities loaned | 13,592 | 15,853 | |
Other secured financings | 7,418 | 6,082 | |
Customer and other payables | 188,464 | 187,497 | |
Borrowings | 151,722 | 130,412 | |
Additional Disclosures | |||
Commitment amount | 794 | 1,241 | |
Fair Value | Level 1 | |||
Financial Assets | |||
Cash and due from banks | 24,816 | 22,017 | |
Interest bearing deposits with banks | 21,348 | 21,364 | |
Restricted cash | 34,231 | 33,979 | |
Investment securities - HTM securities | 11,119 | 5,557 | |
Securities purchased under agreements to resell | 0 | 0 | |
Securities borrowed | 0 | 0 | |
Customer and other receivables | 0 | 0 | |
Loans | 0 | 0 | |
Other assets | 0 | ||
Financial Liabilities | |||
Deposits | 0 | 0 | |
Securities sold under agreements to repurchase | 0 | 0 | |
Securities loaned | 0 | 0 | |
Other secured financings | 0 | 0 | |
Customer and other payables | 0 | 0 | |
Borrowings | 0 | 0 | |
Fair Value | Level 2 | |||
Financial Assets | |||
Cash and due from banks | 0 | 0 | |
Interest bearing deposits with banks | 0 | 0 | |
Restricted cash | 0 | 0 | |
Investment securities - HTM securities | 11,673 | 10,896 | |
Securities purchased under agreements to resell | 78,239 | 97,825 | |
Securities borrowed | 124,018 | 125,093 | |
Customer and other receivables | 47,159 | 36,962 | |
Loans | 21,290 | 20,906 | |
Other assets | 433 | ||
Financial Liabilities | |||
Deposits | 159,232 | 155,800 | |
Securities sold under agreements to repurchase | 51,752 | 50,941 | |
Securities loaned | 13,191 | 15,853 | |
Other secured financings | 5,987 | 4,792 | |
Customer and other payables | 188,464 | 187,497 | |
Borrowings | 151,692 | 130,361 | |
Additional Disclosures | |||
Commitment amount | 620 | 973 | |
Fair Value | Level 3 | |||
Financial Assets | |||
Cash and due from banks | 0 | 0 | |
Interest bearing deposits with banks | 0 | 0 | |
Restricted cash | 0 | 0 | |
Investment securities - HTM securities | 289 | 0 | |
Securities purchased under agreements to resell | 5,978 | 3,830 | |
Securities borrowed | 1 | 147 | |
Customer and other receivables | 3,984 | 4,575 | |
Loans | 82,928 | 74,121 | |
Other assets | 0 | ||
Financial Liabilities | |||
Deposits | 0 | 0 | |
Securities sold under agreements to repurchase | 3,867 | 2,972 | |
Securities loaned | 401 | 0 | |
Other secured financings | 1,431 | 1,290 | |
Customer and other payables | 0 | 0 | |
Borrowings | 30 | 51 | |
Additional Disclosures | |||
Commitment amount | $ 174 | $ 268 |
Derivative Instruments and He68
Derivative Instruments and Hedging Activities (Derivative Fair Values) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Derivative Assets | ||||
Gross derivatives | $ 298,411 | $ 442,452 | ||
Amounts offset: Counterparty netting | (224,768) | (363,572) | ||
Amounts offset: Cash collateral netting | (42,830) | (47,674) | ||
Total in Trading Assets | 30,813 | 31,206 | ||
Amounts not offset: Financial instruments collateral | (12,363) | (10,293) | ||
Amounts not offset: Other cash collateral | (4) | (124) | ||
Net amounts | 18,446 | 20,789 | ||
Derivative assets not subject to legally enforceable master netting or collateral agreements | 3,154 | 3,656 | ||
Derivative Liabilities | ||||
Gross derivatives | 283,839 | 428,983 | ||
Counterparty netting | (224,768) | (363,572) | ||
Cash collateral netting | (32,376) | (36,096) | ||
Total in Trading Liabilities | 26,695 | 29,315 | ||
Amounts not offset against financial instruments collateral | (5,935) | (8,223) | ||
Amounts not offset against other cash collateral | (32) | (11) | ||
Net amounts | 20,728 | 21,081 | ||
Derivative liabilities not subject to legally enforceable master netting or collateral agreements | 3,751 | 3,497 | ||
Decrease of gross derivative assets | $ 62,000 | $ 13,000 | ||
Decrease of gross derivative liabilities | $ 59,000 | $ 20,000 | ||
Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 270,993 | 316,493 | ||
Amounts offset: Counterparty netting | (201,051) | (243,488) | ||
Amounts offset: Cash collateral netting | (42,141) | (45,875) | ||
Total in Trading Assets | 27,801 | 27,130 | ||
Amounts not offset: Financial instruments collateral | (12,363) | (10,293) | ||
Amounts not offset: Other cash collateral | (4) | (124) | ||
Net amounts | 15,434 | 16,713 | ||
Derivative Liabilities | ||||
Gross derivatives | 257,471 | 299,588 | ||
Counterparty netting | (201,051) | (243,488) | ||
Cash collateral netting | (31,892) | (30,405) | ||
Total in Trading Liabilities | 24,528 | 25,695 | ||
Amounts not offset against financial instruments collateral | (5,523) | (7,638) | ||
Amounts not offset against other cash collateral | (18) | (10) | ||
Net amounts | 18,987 | 18,047 | ||
Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 4,786 | 103,698 | ||
Amounts offset: Counterparty netting | (3,856) | (100,477) | ||
Amounts offset: Cash collateral netting | (689) | (1,799) | ||
Total in Trading Assets | 241 | 1,422 | ||
Amounts not offset: Financial instruments collateral | 0 | 0 | ||
Amounts not offset: Other cash collateral | 0 | 0 | ||
Net amounts | 241 | 1,422 | ||
Derivative Liabilities | ||||
Gross derivatives | 4,433 | 107,417 | ||
Counterparty netting | (3,856) | (100,477) | ||
Cash collateral netting | (484) | (5,691) | ||
Total in Trading Liabilities | 93 | 1,249 | ||
Amounts not offset against financial instruments collateral | 0 | 0 | ||
Amounts not offset against other cash collateral | (14) | (1) | ||
Net amounts | 79 | 1,248 | ||
Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 22,632 | 22,261 | ||
Amounts offset: Counterparty netting | (19,861) | (19,607) | ||
Amounts offset: Cash collateral netting | 0 | 0 | ||
Total in Trading Assets | 2,771 | 2,654 | ||
Amounts not offset: Financial instruments collateral | 0 | 0 | ||
Amounts not offset: Other cash collateral | 0 | 0 | ||
Net amounts | 2,771 | 2,654 | ||
Derivative Liabilities | ||||
Gross derivatives | 21,935 | 21,978 | ||
Counterparty netting | (19,861) | (19,607) | ||
Cash collateral netting | 0 | 0 | ||
Total in Trading Liabilities | 2,074 | 2,371 | ||
Amounts not offset against financial instruments collateral | (412) | (585) | ||
Amounts not offset against other cash collateral | 0 | 0 | ||
Net amounts | 1,662 | 1,786 | ||
Designated as Accounting Hedges | ||||
Derivative Assets | ||||
Gross derivatives | 1,120 | 3,240 | ||
Derivative Liabilities | ||||
Gross derivatives | 197 | 764 | ||
Designated as Accounting Hedges | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 1,114 | 2,173 | ||
Derivative Liabilities | ||||
Gross derivatives | 139 | 92 | ||
Designated as Accounting Hedges | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 6 | 1,067 | ||
Derivative Liabilities | ||||
Gross derivatives | 58 | 672 | ||
Designated as Accounting Hedges | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 0 | ||
Derivative Liabilities | ||||
Gross derivatives | 0 | 0 | ||
Designated as Accounting Hedges | Interest Rate Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 1,057 | 2,973 | ||
Derivative Liabilities | ||||
Gross derivatives | 68 | 724 | ||
Designated as Accounting Hedges | Interest Rate Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 1,057 | 1,924 | ||
Derivative Liabilities | ||||
Gross derivatives | 67 | 77 | ||
Designated as Accounting Hedges | Interest Rate Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 1,049 | ||
Derivative Liabilities | ||||
Gross derivatives | 1 | 647 | ||
Designated as Accounting Hedges | Interest Rate Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 0 | ||
Derivative Liabilities | ||||
Gross derivatives | 0 | 0 | ||
Designated as Accounting Hedges | Foreign Exchange Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 63 | 267 | ||
Derivative Liabilities | ||||
Gross derivatives | 129 | 40 | ||
Designated as Accounting Hedges | Foreign Exchange Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 57 | 249 | ||
Derivative Liabilities | ||||
Gross derivatives | 72 | 15 | ||
Designated as Accounting Hedges | Foreign Exchange Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 6 | 18 | ||
Derivative Liabilities | ||||
Gross derivatives | 57 | 25 | ||
Designated as Accounting Hedges | Foreign Exchange Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 0 | ||
Derivative Liabilities | ||||
Gross derivatives | 0 | 0 | ||
Not Designated as Accounting Hedges | ||||
Derivative Assets | ||||
Gross derivatives | 297,291 | 439,212 | ||
Derivative Liabilities | ||||
Gross derivatives | 283,642 | 428,219 | ||
Not Designated as Accounting Hedges | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 269,879 | 314,320 | ||
Derivative Liabilities | ||||
Gross derivatives | 257,332 | 299,496 | ||
Not Designated as Accounting Hedges | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 4,780 | 102,631 | ||
Derivative Liabilities | ||||
Gross derivatives | 4,375 | 106,745 | ||
Not Designated as Accounting Hedges | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 22,632 | 22,261 | ||
Derivative Liabilities | ||||
Gross derivatives | 21,935 | 21,978 | ||
Not Designated as Accounting Hedges | Interest Rate Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 179,882 | 299,937 | ||
Derivative Liabilities | ||||
Gross derivatives | 163,080 | 286,852 | ||
Not Designated as Accounting Hedges | Interest Rate Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 177,948 | 200,336 | ||
Derivative Liabilities | ||||
Gross derivatives | 161,758 | 183,063 | ||
Not Designated as Accounting Hedges | Interest Rate Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 1,700 | 99,217 | ||
Derivative Liabilities | ||||
Gross derivatives | 1,178 | 103,392 | ||
Not Designated as Accounting Hedges | Interest Rate Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 234 | 384 | ||
Derivative Liabilities | ||||
Gross derivatives | 144 | 397 | ||
Not Designated as Accounting Hedges | Credit Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 8,022 | 12,229 | ||
Derivative Liabilities | ||||
Gross derivatives | 8,545 | 13,425 | ||
Not Designated as Accounting Hedges | Credit Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 5,740 | 9,837 | ||
Derivative Liabilities | ||||
Gross derivatives | 6,273 | 11,024 | ||
Not Designated as Accounting Hedges | Credit Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 2,282 | 2,392 | ||
Derivative Liabilities | ||||
Gross derivatives | 2,272 | 2,401 | ||
Not Designated as Accounting Hedges | Credit Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 0 | ||
Derivative Liabilities | ||||
Gross derivatives | 0 | 0 | ||
Not Designated as Accounting Hedges | Foreign Exchange Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 53,734 | 74,898 | ||
Derivative Liabilities | ||||
Gross derivatives | 55,139 | 75,543 | ||
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 52,878 | 73,645 | ||
Derivative Liabilities | ||||
Gross derivatives | 54,191 | 74,575 | ||
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 798 | 1,022 | ||
Derivative Liabilities | ||||
Gross derivatives | 925 | 952 | ||
Not Designated as Accounting Hedges | Foreign Exchange Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 58 | 231 | ||
Derivative Liabilities | ||||
Gross derivatives | 23 | 16 | ||
Not Designated as Accounting Hedges | Equity Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 44,990 | 38,629 | ||
Derivative Liabilities | ||||
Gross derivatives | 47,989 | 40,514 | ||
Not Designated as Accounting Hedges | Equity Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 24,452 | 20,710 | ||
Derivative Liabilities | ||||
Gross derivatives | 27,993 | 22,531 | ||
Not Designated as Accounting Hedges | Equity Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 0 | ||
Derivative Liabilities | ||||
Gross derivatives | 0 | 0 | ||
Not Designated as Accounting Hedges | Equity Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 20,538 | 17,919 | ||
Derivative Liabilities | ||||
Gross derivatives | 19,996 | 17,983 | ||
Not Designated as Accounting Hedges | Commodity and Other Contracts | ||||
Derivative Assets | ||||
Gross derivatives | 10,663 | 13,519 | ||
Derivative Liabilities | ||||
Gross derivatives | 8,889 | 11,885 | ||
Not Designated as Accounting Hedges | Commodity and Other Contracts | Bilateral OTC | ||||
Derivative Assets | ||||
Gross derivatives | 8,861 | 9,792 | ||
Derivative Liabilities | ||||
Gross derivatives | 7,117 | 8,303 | ||
Not Designated as Accounting Hedges | Commodity and Other Contracts | Cleared OTC | ||||
Derivative Assets | ||||
Gross derivatives | 0 | 0 | ||
Derivative Liabilities | ||||
Gross derivatives | 0 | 0 | ||
Not Designated as Accounting Hedges | Commodity and Other Contracts | Exchange Traded | ||||
Derivative Assets | ||||
Gross derivatives | 1,802 | 3,727 | ||
Derivative Liabilities | ||||
Gross derivatives | $ 1,772 | $ 3,582 |
Derivative Instruments and He69
Derivative Instruments and Hedging Activities (Derivative Notionals) (Details) - USD ($) $ in Billions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Notional Amount | ||
Derivative assets | $ 16,460 | $ 15,286 |
Derivative liabilities | 15,100 | 13,307 |
Bilateral OTC | ||
Derivatives, Notional Amount | ||
Derivative assets | 6,660 | 5,940 |
Derivative liabilities | 6,907 | 5,780 |
Cleared OTC | ||
Derivatives, Notional Amount | ||
Derivative assets | 6,671 | 6,426 |
Derivative liabilities | 6,587 | 6,284 |
Exchange Traded | ||
Derivatives, Notional Amount | ||
Derivative assets | 3,129 | 2,920 |
Derivative liabilities | 1,606 | 1,243 |
Designated as Accounting Hedges | ||
Derivatives, Notional Amount | ||
Derivative assets | 70 | 74 |
Derivative liabilities | 110 | 56 |
Designated as Accounting Hedges | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 66 | 68 |
Derivative liabilities | 104 | 54 |
Designated as Accounting Hedges | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 4 | 6 |
Derivative liabilities | 6 | 2 |
Designated as Accounting Hedges | Bilateral OTC | ||
Derivatives, Notional Amount | ||
Derivative assets | 24 | 36 |
Derivative liabilities | 6 | 3 |
Designated as Accounting Hedges | Bilateral OTC | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 20 | 30 |
Derivative liabilities | 2 | 2 |
Designated as Accounting Hedges | Bilateral OTC | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 4 | 6 |
Derivative liabilities | 4 | 1 |
Designated as Accounting Hedges | Cleared OTC | ||
Derivatives, Notional Amount | ||
Derivative assets | 46 | 38 |
Derivative liabilities | 104 | 53 |
Designated as Accounting Hedges | Cleared OTC | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 46 | 38 |
Derivative liabilities | 102 | 52 |
Designated as Accounting Hedges | Cleared OTC | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 2 | 1 |
Designated as Accounting Hedges | Exchange Traded | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Designated as Accounting Hedges | Exchange Traded | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Designated as Accounting Hedges | Exchange Traded | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Not Designated as Accounting Hedges | ||
Derivatives, Notional Amount | ||
Derivative assets | 16,390 | 15,212 |
Derivative liabilities | 14,990 | 13,251 |
Not Designated as Accounting Hedges | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 13,171 | 12,396 |
Derivative liabilities | 11,613 | 10,446 |
Not Designated as Accounting Hedges | Credit Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 294 | 445 |
Derivative liabilities | 306 | 455 |
Not Designated as Accounting Hedges | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 2,036 | 1,645 |
Derivative liabilities | 2,143 | 1,619 |
Not Designated as Accounting Hedges | Equity Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 731 | 580 |
Derivative liabilities | 799 | 594 |
Not Designated as Accounting Hedges | Commodity and Other Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 158 | 146 |
Derivative liabilities | 129 | 137 |
Not Designated as Accounting Hedges | Bilateral OTC | ||
Derivatives, Notional Amount | ||
Derivative assets | 6,636 | 5,904 |
Derivative liabilities | 6,901 | 5,777 |
Not Designated as Accounting Hedges | Bilateral OTC | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 3,999 | 3,586 |
Derivative liabilities | 4,199 | 3,462 |
Not Designated as Accounting Hedges | Bilateral OTC | Credit Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 194 | 333 |
Derivative liabilities | 226 | 359 |
Not Designated as Accounting Hedges | Bilateral OTC | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 1,960 | 1,580 |
Derivative liabilities | 2,014 | 1,557 |
Not Designated as Accounting Hedges | Bilateral OTC | Equity Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 397 | 338 |
Derivative liabilities | 394 | 321 |
Not Designated as Accounting Hedges | Bilateral OTC | Commodity and Other Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 86 | 67 |
Derivative liabilities | 68 | 78 |
Not Designated as Accounting Hedges | Cleared OTC | ||
Derivatives, Notional Amount | ||
Derivative assets | 6,625 | 6,388 |
Derivative liabilities | 6,483 | 6,231 |
Not Designated as Accounting Hedges | Cleared OTC | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 6,458 | 6,224 |
Derivative liabilities | 6,325 | 6,087 |
Not Designated as Accounting Hedges | Cleared OTC | Credit Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 100 | 112 |
Derivative liabilities | 80 | 96 |
Not Designated as Accounting Hedges | Cleared OTC | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 67 | 52 |
Derivative liabilities | 78 | 48 |
Not Designated as Accounting Hedges | Cleared OTC | Equity Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Not Designated as Accounting Hedges | Cleared OTC | Commodity and Other Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Not Designated as Accounting Hedges | Exchange Traded | ||
Derivatives, Notional Amount | ||
Derivative assets | 3,129 | 2,920 |
Derivative liabilities | 1,606 | 1,243 |
Not Designated as Accounting Hedges | Exchange Traded | Interest Rate Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 2,714 | 2,586 |
Derivative liabilities | 1,089 | 897 |
Not Designated as Accounting Hedges | Exchange Traded | Credit Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Not Designated as Accounting Hedges | Exchange Traded | Foreign Exchange Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 9 | 13 |
Derivative liabilities | 51 | 14 |
Not Designated as Accounting Hedges | Exchange Traded | Equity Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 334 | 242 |
Derivative liabilities | 405 | 273 |
Not Designated as Accounting Hedges | Exchange Traded | Commodity and Other Contracts | ||
Derivatives, Notional Amount | ||
Derivative assets | 72 | 79 |
Derivative liabilities | $ 61 | $ 59 |
Derivative Instruments and He70
Derivative Instruments and Hedging Activities (Gains (Losses) on Accounting Hedges and Trading Revenues by Product Type) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Trading Revenues by Product Type | |||
Trading revenues | $ 11,116 | $ 10,209 | $ 9,496 |
DVA | 0 | 0 | 618 |
Trading revenues | 11,116 | 10,209 | 10,114 |
Interest Rate Contracts | |||
Trading Revenues by Product Type | |||
Trading revenues | 2,091 | 1,522 | 1,249 |
Foreign Exchange Contracts | |||
Trading Revenues by Product Type | |||
Trading revenues | 647 | 1,156 | 984 |
Equity Security and Index Contracts | |||
Trading Revenues by Product Type | |||
Trading revenues | 6,291 | 5,690 | 5,695 |
Commodity and Other Contracts | |||
Trading Revenues by Product Type | |||
Trading revenues | 740 | 56 | 793 |
Credit Contracts | |||
Trading Revenues by Product Type | |||
Trading revenues | 1,347 | 1,785 | 775 |
Fair Value Hedges | Interest Expense | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | |||
Gains (losses) recognized in earnings | (198) | (197) | (239) |
Fair Value Hedges | Interest Expense | Derivatives | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | |||
Gains (losses) recognized in earnings | (1,591) | (1,738) | (700) |
Fair Value Hedges | Interest Expense | Borrowings | |||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | |||
Gains (losses) recognized in earnings | 1,393 | 1,541 | 461 |
Net Investment Hedges | Foreign Exchange Contracts | |||
Gains (Losses) Recognized in OCI, Effective Portion | |||
Gains (losses) recognized in OCI | (365) | (1) | 434 |
Forward points excluded from hedge effectiveness testing - Interest income | $ (20) | $ (74) | $ (149) |
Derivative Instruments and He71
Derivative Instruments and Hedging Activities (Credit Risk-Related Contingencies) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives | ||
Net derivative liabilities with credit-risk-related contingent features | $ 20,675 | $ 22,939 |
Collateral posted | 16,642 | $ 17,040 |
Bilateral Downgrade Agreement | ||
Derivatives | ||
Incremental collateral or termination payments upon potential future ratings downgrade of either party | 823 | |
One-notch Downgrade | ||
Derivatives | ||
Incremental collateral or termination payments upon potential future ratings downgrade of either party | 635 | |
Two-notch Downgrade | ||
Derivatives | ||
Incremental collateral or termination payments upon potential future ratings downgrade of either party | $ 382 |
Derivative Instruments and He72
Derivative Instruments and Hedging Activities (Credit Derivatives and Other Credit Contracts) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Protection Sold | ||
Credit Derivatives | ||
Notional | $ 290,021 | $ 430,000 |
Fair value (asset)/liability | (1,944) | (1,049) |
Protection Sold | Less than 1 (Year) | ||
Credit Derivatives | ||
Notional | 88,228 | 166,734 |
Protection Sold | 1 - 3 (Years) | ||
Credit Derivatives | ||
Notional | 81,673 | 140,993 |
Protection Sold | 3 - 5 (Years) | ||
Credit Derivatives | ||
Notional | 94,110 | 91,784 |
Protection Sold | Over 5 (Years) | ||
Credit Derivatives | ||
Notional | 26,010 | 30,489 |
Protection Sold | CDSs | ||
Credit Derivatives | ||
Notional | 289,885 | 429,730 |
Fair value (asset)/liability | (1,960) | (1,049) |
Protection Sold | CDSs | Less than 1 (Year) | ||
Credit Derivatives | ||
Notional | 88,226 | 166,685 |
Protection Sold | CDSs | 1 - 3 (Years) | ||
Credit Derivatives | ||
Notional | 81,673 | 140,987 |
Protection Sold | CDSs | 3 - 5 (Years) | ||
Credit Derivatives | ||
Notional | 94,110 | 91,784 |
Protection Sold | CDSs | Over 5 (Years) | ||
Credit Derivatives | ||
Notional | 25,876 | 30,274 |
Protection Sold | Single Name CDSs | ||
Credit Derivatives | ||
Notional | 146,948 | 266,918 |
Fair value (asset)/liability | (1,277) | (753) |
Protection Sold | Single Name CDSs | Investment Grade | ||
Credit Derivatives | ||
Notional | 109,341 | 195,067 |
Fair value (asset)/liability | (1,167) | (1,060) |
Protection Sold | Single Name CDSs | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 37,607 | 71,851 |
Fair value (asset)/liability | (110) | 307 |
Protection Sold | Single Name CDSs | Less than 1 (Year) | ||
Credit Derivatives | ||
Notional | 53,934 | 114,020 |
Protection Sold | Single Name CDSs | Less than 1 (Year) | Investment Grade | ||
Credit Derivatives | ||
Notional | 39,721 | 79,449 |
Protection Sold | Single Name CDSs | Less than 1 (Year) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 14,213 | 34,571 |
Protection Sold | Single Name CDSs | 1 - 3 (Years) | ||
Credit Derivatives | ||
Notional | 58,884 | 96,616 |
Protection Sold | Single Name CDSs | 1 - 3 (Years) | Investment Grade | ||
Credit Derivatives | ||
Notional | 42,591 | 70,796 |
Protection Sold | Single Name CDSs | 1 - 3 (Years) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 16,293 | 25,820 |
Protection Sold | Single Name CDSs | 3 - 5 (Years) | ||
Credit Derivatives | ||
Notional | 24,350 | 44,965 |
Protection Sold | Single Name CDSs | 3 - 5 (Years) | Investment Grade | ||
Credit Derivatives | ||
Notional | 18,157 | 34,529 |
Protection Sold | Single Name CDSs | 3 - 5 (Years) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 6,193 | 10,436 |
Protection Sold | Single Name CDSs | Over 5 (Years) | ||
Credit Derivatives | ||
Notional | 9,780 | 11,317 |
Protection Sold | Single Name CDSs | Over 5 (Years) | Investment Grade | ||
Credit Derivatives | ||
Notional | 8,872 | 10,293 |
Protection Sold | Single Name CDSs | Over 5 (Years) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 908 | 1,024 |
Protection Sold | Total Index and Basket CDSs | ||
Credit Derivatives | ||
Notional | 142,937 | 162,812 |
Fair value (asset)/liability | (683) | (296) |
Protection Sold | Total Index and Basket CDSs | Investment Grade | ||
Credit Derivatives | ||
Notional | 88,614 | 92,074 |
Fair value (asset)/liability | (1,091) | (846) |
Protection Sold | Total Index and Basket CDSs | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 54,323 | 70,738 |
Fair value (asset)/liability | 408 | 550 |
Protection Sold | Total Index and Basket CDSs | Less than 1 (Year) | ||
Credit Derivatives | ||
Notional | 34,292 | 52,665 |
Protection Sold | Total Index and Basket CDSs | Less than 1 (Year) | Investment Grade | ||
Credit Derivatives | ||
Notional | 29,046 | 26,530 |
Protection Sold | Total Index and Basket CDSs | Less than 1 (Year) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 5,246 | 26,135 |
Protection Sold | Total Index and Basket CDSs | 1 - 3 (Years) | ||
Credit Derivatives | ||
Notional | 22,789 | 44,371 |
Protection Sold | Total Index and Basket CDSs | 1 - 3 (Years) | Investment Grade | ||
Credit Derivatives | ||
Notional | 15,418 | 21,388 |
Protection Sold | Total Index and Basket CDSs | 1 - 3 (Years) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 7,371 | 22,983 |
Protection Sold | Total Index and Basket CDSs | 3 - 5 (Years) | ||
Credit Derivatives | ||
Notional | 69,760 | 46,819 |
Protection Sold | Total Index and Basket CDSs | 3 - 5 (Years) | Investment Grade | ||
Credit Derivatives | ||
Notional | 37,343 | 35,060 |
Protection Sold | Total Index and Basket CDSs | 3 - 5 (Years) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 32,417 | 11,759 |
Protection Sold | Total Index and Basket CDSs | Over 5 (Years) | ||
Credit Derivatives | ||
Notional | 16,096 | 18,957 |
Protection Sold | Total Index and Basket CDSs | Over 5 (Years) | Investment Grade | ||
Credit Derivatives | ||
Notional | 6,807 | 9,096 |
Protection Sold | Total Index and Basket CDSs | Over 5 (Years) | Non-investment Grade | ||
Credit Derivatives | ||
Notional | 9,289 | 9,861 |
Protection Sold | Index and Basket CDSs | ||
Credit Derivatives | ||
Notional | 131,073 | 130,383 |
Fair value (asset)/liability | (341) | 374 |
Protection Sold | Tranched Index and Basket | ||
Credit Derivatives | ||
Notional | 11,864 | 32,429 |
Fair value (asset)/liability | (342) | (670) |
Protection Sold | Single Name, and Non-tranched Index and Basket With Identical Underlying Reference Obligations | ||
Credit Derivatives | ||
Notional | 274,473 | 395,536 |
Protection Sold | Other Credit Contracts | ||
Credit Derivatives | ||
Notional | 136 | 270 |
Fair value (asset)/liability | 16 | 0 |
Protection Sold | Other Credit Contracts | Less than 1 (Year) | ||
Credit Derivatives | ||
Notional | 2 | 49 |
Protection Sold | Other Credit Contracts | 1 - 3 (Years) | ||
Credit Derivatives | ||
Notional | 0 | 6 |
Protection Sold | Other Credit Contracts | 3 - 5 (Years) | ||
Credit Derivatives | ||
Notional | 0 | 0 |
Protection Sold | Other Credit Contracts | Over 5 (Years) | ||
Credit Derivatives | ||
Notional | 134 | 215 |
Protection Purchased | CDSs | ||
Credit Derivatives | ||
Notional | 309,619 | 470,189 |
Fair value (asset)/liability | 2,483 | 2,245 |
Protection Purchased | Single Name CDSs | ||
Credit Derivatives | ||
Notional | 164,773 | 269,623 |
Fair value (asset)/liability | 1,658 | 826 |
Protection Purchased | Index and Basket CDSs | ||
Credit Derivatives | ||
Notional | 120,348 | 122,061 |
Fair value (asset)/liability | 209 | (481) |
Protection Purchased | Tranched Index and Basket | ||
Credit Derivatives | ||
Notional | 24,498 | 78,505 |
Fair value (asset)/liability | 616 | 1,900 |
Protection Purchased | Single Name, and Non-tranched Index and Basket With Identical Underlying Reference Obligations | ||
Credit Derivatives | ||
Notional | $ 281,162 | $ 389,221 |
Investment Securities (AFS and
Investment Securities (AFS and HTM Securities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investment securities | ||
Total Investment securities: Amortized cost | $ 79,673 | $ 81,028 |
Total Investment securities: Gross unrealized gains | 59 | 43 |
Total Investment securities: Gross unrealized losses | 1,448 | 1,448 |
Total Investment securities: Fair value | 78,284 | 79,623 |
AFS securities | ||
AFS debt securities: Amortized cost | 56,059 | 64,091 |
AFS debt securities: Gross unrealized gains | 51 | 41 |
AFS debt securities: Gross unrealized losses | 912 | 968 |
AFS debt securities: Fair value | 55,198 | 63,164 |
AFS equity securities: Amortized cost | 15 | 15 |
AFS equity securities: Gross unrealized gains | 0 | 0 |
AFS equity securities: Gross unrealized losses | 10 | 9 |
AFS equity securities: Fair value | 5 | 6 |
Total AFS securities: Amortized cost | 56,074 | 64,106 |
Total AFS securities: Gross unrealized gains | 51 | 41 |
Total AFS securities: Gross unrealized losses | 922 | 977 |
Total AFS securities: Fair value | 55,203 | 63,170 |
HTM securities | ||
HTM: Amortized Cost | 23,599 | 16,922 |
HTM: Gross unrealized gains | 8 | 2 |
HTM: Gross unrealized losses | 526 | 471 |
HTM securities: Fair value | 23,081 | 16,453 |
U.S. Government and Agency Securities | ||
AFS securities | ||
AFS debt securities: Amortized cost | 49,645 | 50,719 |
AFS debt securities: Gross unrealized gains | 28 | 15 |
AFS debt securities: Gross unrealized losses | 836 | 823 |
AFS debt securities: Fair value | 48,837 | 49,911 |
HTM securities | ||
HTM: Amortized Cost | 23,310 | |
HTM: Gross unrealized gains | 7 | |
HTM: Gross unrealized losses | 525 | |
HTM securities: Fair value | 22,792 | |
U.S. Treasury Securities | ||
AFS securities | ||
AFS debt securities: Amortized cost | 26,842 | 28,371 |
AFS debt securities: Gross unrealized gains | 0 | 1 |
AFS debt securities: Gross unrealized losses | 589 | 545 |
AFS debt securities: Fair value | 26,253 | 27,827 |
HTM securities | ||
HTM: Amortized Cost | 11,424 | 5,839 |
HTM: Gross unrealized gains | 0 | 1 |
HTM: Gross unrealized losses | 305 | 283 |
HTM securities: Fair value | 11,119 | 5,557 |
U.S. Agency Securities | ||
AFS securities | ||
AFS debt securities: Amortized cost | 22,803 | 22,348 |
AFS debt securities: Gross unrealized gains | 28 | 14 |
AFS debt securities: Gross unrealized losses | 247 | 278 |
AFS debt securities: Fair value | 22,584 | 22,084 |
HTM securities | ||
HTM: Amortized Cost | 11,886 | 11,083 |
HTM: Gross unrealized gains | 7 | 1 |
HTM: Gross unrealized losses | 220 | 188 |
HTM securities: Fair value | 11,673 | 10,896 |
Corporate and Other Debt | ||
AFS securities | ||
AFS debt securities: Amortized cost | 6,414 | 13,372 |
AFS debt securities: Gross unrealized gains | 23 | 26 |
AFS debt securities: Gross unrealized losses | 76 | 145 |
AFS debt securities: Fair value | 6,361 | 13,253 |
HTM securities | ||
HTM: Amortized Cost | 289 | |
HTM: Gross unrealized gains | 1 | |
HTM: Gross unrealized losses | 1 | |
HTM securities: Fair value | 289 | |
CMBS: Agency | ||
AFS securities | ||
AFS debt securities: Amortized cost | 1,370 | 1,850 |
AFS debt securities: Gross unrealized gains | 2 | 2 |
AFS debt securities: Gross unrealized losses | 49 | 44 |
AFS debt securities: Fair value | 1,323 | 1,808 |
CMBS: Non-Agency | ||
AFS securities | ||
AFS debt securities: Amortized cost | 1,102 | 2,250 |
AFS debt securities: Gross unrealized gains | 0 | 11 |
AFS debt securities: Gross unrealized losses | 8 | 16 |
AFS debt securities: Fair value | 1,094 | 2,245 |
HTM securities | ||
HTM: Amortized Cost | 289 | |
HTM: Gross unrealized gains | 1 | |
HTM: Gross unrealized losses | 1 | |
HTM securities: Fair value | 289 | |
Auto Loan ABS | ||
AFS securities | ||
AFS debt securities: Amortized cost | 1,509 | |
AFS debt securities: Gross unrealized gains | 1 | |
AFS debt securities: Gross unrealized losses | 1 | |
AFS debt securities: Fair value | 1,509 | |
Corporate Bonds | ||
AFS securities | ||
AFS debt securities: Amortized cost | 1,379 | 3,836 |
AFS debt securities: Gross unrealized gains | 5 | 7 |
AFS debt securities: Gross unrealized losses | 12 | 22 |
AFS debt securities: Fair value | 1,372 | 3,821 |
CLO | ||
AFS securities | ||
AFS debt securities: Amortized cost | 398 | 540 |
AFS debt securities: Gross unrealized gains | 1 | 0 |
AFS debt securities: Gross unrealized losses | 0 | 1 |
AFS debt securities: Fair value | $ 399 | $ 539 |
FFELP Student Loan ABS | ||
Investment securities | ||
Percent of principal balance and interest guaranteed by the U.S. Department of Education | 95.00% | 95.00% |
AFS securities | ||
AFS debt securities: Amortized cost | $ 2,165 | $ 3,387 |
AFS debt securities: Gross unrealized gains | 15 | 5 |
AFS debt securities: Gross unrealized losses | 7 | 61 |
AFS debt securities: Fair value | $ 2,173 | $ 3,331 |
Investment Securities (Investme
Investment Securities (Investment Securities in an Unrealized Loss Position) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Investment securities | ||
Investment securities: Fair Value, Less than 12 Months | $ 46,712 | $ 65,265 |
Investment securities: Fair Value, 12 Months or Longer | 19,563 | 1,223 |
Investment securities: Fair Value | 66,275 | 66,488 |
Investment securities: Gross Unrealized Loss, Less than 12 Months | 858 | 1,441 |
Investment securities: Gross Unrealized Loss, 12 Months or Longer | 590 | 7 |
Investment securities: Gross Unrealized Loss | 1,448 | 1,448 |
U.S. Government and Agency Securities | ||
HTM securities | ||
HTM: Fair Value, Less than 12 Months | 9,487 | 15,669 |
HTM: Fair Value, 12 Months or Longer | 11,810 | 0 |
HTM: Fair Value, Total | 21,297 | 15,669 |
HTM: Gross Unrealized Losses, Less than 12 Months | 110 | 471 |
HTM: Gross Unrealized Losses, 12 Months or Longer | 415 | 0 |
HTM: Gross Unrealized Losses, Total | 525 | 471 |
Corporate and Other Debt | ||
HTM securities | ||
HTM: Fair Value, Less than 12 Months | 124 | |
HTM: Fair Value, 12 Months or Longer | 0 | |
HTM: Fair Value, Total | 124 | |
HTM: Gross Unrealized Losses, Less than 12 Months | 1 | |
HTM: Gross Unrealized Losses, 12 Months or Longer | 0 | |
HTM: Gross Unrealized Losses, Total | 1 | |
CMBS: Non-Agency | ||
HTM securities | ||
HTM: Fair Value, Less than 12 Months | 124 | |
HTM: Fair Value, 12 Months or Longer | 0 | |
HTM: Fair Value, Total | 124 | |
HTM: Gross Unrealized Losses, Less than 12 Months | 1 | |
HTM: Gross Unrealized Losses, 12 Months or Longer | 0 | |
HTM: Gross Unrealized Losses, Total | 1 | |
AFS Securities | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 37,101 | 49,596 |
AFS: Fair Value, 12 Months or Longer | 7,753 | 1,223 |
AFS: Fair Value, Total | 44,854 | 50,819 |
AFS: Gross Unrealized Losses, Less than 12 Months | 747 | 970 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 175 | 7 |
AFS: Gross Unrealized Losses, Total | 922 | 977 |
AFS Debt Securities | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 37,101 | 49,590 |
AFS: Fair Value, 12 Months or Longer | 7,748 | 1,223 |
AFS: Fair Value, Total | 44,849 | 50,813 |
AFS: Gross Unrealized Losses, Less than 12 Months | 747 | 961 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 165 | 7 |
AFS: Gross Unrealized Losses, Total | 912 | 968 |
AFS Debt Securities | U.S. Government and Agency Securities | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 34,614 | 42,083 |
AFS: Fair Value, 12 Months or Longer | 6,800 | 125 |
AFS: Fair Value, Total | 41,414 | 42,208 |
AFS: Gross Unrealized Losses, Less than 12 Months | 687 | 823 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 149 | 0 |
AFS: Gross Unrealized Losses, Total | 836 | 823 |
AFS Debt Securities | U.S. Treasury Securities | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 21,941 | 25,323 |
AFS: Fair Value, 12 Months or Longer | 4,287 | 0 |
AFS: Fair Value, Total | 26,228 | 25,323 |
AFS: Gross Unrealized Losses, Less than 12 Months | 495 | 545 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 94 | 0 |
AFS: Gross Unrealized Losses, Total | 589 | 545 |
AFS Debt Securities | U.S. Agency Securities | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 12,673 | 16,760 |
AFS: Fair Value, 12 Months or Longer | 2,513 | 125 |
AFS: Fair Value, Total | 15,186 | 16,885 |
AFS: Gross Unrealized Losses, Less than 12 Months | 192 | 278 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 55 | 0 |
AFS: Gross Unrealized Losses, Total | 247 | 278 |
AFS Debt Securities | Corporate and Other Debt | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 2,487 | 7,507 |
AFS: Fair Value, 12 Months or Longer | 948 | 1,098 |
AFS: Fair Value, Total | 3,435 | 8,605 |
AFS: Gross Unrealized Losses, Less than 12 Months | 60 | 138 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 16 | 7 |
AFS: Gross Unrealized Losses, Total | 76 | 145 |
AFS Debt Securities | CMBS: Agency | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 930 | 1,245 |
AFS: Fair Value, 12 Months or Longer | 0 | 0 |
AFS: Fair Value, Total | 930 | 1,245 |
AFS: Gross Unrealized Losses, Less than 12 Months | 49 | 44 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 0 | 0 |
AFS: Gross Unrealized Losses, Total | 49 | 44 |
AFS Debt Securities | CMBS: Non-Agency | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 257 | 763 |
AFS: Fair Value, 12 Months or Longer | 559 | 594 |
AFS: Fair Value, Total | 816 | 1,357 |
AFS: Gross Unrealized Losses, Less than 12 Months | 1 | 11 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 7 | 5 |
AFS: Gross Unrealized Losses, Total | 8 | 16 |
AFS Debt Securities | Auto Loan ABS | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 659 | |
AFS: Fair Value, 12 Months or Longer | 123 | |
AFS: Fair Value, Total | 782 | |
AFS: Gross Unrealized Losses, Less than 12 Months | 1 | |
AFS: Gross Unrealized Losses, 12 Months or Longer | 0 | |
AFS: Gross Unrealized Losses, Total | 1 | |
AFS Debt Securities | Corporate Bonds | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 316 | 2,050 |
AFS: Fair Value, 12 Months or Longer | 389 | 142 |
AFS: Fair Value, Total | 705 | 2,192 |
AFS: Gross Unrealized Losses, Less than 12 Months | 3 | 21 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 9 | 1 |
AFS: Gross Unrealized Losses, Total | 12 | 22 |
AFS Debt Securities | Collateralized Loan Obligations | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 178 | |
AFS: Fair Value, 12 Months or Longer | 239 | |
AFS: Fair Value, Total | 417 | |
AFS: Gross Unrealized Losses, Less than 12 Months | 0 | |
AFS: Gross Unrealized Losses, 12 Months or Longer | 1 | |
AFS: Gross Unrealized Losses, Total | 1 | |
AFS Debt Securities | FFELP Student Loan ABS | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 984 | 2,612 |
AFS: Fair Value, 12 Months or Longer | 0 | 0 |
AFS: Fair Value, Total | 984 | 2,612 |
AFS: Gross Unrealized Losses, Less than 12 Months | 7 | 61 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 0 | 0 |
AFS: Gross Unrealized Losses, Total | 7 | 61 |
AFS Equity Securities | ||
AFS securities | ||
AFS: Fair Value, Less than 12 Months | 0 | 6 |
AFS: Fair Value, 12 Months or Longer | 5 | 0 |
AFS: Fair Value, Total | 5 | 6 |
AFS: Gross Unrealized Losses, Less than 12 Months | 0 | 9 |
AFS: Gross Unrealized Losses, 12 Months or Longer | 10 | 0 |
AFS: Gross Unrealized Losses, Total | 10 | 9 |
HTM securities | ||
HTM securities | ||
HTM: Fair Value, Less than 12 Months | 9,611 | 15,669 |
HTM: Fair Value, 12 Months or Longer | 11,810 | 0 |
HTM: Fair Value, Total | 21,421 | 15,669 |
HTM: Gross Unrealized Losses, Less than 12 Months | 111 | 471 |
HTM: Gross Unrealized Losses, 12 Months or Longer | 415 | 0 |
HTM: Gross Unrealized Losses, Total | 526 | 471 |
HTM securities | U.S. Treasury Securities | ||
HTM securities | ||
HTM: Fair Value, Less than 12 Months | 6,608 | 5,057 |
HTM: Fair Value, 12 Months or Longer | 4,512 | 0 |
HTM: Fair Value, Total | 11,120 | 5,057 |
HTM: Gross Unrealized Losses, Less than 12 Months | 86 | 283 |
HTM: Gross Unrealized Losses, 12 Months or Longer | 219 | 0 |
HTM: Gross Unrealized Losses, Total | 305 | 283 |
HTM securities | U.S. Agency Securities | ||
HTM securities | ||
HTM: Fair Value, Less than 12 Months | 2,879 | 10,612 |
HTM: Fair Value, 12 Months or Longer | 7,298 | 0 |
HTM: Fair Value, Total | 10,177 | 10,612 |
HTM: Gross Unrealized Losses, Less than 12 Months | 24 | 188 |
HTM: Gross Unrealized Losses, 12 Months or Longer | 196 | 0 |
HTM: Gross Unrealized Losses, Total | $ 220 | $ 188 |
Investment Securities (Invest75
Investment Securities (Investment Securities by Contractual Maturity) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Amortized Cost | ||
AFS debt securities: Amortized cost, total | $ 56,059 | $ 64,091 |
AFS equity securities: Amortized cost | 15 | 15 |
AFS Securities: Amortized cost, total | 56,074 | 64,106 |
HTM securities: Amortized cost, total | 23,599 | 16,922 |
Investment securities: Amortized cost, total | 79,673 | 81,028 |
Fair Value | ||
AFS debt securities: Fair value, total | 55,198 | 63,164 |
AFS equity securities: Fair value | 5 | 6 |
AFS securities: Fair value, total | 55,203 | 63,170 |
HTM securities: Fair value, total | 23,081 | 16,453 |
Investment securities: Fair value, total | $ 78,284 | 79,623 |
Average Yield | ||
AFS debt securities: Annualized average yield, total | 1.50% | |
AFS equity securities: Annualized average yield | 0.00% | |
AFS securities: Annualized average yield, total | 1.50% | |
HTM securities: Annualized average yield, total | 2.10% | |
Investment securities: Annualized average yield, total | 1.70% | |
U.S. Government and Agency Securities | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, total | $ 49,645 | 50,719 |
HTM securities: Amortized cost, total | 23,310 | |
Fair Value | ||
AFS debt securities: Fair value, total | 48,837 | 49,911 |
HTM securities: Fair value, total | $ 22,792 | |
Average Yield | ||
AFS debt securities: Annualized average yield, total | 1.50% | |
HTM securities: Annualized average yield, total | 2.30% | |
U.S. Treasury Securities | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, due within 1 year | $ 6,501 | |
AFS debt securities: Amortized cost, after 1 year through 5 years | 15,195 | |
AFS debt securities: Amortized cost, after 5 years through 10 years | 5,146 | |
AFS debt securities: Amortized cost, total | 26,842 | 28,371 |
HTM securities: Amortized cost, due within 1 year | 499 | |
HTM securities: Amortized cost, after 1 year through 5 years | 5,085 | |
HTM securities: Amortized cost, after 5 year through 10 years | 5,113 | |
HTM securities: Amortized cost, after 10 years | 727 | |
HTM securities: Amortized cost, total | 11,424 | 5,839 |
Fair Value | ||
AFS debt securities: Fair value, due within 1 year | 6,478 | |
AFS debt securities: Fair value, after 1 year through 5 years | 14,901 | |
AFS debt securities: Fair value, after 5 years through 10 years | 4,874 | |
AFS debt securities: Fair value, total | 26,253 | 27,827 |
HTM securities: Fair value, due within 1 year | 496 | |
HTM securities: Fair value, after 1 year through 5 years | 5,034 | |
HTM securities: Fair value, after 5 years through 10 years | 4,923 | |
HTM securities: Fair value, after 10 years | 666 | |
HTM securities: Fair value, total | $ 11,119 | 5,557 |
Average Yield | ||
AFS debt securities: Annualized average yield, due within 1 year | 0.90% | |
AFS debt securities: Annualized average yield, after 1 year through 5 years | 1.50% | |
AFS debt securities: Annualized average yield, after 5 years through 10 years | 1.50% | |
HTM securities: Annualized average yield, due within 1 year | 1.20% | |
HTM securities: Annualized average yield, after 1 years through 5 years | 1.60% | |
HTM securities: Annualized average yield, after 5 years through 10 years | 1.90% | |
HTM securities: Annualized average yield, after 10 year | 2.30% | |
U.S. Agency Securities | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, due within 1 year | $ 46 | |
AFS debt securities: Amortized cost, after 1 year through 5 years | 2,485 | |
AFS debt securities: Amortized cost, after 5 years through 10 years | 1,280 | |
AFS debt securities: Amortized cost, after 10 years | 18,992 | |
AFS debt securities: Amortized cost, total | 22,803 | 22,348 |
HTM securities: Amortized cost, after 10 years | 11,886 | |
HTM securities: Amortized cost, total | 11,886 | 11,083 |
Fair Value | ||
AFS debt securities: Fair value, due within 1 year | 45 | |
AFS debt securities: Fair value, after 1 year through 5 years | 2,475 | |
AFS debt securities: Fair value, after 5 years through 10 years | 1,263 | |
AFS debt securities: Fair value, after 10 years | 18,801 | |
AFS debt securities: Fair value, total | 22,584 | 22,084 |
HTM securities: Fair value, after 10 years | 11,673 | |
HTM securities: Fair value, total | $ 11,673 | 10,896 |
Average Yield | ||
AFS debt securities: Annualized average yield, due within 1 year | 1.10% | |
AFS debt securities: Annualized average yield, after 1 year through 5 years | 0.90% | |
AFS debt securities: Annualized average yield, after 5 years through 10 years | 1.90% | |
AFS debt securities: Annualized average yield, after 10 years | 1.90% | |
HTM securities: Annualized average yield, after 10 year | 2.50% | |
Corporate and Other Debt | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, total | $ 6,414 | 13,372 |
HTM securities: Amortized cost, total | 289 | |
Fair Value | ||
AFS debt securities: Fair value, total | 6,361 | 13,253 |
HTM securities: Fair value, total | $ 289 | |
Average Yield | ||
AFS debt securities: Annualized average yield, total | 1.60% | |
HTM securities: Annualized average yield, total | 0.10% | |
CMBS: Agency | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, due within 1 year | $ 3 | |
AFS debt securities: Amortized cost, after 1 year through 5 years | 380 | |
AFS debt securities: Amortized cost, after 5 years through 10 years | 153 | |
AFS debt securities: Amortized cost, after 10 years | 834 | |
AFS debt securities: Amortized cost, total | 1,370 | 1,850 |
Fair Value | ||
AFS debt securities: Fair value, due within 1 year | 3 | |
AFS debt securities: Fair value, after 1 year through 5 years | 379 | |
AFS debt securities: Fair value, after 5 years through 10 years | 154 | |
AFS debt securities: Fair value, after 10 years | 787 | |
AFS debt securities: Fair value, total | $ 1,323 | 1,808 |
Average Yield | ||
AFS debt securities: Annualized average yield, due within 1 year | 0.90% | |
AFS debt securities: Annualized average yield, after 1 year through 5 years | 1.40% | |
AFS debt securities: Annualized average yield, after 5 years through 10 years | 1.10% | |
AFS debt securities: Annualized average yield, after 10 years | 1.60% | |
CMBS: Non-Agency | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, after 5 years through 10 years | $ 35 | |
AFS debt securities: Amortized cost, after 10 years | 1,067 | |
AFS debt securities: Amortized cost, total | 1,102 | 2,250 |
HTM securities: Amortized cost, after 1 year through 5 years | 95 | |
HTM securities: Amortized cost, after 5 year through 10 years | 175 | |
HTM securities: Amortized cost, after 10 years | 19 | |
HTM securities: Amortized cost, total | 289 | |
Fair Value | ||
AFS debt securities: Fair value, after 5 years through 10 years | 36 | |
AFS debt securities: Fair value, after 10 years | 1,058 | |
AFS debt securities: Fair value, total | 1,094 | 2,245 |
HTM securities: Fair value, after 1 year through 5 years | 95 | |
HTM securities: Fair value, after 5 years through 10 years | 175 | |
HTM securities: Fair value, after 10 years | 19 | |
HTM securities: Fair value, total | $ 289 | |
Average Yield | ||
AFS debt securities: Annualized average yield, after 5 years through 10 years | 2.50% | |
AFS debt securities: Annualized average yield, after 10 years | 1.70% | |
HTM securities: Annualized average yield, after 1 years through 5 years | 3.60% | |
HTM securities: Annualized average yield, after 5 years through 10 years | 3.80% | |
HTM securities: Annualized average yield, after 10 year | 4.10% | |
Auto Loan ABS | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, total | 1,509 | |
Fair Value | ||
AFS debt securities: Fair value, total | 1,509 | |
Corporate Bonds | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, due within 1 year | $ 46 | |
AFS debt securities: Amortized cost, after 1 year through 5 years | 1,248 | |
AFS debt securities: Amortized cost, after 5 years through 10 years | 85 | |
AFS debt securities: Amortized cost, total | 1,379 | 3,836 |
Fair Value | ||
AFS debt securities: Fair value, due within 1 year | 46 | |
AFS debt securities: Fair value, after 1 year through 5 years | 1,243 | |
AFS debt securities: Fair value, after 5 years through 10 years | 83 | |
AFS debt securities: Fair value, total | $ 1,372 | 3,821 |
Average Yield | ||
AFS debt securities: Annualized average yield, due within 1 year | 1.20% | |
AFS debt securities: Annualized average yield, after 1 year through 5 years | 2.30% | |
AFS debt securities: Annualized average yield, after 5 years through 10 years | 2.40% | |
CLO | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, after 5 years through 10 years | $ 200 | |
AFS debt securities: Amortized cost, after 10 years | 198 | |
AFS debt securities: Amortized cost, total | 398 | 540 |
Fair Value | ||
AFS debt securities: Fair value, after 5 years through 10 years | 200 | |
AFS debt securities: Fair value, after 10 years | 199 | |
AFS debt securities: Fair value, total | $ 399 | 539 |
Average Yield | ||
AFS debt securities: Annualized average yield, after 5 years through 10 years | 1.50% | |
AFS debt securities: Annualized average yield, after 10 years | 2.40% | |
FFELP Student Loan ABS | ||
Amortized Cost | ||
AFS debt securities: Amortized cost, after 1 year through 5 years | $ 50 | |
AFS debt securities: Amortized cost, after 5 years through 10 years | 404 | |
AFS debt securities: Amortized cost, after 10 years | 1,711 | |
AFS debt securities: Amortized cost, total | 2,165 | 3,387 |
Fair Value | ||
AFS debt securities: Fair value, after 1 year through 5 years | 49 | |
AFS debt securities: Fair value, after 5 years through 10 years | 401 | |
AFS debt securities: Fair value, after 10 years | 1,723 | |
AFS debt securities: Fair value, total | $ 2,173 | $ 3,331 |
Average Yield | ||
AFS debt securities: Annualized average yield, after 1 year through 5 years | 0.80% | |
AFS debt securities: Annualized average yield, after 5 years through 10 years | 0.80% | |
AFS debt securities: Annualized average yield, after 10 years | 1.10% |
Investment Securities (Gross Re
Investment Securities (Gross Realized Gains and Losses on Sales of AFS Securities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities [Abstract] | |||
Gross realized gains | $ 46 | $ 133 | $ 116 |
Gross realized (losses) | (11) | (21) | (32) |
Total | $ 35 | $ 112 | $ 84 |
Collateralized Transactions (Of
Collateralized Transactions (Offsetting of Certain Collateralized Transactions) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Securities Purchased under Agreements to Resell | ||
Gross amount | $ 199,044 | $ 182,888 |
Amounts offset | (114,786) | (80,933) |
Net amount presented | 84,258 | 101,955 |
Amounts not offset | (78,009) | (93,365) |
Net amounts | 6,249 | 8,590 |
Securities Borrowed | ||
Gross amount | 133,431 | 129,934 |
Amounts offset | (9,421) | (4,698) |
Net amount presented | 124,010 | 125,236 |
Amounts not offset | (119,358) | (118,974) |
Net amounts | 4,652 | 6,262 |
Securities Sold under Agreements to Repurchase | ||
Gross amount | 171,210 | 135,561 |
Amounts offset | (114,786) | (80,933) |
Net amount presented | 56,424 | 54,628 |
Amounts not offset | (48,067) | (47,933) |
Net amounts | 8,357 | 6,695 |
Securities Loaned | ||
Gross amount | 23,014 | 20,542 |
Amounts offset | (9,422) | (4,698) |
Net amount presented | 13,592 | 15,844 |
Amounts not offset | (13,271) | (15,670) |
Net amounts | 321 | 174 |
Not Subject to Legally Enforceable Master Netting Agreements | ||
Securities purchased under agreements to resell | 5,687 | 7,765 |
Securities borrowed | 572 | 2,591 |
Securities sold under agreements to repurchase | 6,945 | 6,500 |
Securities loaned | $ 307 | $ 154 |
Collateralized Transactions (Gr
Collateralized Transactions (Gross Secured Financing Balances) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | $ 171,210 | $ 135,561 |
Securities loaned | 23,014 | 20,542 |
Total included in the offsetting disclosure | 194,224 | 156,103 |
Trading liabilities - Obligation to return securities received as collateral | 22,555 | 20,262 |
Total | 216,779 | 176,365 |
U.S. Government and Agency Securities | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 43,346 | 56,372 |
Securities loaned | 81 | 0 |
State and Municipal Securities | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 2,451 | 1,363 |
Other Sovereign Government Obligations | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 87,141 | 42,790 |
Securities loaned | 9,489 | 4,762 |
ABS | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 1,130 | 1,918 |
Corporate and Other Debt | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 7,737 | 9,086 |
Securities loaned | 14 | 73 |
Corporate Equities | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 28,497 | 23,152 |
Securities loaned | 13,174 | 15,693 |
Other | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 908 | 880 |
Securities loaned | 256 | 14 |
Overnight and Open | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 41,332 | 41,549 |
Securities loaned | 12,130 | 9,487 |
Total included in the offsetting disclosure | 53,462 | 51,036 |
Trading liabilities - Obligation to return securities received as collateral | 22,555 | 20,262 |
Total | 76,017 | 71,298 |
Less than 30 days | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 66,593 | 36,703 |
Securities loaned | 873 | 851 |
Total included in the offsetting disclosure | 67,466 | 37,554 |
Trading liabilities - Obligation to return securities received as collateral | 0 | 0 |
Total | 67,466 | 37,554 |
30-90 days | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 28,682 | 24,648 |
Securities loaned | 1,577 | 2,863 |
Total included in the offsetting disclosure | 30,259 | 27,511 |
Trading liabilities - Obligation to return securities received as collateral | 0 | 0 |
Total | 30,259 | 27,511 |
Over 90 days | ||
Gross Secured Financing Balances | ||
Securities sold under agreements to repurchase | 34,603 | 32,661 |
Securities loaned | 8,434 | 7,341 |
Total included in the offsetting disclosure | 43,037 | 40,002 |
Trading liabilities - Obligation to return securities received as collateral | 0 | 0 |
Total | $ 43,037 | $ 40,002 |
Collateralized Transactions (As
Collateralized Transactions (Assets Pledged) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Collateralized Transactions | ||
Trading assets | $ 31,324 | $ 41,358 |
Loans (gross of allowance for loan losses) | 228 | 0 |
Total | $ 31,552 | $ 41,358 |
Collateralized Transactions (Co
Collateralized Transactions (Collateral Received) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Collateralized Transactions | ||
Collateral with rights to sell or repledge | $ 599,244 | $ 561,239 |
Collateral that was sold or repledged | $ 475,113 | $ 430,911 |
Collateralized Transactions (81
Collateralized Transactions (Concentration Risk) (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Trading Assets to Total Assets Ratio | U.S. Government and Agency Securities, and Other Sovereign Government Obligations | ||
Concentration Risk | ||
Concentration Risk, Percentage | 9.00% | 8.00% |
Collateral Held to Total Assets Ratio | Resale Agreements and Bonds Borrowed | ||
Concentration Risk | ||
Concentration Risk, Percentage | 14.00% | 18.00% |
Collateralized Transactions (Cu
Collateralized Transactions (Customer Margin Lending and Other) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Collateralized Transactions | ||
Net customer receivables representing margin loans | $ 32,112 | $ 24,359 |
Collateralized Transactions (Re
Collateralized Transactions (Restricted Cash and Segregated Securities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Collateralized Transactions | |||
Restricted cash | $ 34,231 | $ 33,979 | $ 31,469 |
Segregated securities | 20,549 | 23,756 | |
Total | $ 54,780 | $ 57,735 |
Loans and Allowance for Credi84
Loans and Allowance for Credit Losses (Loans Held for Investment and Held for Sale) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Loans Held for Investment | ||||
Loans held for investment, gross | $ 93,177 | $ 81,978 | ||
Allowance for loan losses | (224) | (274) | $ (225) | $ (149) |
Loans held for investment, net | 92,953 | 81,704 | ||
Loans Held for Sale | ||||
Loans held for sale, gross | 11,173 | 12,544 | ||
Allowance for loan losses | 0 | 0 | ||
Loans held for sale, net | 11,173 | 12,544 | ||
Total Loans | ||||
Total loans, gross | 104,350 | 94,522 | ||
Allowance for loan losses | (224) | (274) | ||
Total loans, net | 104,126 | 94,248 | ||
Loans at fixed interest rates | 13,339 | 11,895 | ||
Loans at floating or adjustable interest rates | 90,787 | 82,353 | ||
Non-U.S. | ||||
Total Loans | ||||
Total loans, net | 9,977 | 9,388 | ||
Pass | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 92,010 | 79,901 | ||
Special Mention | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 394 | 519 | ||
Substandard | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 766 | 1,489 | ||
Doubtful | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 7 | 69 | ||
Loss | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Corporate | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 29,754 | 25,025 | ||
Allowance for loan losses | (126) | (195) | (166) | (118) |
Loans Held for Sale | ||||
Loans held for sale, gross | 9,456 | 10,710 | ||
Total Loans | ||||
Total loans, gross | 39,210 | 35,735 | ||
Corporate | Pass | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 29,166 | 23,409 | ||
Corporate | Special Mention | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 188 | 288 | ||
Corporate | Substandard | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 393 | 1,259 | ||
Corporate | Doubtful | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 7 | 69 | ||
Corporate | Loss | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Consumer | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 26,808 | 24,866 | ||
Allowance for loan losses | (4) | (4) | (5) | (2) |
Loans Held for Sale | ||||
Loans held for sale, gross | 0 | 0 | ||
Total Loans | ||||
Total loans, gross | 26,808 | 24,866 | ||
Consumer | Pass | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 26,802 | 24,853 | ||
Consumer | Special Mention | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 6 | 13 | ||
Consumer | Substandard | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Consumer | Doubtful | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Consumer | Loss | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Residential Real Estate | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 26,635 | 24,385 | ||
Allowance for loan losses | (24) | (20) | (17) | (8) |
Loans Held for Sale | ||||
Loans held for sale, gross | 35 | 61 | ||
Total Loans | ||||
Total loans, gross | 26,670 | 24,446 | ||
Residential Real Estate | Pass | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 26,562 | 24,345 | ||
Residential Real Estate | Special Mention | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Residential Real Estate | Substandard | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 73 | 40 | ||
Residential Real Estate | Doubtful | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Residential Real Estate | Loss | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Wholesale Real Estate | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 9,980 | 7,702 | ||
Allowance for loan losses | (70) | (55) | $ (37) | $ (21) |
Loans Held for Sale | ||||
Loans held for sale, gross | 1,682 | 1,773 | ||
Total Loans | ||||
Total loans, gross | 11,662 | 9,475 | ||
Wholesale Real Estate | Pass | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 9,480 | 7,294 | ||
Wholesale Real Estate | Special Mention | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 200 | 218 | ||
Wholesale Real Estate | Substandard | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 300 | 190 | ||
Wholesale Real Estate | Doubtful | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | 0 | 0 | ||
Wholesale Real Estate | Loss | ||||
Loans Held for Investment | ||||
Loans held for investment, gross | $ 0 | $ 0 |
Loans and Allowance for Credi85
Loans and Allowance for Credit Losses (Impaired Loans) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Impaired Loans | ||
Loans: With allowance | $ 16 | $ 104 |
Loans: Without allowance | 163 | 241 |
Loans: UPB | 192 | 354 |
Lending Commitments: With allowance | 0 | 0 |
Lending Commitments: Without allowance | 199 | 89 |
Impaired loans | 179 | 345 |
Allowance for loan losses | 224 | 274 |
Americas | ||
Impaired Loans | ||
Impaired loans | 160 | 320 |
Allowance for loan losses | 194 | 245 |
EMEA | ||
Impaired Loans | ||
Impaired loans | 9 | 9 |
Allowance for loan losses | 27 | 28 |
Asia | ||
Impaired Loans | ||
Impaired loans | 10 | 16 |
Allowance for loan losses | 3 | 1 |
Corporate | ||
Impaired Loans | ||
Loans: With allowance | 16 | 104 |
Loans: Without allowance | 118 | 206 |
Loans: UPB | 146 | 316 |
Lending Commitments: With allowance | 0 | 0 |
Lending Commitments: Without allowance | 199 | 89 |
Residential Real Estate | ||
Impaired Loans | ||
Loans: With allowance | 0 | 0 |
Loans: Without allowance | 45 | 35 |
Loans: UPB | 46 | 38 |
Lending Commitments: With allowance | 0 | 0 |
Lending Commitments: Without allowance | $ 0 | $ 0 |
Loans and Allowance for Credi86
Loans and Allowance for Credit Losses (TDR) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Troubled Debt Restructurings | ||
Loans | $ 51 | $ 67 |
Lending commitments | 28 | 14 |
Allowance for loan losses and lending commitments | $ 10 | $ 0 |
Loans and Allowance for Credi87
Loans and Allowance for Credit Losses (Allowance for Loan Losses and Lending Commitments Rollforward) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for loan losses rollforward | ||||
Beginning balance | $ 225 | $ 274 | $ 225 | $ 149 |
Gross charge-offs | (75) | (17) | (1) | |
Recoveries | 1 | 3 | 1 | |
Net recoveries (charge-offs) | (74) | (14) | 0 | |
Provision (release) | 22 | 131 | 87 | |
Other | 2 | (68) | (11) | |
Ending balance | 224 | 274 | 225 | |
Inherent | 217 | 212 | 215 | |
Specific | 7 | 62 | 10 | |
Allowance for lending commitments rollforward | ||||
Beginning balance | 185 | 190 | 185 | 149 |
Provision for (release of) lending commitments | 7 | 13 | 36 | |
Other | 0 | 1 | (8) | |
Ending balance | 198 | 190 | 185 | |
Inherent | 196 | 190 | 178 | |
Specific | 2 | 0 | 7 | |
Transfer to loans held for sale | 492 | |||
Corporate | ||||
Allowance for loan losses rollforward | ||||
Beginning balance | 166 | 195 | 166 | 118 |
Gross charge-offs | (75) | (16) | 0 | |
Recoveries | 1 | 3 | 1 | |
Net recoveries (charge-offs) | (74) | (13) | 1 | |
Provision (release) | 5 | 110 | 58 | |
Other | 0 | (68) | (11) | |
Ending balance | 126 | 195 | 166 | |
Inherent | 119 | 133 | 156 | |
Specific | 7 | 62 | 10 | |
Allowance for lending commitments rollforward | ||||
Beginning balance | 180 | 185 | 180 | 147 |
Provision for (release of) lending commitments | 8 | 13 | 33 | |
Other | 0 | 1 | (8) | |
Ending balance | 194 | 185 | 180 | |
Inherent | 192 | 185 | 173 | |
Specific | 2 | 0 | 7 | |
Consumer | ||||
Allowance for loan losses rollforward | ||||
Beginning balance | 5 | 4 | 5 | 2 |
Gross charge-offs | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | |
Net recoveries (charge-offs) | 0 | 0 | 0 | |
Provision (release) | 0 | (1) | 3 | |
Other | 0 | 0 | 0 | |
Ending balance | 4 | 4 | 5 | |
Inherent | 4 | 4 | 5 | |
Specific | 0 | 0 | 0 | |
Allowance for lending commitments rollforward | ||||
Beginning balance | 1 | 1 | 1 | 0 |
Provision for (release of) lending commitments | 0 | 0 | 1 | |
Other | 0 | 0 | 0 | |
Ending balance | 1 | 1 | 1 | |
Inherent | 1 | 1 | 1 | |
Specific | 0 | 0 | 0 | |
Residential Real Estate | ||||
Allowance for loan losses rollforward | ||||
Beginning balance | 17 | 20 | 17 | 8 |
Gross charge-offs | 0 | (1) | (1) | |
Recoveries | 0 | 0 | 0 | |
Net recoveries (charge-offs) | 0 | (1) | (1) | |
Provision (release) | 4 | 4 | 10 | |
Other | 0 | 0 | 0 | |
Ending balance | 24 | 20 | 17 | |
Inherent | 24 | 20 | 17 | |
Specific | 0 | 0 | 0 | |
Allowance for lending commitments rollforward | ||||
Beginning balance | 0 | 0 | 0 | 0 |
Provision for (release of) lending commitments | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | |
Ending balance | 0 | 0 | 0 | |
Inherent | 0 | 0 | 0 | |
Specific | 0 | 0 | 0 | |
Wholesale Real Estate | ||||
Allowance for loan losses rollforward | ||||
Beginning balance | 37 | 55 | 37 | 21 |
Gross charge-offs | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | |
Net recoveries (charge-offs) | 0 | 0 | 0 | |
Provision (release) | 13 | 18 | 16 | |
Other | 2 | 0 | 0 | |
Ending balance | 70 | 55 | 37 | |
Inherent | 70 | 55 | 37 | |
Specific | 0 | 0 | 0 | |
Allowance for lending commitments rollforward | ||||
Beginning balance | 4 | 4 | 4 | 2 |
Provision for (release of) lending commitments | (1) | 0 | 2 | |
Other | $ 0 | 0 | 0 | |
Ending balance | 3 | 4 | 4 | |
Inherent | 3 | 4 | 4 | |
Specific | $ 0 | $ 0 | $ 0 |
Loans and Allowance for Credi88
Loans and Allowance for Credit Losses (Employee Loans) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Loans | ||
Balance | $ 4,185 | $ 4,804 |
Allowance for loan losses | (77) | (89) |
Balance, net | $ 4,108 | $ 4,715 |
Minimum | ||
Employee Loans | ||
Employee loan repayment terms | 1 year | 1 year |
Maximum | ||
Employee Loans | ||
Employee loan repayment terms | 20 years | 12 years |
Equity Method Investments (Equi
Equity Method Investments (Equity Method Investment Balances) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures | |||
Equity method investments | $ 2,623 | $ 2,837 | |
Income (loss) from equity method investments | (34) | $ (79) | $ 114 |
Impairment | $ 53 |
Equity Method Investments (Inve
Equity Method Investments (Investees) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investments | ||||
Income from equity method investments | $ (34) | $ (79) | $ 114 | |
MUMSS | ||||
Equity Method Investments | ||||
Voting interest | 40.00% | 40.00% | ||
Income from equity method investments | $ 123 | $ 93 | $ 220 | |
Decrease in equity method investment | $ 71 | |||
Decrease in additional paid-in capital | $ 71 | |||
MUFG | MUMSS | ||||
Equity Method Investments | ||||
Voting interest | 60.00% | 60.00% |
Goodwill and Intangible Asset91
Goodwill and Intangible Assets (Goodwill Rollforward) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill Roll Forward | ||
Beginning Balance | $ 6,577 | $ 6,584 |
Foreign currency and other | 20 | (7) |
Ending Balance | 6,597 | 6,577 |
Goodwill, Impaired, Accumulated Impairment Loss | ||
Goodwill, accumulated impairments | 700 | |
IS | ||
Goodwill Roll Forward | ||
Beginning Balance | 275 | 282 |
Foreign currency and other | 20 | (7) |
Ending Balance | 295 | 275 |
Goodwill, Impaired, Accumulated Impairment Loss | ||
Goodwill, accumulated impairments | 673 | |
WM | ||
Goodwill Roll Forward | ||
Beginning Balance | 5,533 | 5,533 |
Foreign currency and other | 0 | 0 |
Ending Balance | 5,533 | 5,533 |
Goodwill, Impaired, Accumulated Impairment Loss | ||
Goodwill, accumulated impairments | 0 | |
IM | ||
Goodwill Roll Forward | ||
Beginning Balance | 769 | 769 |
Foreign currency and other | 0 | 0 |
Ending Balance | 769 | $ 769 |
Goodwill, Impaired, Accumulated Impairment Loss | ||
Goodwill, accumulated impairments | $ 27 |
Goodwill and Intangible Asset92
Goodwill and Intangible Assets (Intangible Assets by Business Segment) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible Assets | |||
Amortizable intangibles | $ 2,445 | $ 2,718 | $ 2,979 |
Mortgage servicing rights | 3 | 3 | |
Intangible assets | 2,448 | 2,721 | |
IS | |||
Intangible Assets | |||
Amortizable intangibles | 349 | 346 | 327 |
Mortgage servicing rights | 0 | 0 | |
Intangible assets | 349 | 346 | |
WM | |||
Intangible Assets | |||
Amortizable intangibles | 2,092 | 2,361 | 2,632 |
Mortgage servicing rights | 3 | 3 | |
Intangible assets | 2,095 | 2,364 | |
IM | |||
Intangible Assets | |||
Amortizable intangibles | 4 | 11 | $ 20 |
Mortgage servicing rights | 0 | 0 | |
Intangible assets | $ 4 | $ 11 |
Goodwill and Intangible Asset93
Goodwill and Intangible Assets (Gross Amortizable Intangible Assets by Type) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Amortizable Intangible Assets | ||
Gross carrying amount | $ 5,175 | $ 5,139 |
Accumulated amortization | 2,730 | 2,421 |
Estimated Amortization Expense | ||
2,018 | 301 | |
2,019 | 301 | |
2,020 | 301 | |
2,021 | 301 | |
2,022 | 301 | |
Trademarks | ||
Amortizable Intangible Assets | ||
Gross carrying amount | 1 | 1 |
Accumulated amortization | 0 | 0 |
Tradename | ||
Amortizable Intangible Assets | ||
Gross carrying amount | 283 | 283 |
Accumulated amortization | 50 | 40 |
Customer Relationships | ||
Amortizable Intangible Assets | ||
Gross carrying amount | 4,059 | 4,059 |
Accumulated amortization | 2,193 | 1,939 |
Management Contracts | ||
Amortizable Intangible Assets | ||
Gross carrying amount | 503 | 467 |
Accumulated amortization | 299 | 275 |
Other | ||
Amortizable Intangible Assets | ||
Gross carrying amount | 329 | 329 |
Accumulated amortization | $ 188 | $ 167 |
Goodwill and Intangible Asset94
Goodwill and Intangible Assets (Net Amortizable Intangible Assets Rollforward) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Amortizable Intangible Assets | ||
Beginning balance | $ 2,718 | $ 2,979 |
Acquired | 51 | 43 |
Disposals | (15) | (11) |
Amortization expense | (309) | (291) |
Impairment losses | (2) | |
Ending balance | 2,445 | 2,718 |
IS | ||
Amortizable Intangible Assets | ||
Beginning balance | 346 | 327 |
Acquired | 51 | 43 |
Disposals | (15) | (11) |
Amortization expense | (33) | (11) |
Impairment losses | (2) | |
Ending balance | 349 | 346 |
WM | ||
Amortizable Intangible Assets | ||
Beginning balance | 2,361 | 2,632 |
Acquired | 0 | 0 |
Disposals | 0 | 0 |
Amortization expense | (269) | (271) |
Impairment losses | 0 | |
Ending balance | 2,092 | 2,361 |
IM | ||
Amortizable Intangible Assets | ||
Beginning balance | 11 | 20 |
Acquired | 0 | 0 |
Disposals | 0 | 0 |
Amortization expense | (7) | (9) |
Impairment losses | 0 | |
Ending balance | $ 4 | $ 11 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits [Abstract] | ||
Savings and demand deposits | $ 144,487 | $ 154,559 |
Time deposits | 14,949 | 1,304 |
Total | 159,436 | 155,863 |
Deposits subject to FDIC insurance | 127,017 | 127,992 |
Time deposits that equal or exceed the FDIC insurance limit | 38 | $ 46 |
Time Deposit Maturities | ||
2,018 | 12,232 | |
2,019 | 2,481 | |
2,020 | 32 | |
2,021 | 6 | |
2,022 | 69 | |
Thereafter | $ 129 |
Borrowings and Other Secured 96
Borrowings and Other Secured Financings (Maturities and Terms of Borrowings) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Original maturities of one year or less: | |||
Next 12 months | $ 1,519 | $ 941 | |
Original maturities greater than one year: | |||
2,017 | 0 | 26,127 | |
2,018 | 23,870 | 19,292 | |
2,019 | 24,549 | 22,397 | |
2,020 | 21,414 | 16,736 | |
2,021 | 19,063 | 17,179 | |
2,022 | 17,586 | 5,338 | |
Thereafter | 84,581 | 57,706 | |
Total | 191,063 | 164,775 | |
Total borrowings | $ 192,582 | $ 165,716 | |
Weighted average coupon | 3.30% | 3.70% | 4.00% |
Parent Company | |||
Original maturities greater than one year: | |||
Total | $ 167,483 | $ 150,725 | |
Total borrowings | 167,483 | $ 150,726 | |
Parent Company | Fixed Rate | |||
Original maturities of one year or less: | |||
Next 12 months | 0 | ||
Original maturities greater than one year: | |||
2,017 | 0 | ||
2,018 | 13,154 | ||
2,019 | 12,947 | ||
2,020 | 11,175 | ||
2,021 | 13,733 | ||
2,022 | 6,536 | ||
Thereafter | 56,866 | ||
Total | 114,411 | ||
Total borrowings | $ 114,411 | ||
Weighted average coupon | 3.80% | ||
Parent Company | Variable Rate | |||
Original maturities of one year or less: | |||
Next 12 months | $ 0 | ||
Original maturities greater than one year: | |||
2,017 | 0 | ||
2,018 | 5,625 | ||
2,019 | 8,902 | ||
2,020 | 7,668 | ||
2,021 | 4,146 | ||
2,022 | 8,717 | ||
Thereafter | 17,765 | ||
Total | 52,823 | ||
Total borrowings | $ 52,823 | ||
Weighted average coupon | 1.80% | ||
Subsidiaries | Fixed Rate | |||
Original maturities of one year or less: | |||
Next 12 months | $ 0 | ||
Original maturities greater than one year: | |||
2,017 | 0 | ||
2,018 | 14 | ||
2,019 | 55 | ||
2,020 | 14 | ||
2,021 | 18 | ||
2,022 | 17 | ||
Thereafter | 201 | ||
Total | 319 | ||
Total borrowings | $ 319 | ||
Weighted average coupon | 6.30% | ||
Subsidiaries | Variable Rate | |||
Original maturities of one year or less: | |||
Next 12 months | $ 1,519 | ||
Original maturities greater than one year: | |||
2,017 | 0 | ||
2,018 | 5,077 | ||
2,019 | 2,645 | ||
2,020 | 2,557 | ||
2,021 | 1,166 | ||
2,022 | 2,316 | ||
Thereafter | 9,749 | ||
Total | 23,510 | ||
Total borrowings | $ 25,029 |
Borrowings and Other Secured 97
Borrowings and Other Secured Financings (Borrowings Associated with Fair Value Hedges) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Increases (Decreases) in Carrying Amount of Borrowings Associated with Fair Value Hedges | |
2,018 | $ 73 |
2,019 | 150 |
2,020 | 154 |
2,021 | 9 |
2,022 | (96) |
Thereafter | (595) |
Total | $ (305) |
Borrowings and Other Secured 98
Borrowings and Other Secured Financings (Long-Term Borrowings) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Long-term Borrowings by Type | ||
Senior | $ 180,835 | $ 154,472 |
Subordinated | 10,228 | 10,303 |
Total | $ 191,063 | $ 164,775 |
Weighted average stated maturity, in years | 6 years 7 months | 5 years 11 months |
Debt containing provisions that effectively allow the holders to put the notes back to the Firm | $ 3,023 | $ 3,156 |
Notes subject to the arrangements, which entitle certain purchasers to cause the repurchase of the notes through liquidity arrangements with the Firm | $ 1,414 | $ 1,117 |
Subordinated Debt | ||
Long-term Borrowings | ||
Contractual weighted average coupon | 4.50% | 4.50% |
Description of maturities | Maturities of subordinated notes range from 2022 to 2027. |
Borrowings and Other Secured 99
Borrowings and Other Secured Financings (Rates for Long-Term Borrowings) (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Borrowings and Other Secured Financings | |||
Contractual weighted average coupon | 3.30% | 3.70% | 4.00% |
Effective average after swaps | 2.50% | 2.50% | 2.10% |
Borrowings and Other Secured100
Borrowings and Other Secured Financings (Other Secured Financings) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Borrowings and Other Secured Financings | ||
Secured financings with original maturities greater than one year | $ 8,685 | $ 9,404 |
Secured financings with original maturities one year or less | 2,034 | 1,429 |
Failed sales | 552 | 285 |
Total other secured financings | $ 11,271 | $ 11,118 |
Borrowings and Other Secured101
Borrowings and Other Secured Financings (Maturities and Terms of Secured Financings) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Original maturities of one year or less: | ||
Next 12 months | $ 1,519 | $ 941 |
Original maturities greater than one year: | ||
2,017 | 0 | 26,127 |
2,018 | 23,870 | 19,292 |
2,019 | 24,549 | 22,397 |
2,020 | 21,414 | 16,736 |
2,021 | 19,063 | 17,179 |
2,022 | 17,586 | 5,338 |
Thereafter | 84,581 | 57,706 |
Total | 191,063 | 164,775 |
Secured Financings | ||
Original maturities of one year or less: | ||
Next 12 months | 2,034 | 1,429 |
Original maturities greater than one year: | ||
2,017 | 0 | 3,377 |
2,018 | 4,992 | 2,738 |
2,019 | 2,637 | 2,813 |
2,020 | 505 | 270 |
2,021 | 2 | 0 |
2,022 | 151 | 0 |
Thereafter | 398 | 206 |
Total | $ 8,685 | $ 9,404 |
Contractual weighted average coupon | 1.70% | 1.00% |
Secured Financings | Fixed Rate | ||
Original maturities of one year or less: | ||
Next 12 months | $ 590 | |
Original maturities greater than one year: | ||
2,017 | 0 | |
2,018 | 165 | |
2,019 | 36 | |
2,020 | 354 | |
2,021 | 2 | |
2,022 | 2 | |
Thereafter | 227 | |
Total | $ 786 | |
Contractual weighted average coupon | 3.10% | |
Secured Financings | Variable Rate | ||
Original maturities of one year or less: | ||
Next 12 months | $ 1,444 | |
Original maturities greater than one year: | ||
2,017 | 0 | |
2,018 | 4,827 | |
2,019 | 2,601 | |
2,020 | 151 | |
2,021 | 0 | |
2,022 | 149 | |
Thereafter | 171 | |
Total | $ 7,899 | |
Contractual weighted average coupon | 1.50% |
Borrowings and Other Secured102
Borrowings and Other Secured Financings (Failed Sales by Maturity) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Borrowings and Other Secured Financings | ||
2,017 | $ 0 | $ 112 |
2,018 | 22 | 17 |
2,019 | 4 | 53 |
2,020 | 109 | 55 |
2,021 | 69 | 28 |
2,022 | 59 | 4 |
Thereafter | 289 | 16 |
Total | $ 552 | $ 285 |
Commitments, Guarantees and 103
Commitments, Guarantees and Contingencies (Commitments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | $ 91,711 |
1-3 (years) | 31,051 |
3-5 (years) | 44,080 |
Over 5 (years) | 5,211 |
Total | 172,053 |
Corporate Lending | |
Commitment, Fiscal Year Maturity | |
Commitments participated to third parties | 6,414 |
Forward-starting Secured Financing Receivables | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 67,883 |
1-3 (years) | 0 |
3-5 (years) | 0 |
Over 5 (years) | 579 |
Total | 68,462 |
Commitments settled within three business days | 54,236 |
Underwriting | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 336 |
1-3 (years) | 0 |
3-5 (years) | 0 |
Over 5 (years) | 0 |
Total | 336 |
Investment Activities | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 506 |
1-3 (years) | 126 |
3-5 (years) | 44 |
Over 5 (years) | 245 |
Total | 921 |
Letters of Credit and Other Financial Guarantees | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 63 |
1-3 (years) | 131 |
3-5 (years) | 1 |
Over 5 (years) | 70 |
Total | 265 |
Lending Commitments | Corporate Lending | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 16,495 |
1-3 (years) | 30,234 |
3-5 (years) | 43,975 |
Over 5 (years) | 4,061 |
Total | 94,765 |
Lending Commitments | Consumer Lending | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 6,319 |
1-3 (years) | 0 |
3-5 (years) | 8 |
Over 5 (years) | 3 |
Total | 6,330 |
Lending Commitments | Residential Real Estate Lending | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 1 |
1-3 (years) | 52 |
3-5 (years) | 52 |
Over 5 (years) | 253 |
Total | 358 |
Lending Commitments | Wholesale Real Estate Lending | |
Commitment, Fiscal Year Maturity | |
Less than 1 (year) | 108 |
1-3 (years) | 508 |
3-5 (years) | 0 |
Over 5 (years) | 0 |
Total | $ 616 |
Commitments, Guarantees and 104
Commitments, Guarantees and Contingencies (Future Minimum Rental Commitments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Premises Leases: Future Minimum Rental Commitments | |||
Total minimum rental income to be received in the future under non-cancelable operating subleases | $ 12 | ||
Rent expense | 704 | $ 689 | $ 705 |
Premises and Equipment | |||
Operating Premises Leases: Future Minimum Rental Commitments | |||
2,018 | 664 | ||
2,019 | 624 | ||
2,020 | 559 | ||
2,021 | 494 | ||
2,022 | 444 | ||
Thereafter | 2,639 | ||
Total | $ 5,424 |
Commitments, Guarantees and 105
Commitments, Guarantees and Contingencies (Obligations under Guarantee Arrangements) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Credit Derivatives | |
Guarantees | |
Maximum potential payout/notional | $ 289,885 |
Carrying amount: (asset) | (1,960) |
Collateral/recourse | 0 |
Credit Derivatives | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 88,226 |
Credit Derivatives | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 81,673 |
Credit Derivatives | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 94,110 |
Credit Derivatives | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 25,876 |
Other Credit Contracts | |
Guarantees | |
Maximum potential payout/notional | 136 |
Carrying amount: liability | 16 |
Collateral/recourse | 0 |
Other Credit Contracts | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 2 |
Other Credit Contracts | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Other Credit Contracts | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Other Credit Contracts | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 134 |
Non-credit Derivatives | |
Guarantees | |
Maximum potential payout/notional | 3,483,308 |
Carrying amount: liability | 37,123 |
Collateral/recourse | 0 |
Non-credit Derivatives | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 1,505,001 |
Non-credit Derivatives | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 1,085,197 |
Non-credit Derivatives | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 343,121 |
Non-credit Derivatives | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 549,989 |
Standby Letters of Credit and Other Financial Guarantees Issued | |
Guarantees | |
Maximum potential payout/notional | 8,233 |
Carrying amount: (asset) | (199) |
Collateral/recourse | 6,743 |
Standby letters of credit | 700 |
Standby Letters of Credit and Other Financial Guarantees Issued | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 830 |
Standby Letters of Credit and Other Financial Guarantees Issued | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 1,152 |
Standby Letters of Credit and Other Financial Guarantees Issued | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 1,215 |
Standby Letters of Credit and Other Financial Guarantees Issued | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 5,036 |
Market Value Guarantees | |
Guarantees | |
Maximum potential payout/notional | 164 |
Carrying amount: liability | 0 |
Collateral/recourse | 0 |
Market Value Guarantees | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 38 |
Market Value Guarantees | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 58 |
Market Value Guarantees | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 68 |
Market Value Guarantees | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Liquidity Facilities | |
Guarantees | |
Maximum potential payout/notional | 3,333 |
Carrying amount: (asset) | (5) |
Collateral/recourse | 5,547 |
Liquidity Facilities | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 3,333 |
Liquidity Facilities | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Liquidity Facilities | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Liquidity Facilities | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Whole Loan Sales Guarantees | |
Guarantees | |
Maximum potential payout/notional | 23,246 |
Carrying amount: liability | 8 |
Collateral/recourse | 0 |
Whole Loan Sales Guarantees | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Whole Loan Sales Guarantees | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 1 |
Whole Loan Sales Guarantees | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 1 |
Whole Loan Sales Guarantees | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 23,244 |
Securitizations Representations and Warranties | |
Guarantees | |
Maximum potential payout/notional | 60,157 |
Carrying amount: liability | 91 |
Collateral/recourse | 0 |
Securitizations Representations and Warranties | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Securitizations Representations and Warranties | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Securitizations Representations and Warranties | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 0 |
Securitizations Representations and Warranties | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 60,157 |
General Partner Guarantees | |
Guarantees | |
Maximum potential payout/notional | 433 |
Carrying amount: liability | 60 |
Collateral/recourse | 0 |
General Partner Guarantees | Less than 1 (Year) | |
Guarantees | |
Maximum potential payout/notional | 32 |
General Partner Guarantees | 1 - 3 (Years) | |
Guarantees | |
Maximum potential payout/notional | 52 |
General Partner Guarantees | 3 - 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | 324 |
General Partner Guarantees | Over 5 (Years) | |
Guarantees | |
Maximum potential payout/notional | $ 25 |
Commitments, Guarantees and 106
Commitments, Guarantees and Contingencies (Securitization Representations and Warranties) (Details) $ in Millions | Dec. 31, 2017USD ($) |
RMBS | |
Guarantees | |
Maximum potential payout/notional | $ 25,508 |
Reserve for payments owed | 91 |
CMBS | |
Guarantees | |
Maximum potential payout/notional | 34,649 |
Reserve for payments owed | $ 0 |
Commitments, Guarantees and 107
Commitments, Guarantees and Contingencies (Contingencies) (Details) € in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | |
Loss Contingencies | |||||
Legal expenses | $ 342 | $ 263 | $ 563 | ||
China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al. | Pending Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Jul. 15, 2010 | ||||
Name of plaintiff | China Development Industrial Bank (“CDIB”) | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of the State of New York, New York County (“Supreme Court of NY”) | ||||
Allegations | The complaint relates to a $275 million CDS 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 CDS with CDIB. | ||||
Damages sought | The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the CDS, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. | ||||
China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al. | Pending Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | $ 240 | ||||
Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. | Pending Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | May 3, 2013 | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of NY | ||||
Allegations | 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 was approximately $634 million. The complaint alleges causes of action against the Firm for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission | ||||
Damages sought | seeks, among other things, compensatory and punitive damages | ||||
Request for information | At December 25, 2017, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $215 million, and the certificates had incurred actual losses of approximately $88 million. | ||||
US 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 Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Jul. 8, 2013 | ||||
Name of plaintiff | U.S. Bank National Association | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of NY | ||||
Allegations | 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. | ||||
Damages sought | The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, unspecified damages and interest. | ||||
US 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 Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | 240 | ||||
Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al. | Pending Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Dec. 30, 2013 | ||||
Name of plaintiff | Wilmington Trust Company | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of NY | ||||
Allegations | 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. | ||||
Damages sought | The complaint seeks, among other relief, unspecified damages, attorneys’ fees, interest and costs. | ||||
Wilmington Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC et al. | Pending Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | 152 | ||||
Deutsche Bank National Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC | Pending Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Apr. 28, 2014 | ||||
Name of plaintiff | Deutsche Bank National Trust Company | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the United States District Court for the Southern District of New York (“SDNY”) | ||||
Allegations | 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. | ||||
Damages sought | 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. | ||||
Deutsche Bank National Trust Company v. Morgan Stanley Mortgage Capital Holdings LLC | Pending Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | 292 | ||||
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (NIMS 2007-1) | Pending Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Sep. 19, 2014 | ||||
Name of plaintiff | Financial Guaranty Insurance Company (“FGIC”) | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of NY | ||||
Allegations | The complaint asserts claims for breach of contract and alleges, among other things, that the net interest margin securities (“NIMS”) in the trust breached various representations and warranties. FGIC issued a financial guaranty policy with respect to certain notes that had an original balance of approximately $475 million. | ||||
Damages sought | The complaint seeks, among other relief, specific performance of the NIMS breach remedy procedures in the transaction documents, unspecified damages, reimbursement of certain payments made pursuant to the transaction documents, attorneys’ fees and interest. | ||||
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (NIMS 2007-1) | Pending Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | 126 | ||||
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (Trust 2007-NC4) | Pending Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Sep. 23, 2014 | ||||
Name of plaintiff | FGIC | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of NY | ||||
Allegations | The complaint asserts claims for breach of contract and fraudulent inducement and alleges, among other things, that the loans in the trust breached various representations and warranties and defendants made untrue statements and material omissions to induce FGIC to issue a financial guaranty policy on certain classes of certificates that had an original balance of approximately $876 million. | ||||
Damages sought | The complaint seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction documents, compensatory, consequential and punitive damages, attorneys’ fees and interest. | ||||
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. (Trust 2007-NC4) | Pending Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | 277 | ||||
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 Litigation | |||||
Loss Contingencies | |||||
Lawsuit filing date | Jan. 23, 2015 | ||||
Name of plaintiff | Deutsche Bank National Trust Company | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the Supreme Court of NY | ||||
Allegations | 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. | ||||
Damages sought | 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. | ||||
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 Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | 277 | ||||
Case Number 15/3637 and Case Number 15/4353 | Pending Litigation | |||||
Loss Contingencies | |||||
Name of plaintiff | the Dutch Tax Authority (“Dutch Authority”) | ||||
Name of defendant | the Firm | ||||
Domicile of litigation | the District Court in Amsterdam | ||||
Allegations | the prior set-off by the Firm of approximately €124 million (approximately $149 million) plus accrued interest of withholding tax credits against the Firm’s corporation tax liabilities for the tax years 2007 to 2013. The Dutch Authority alleges that the Firm was not entitled to receive the withholding tax credits on the basis, inter alia, that a Firm subsidiary did not hold legal title to certain securities subject to withholding tax on the relevant dates. The Dutch Authority has also alleged that the Firm failed to provide certain information to the Dutch Authority and keep adequate books and records. | ||||
Case Number 15/3637 and Case Number 15/4353 | Pending Litigation | Maximum | |||||
Loss Contingencies | |||||
Estimate of possible loss | € 124 | $ 149 |
Variable Interest Entities a108
Variable Interest Entities and Securitization Activities (Consolidated VIEs) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity | ||
VIE assets | $ 1,801 | $ 2,410 |
VIE liabilities | 463 | 318 |
CLN | ||
Variable Interest Entity | ||
VIE assets | 0 | 501 |
VIE liabilities | 0 | 0 |
OSF | ||
Variable Interest Entity | ||
VIE assets | 378 | 602 |
VIE liabilities | 3 | 10 |
MABS | ||
Variable Interest Entity | ||
VIE assets | 249 | 397 |
VIE liabilities | 210 | 283 |
Other | ||
Variable Interest Entity | ||
VIE assets | 1,174 | 910 |
VIE liabilities | $ 250 | $ 25 |
Variable Interest Entities a109
Variable Interest Entities and Securitization Activities (Assets and Liabilities by Balance Sheet Caption) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents: | |||
Cash and due from banks | $ 24,816 | $ 22,017 | $ 19,827 |
Restricted cash | 34,231 | 33,979 | 31,469 |
Trading assets at fair value | 298,282 | 262,154 | |
Customer and other receivables | 56,187 | 46,460 | |
Goodwill | 6,597 | 6,577 | $ 6,584 |
Intangible assets | 2,448 | 2,721 | |
Other assets | 16,628 | 18,146 | |
Total assets | 851,733 | 814,949 | |
Liabilities | |||
Other secured financings at fair value | 3,863 | 5,041 | |
Other liabilities and accrued expenses | 17,157 | 15,896 | |
Total liabilities | 773,267 | 737,772 | |
Noncontrolling interests | 1,075 | 1,127 | |
Consolidated VIEs | |||
Cash and cash equivalents: | |||
Cash and due from banks | 69 | 74 | |
Restricted cash | 222 | 255 | |
Trading assets at fair value | 833 | 1,295 | |
Customer and other receivables | 19 | 13 | |
Goodwill | 18 | 18 | |
Intangible assets | 155 | 177 | |
Other assets | 485 | 578 | |
Total assets | 1,801 | 2,410 | |
Liabilities | |||
Other secured financings at fair value | 438 | 289 | |
Other liabilities and accrued expenses | 25 | 29 | |
Total liabilities | 463 | 318 | |
Noncontrolling interests | 189 | 228 | |
Maximum exposure to losses | $ 0 | $ 78 |
Variable Interest Entities a110
Variable Interest Entities and Securitization Activities (Non-Consolidated VIEs) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity | ||
Additional VIE assets issued by securitization SPEs | $ 11,318 | $ 11,685 |
MABS | ||
Variable Interest Entity | ||
VIE assets (UPB) | 89,288 | 101,916 |
Maximum exposure to loss | 11,871 | 11,927 |
Residential Mortgage | ||
Variable Interest Entity | ||
VIE assets (UPB) | 15,636 | 4,775 |
Commercial Mortgage | ||
Variable Interest Entity | ||
VIE assets (UPB) | 46,464 | 54,021 |
U.S. Agency CMO | ||
Variable Interest Entity | ||
VIE assets (UPB) | 16,223 | 14,796 |
Other Consumer or Commercial Loans | ||
Variable Interest Entity | ||
VIE assets (UPB) | 10,965 | 28,324 |
CDO | ||
Variable Interest Entity | ||
VIE assets (UPB) | 9,807 | 11,341 |
Maximum exposure to loss | 2,052 | 1,344 |
MTOB | ||
Variable Interest Entity | ||
VIE assets (UPB) | 5,306 | 4,857 |
Maximum exposure to loss | 3,413 | 2,862 |
OSF | ||
Variable Interest Entity | ||
VIE assets (UPB) | 3,322 | 4,293 |
Maximum exposure to loss | 1,792 | 1,757 |
Other | ||
Variable Interest Entity | ||
VIE assets (UPB) | 31,934 | 39,077 |
Maximum exposure to loss | 6,849 | 5,150 |
Assets | MABS | ||
Variable Interest Entity | ||
Carrying value of exposure to loss | 10,657 | 11,243 |
Assets | CDO | ||
Variable Interest Entity | ||
Carrying value of exposure to loss | 1,384 | 1,245 |
Assets | MTOB | ||
Variable Interest Entity | ||
Carrying value of exposure to loss | 48 | 54 |
Assets | OSF | ||
Variable Interest Entity | ||
Carrying value of exposure to loss | 1,202 | 1,183 |
Assets | Other | ||
Variable Interest Entity | ||
Carrying value of exposure to loss | 4,914 | 4,895 |
Debt and Equity Interests | MABS | ||
Variable Interest Entity | ||
Maximum exposure to loss | 10,657 | 11,243 |
Carrying value of exposure to loss | 10,657 | 11,243 |
Debt and Equity Interests | Residential Mortgage | ||
Variable Interest Entity | ||
Maximum exposure to loss | 1,272 | 458 |
Debt and Equity Interests | Commercial Mortgage | ||
Variable Interest Entity | ||
Maximum exposure to loss | 2,331 | 2,656 |
Debt and Equity Interests | U.S. Agency CMO | ||
Variable Interest Entity | ||
Maximum exposure to loss | 3,439 | 2,758 |
Debt and Equity Interests | Other Consumer or Commercial Loans | ||
Variable Interest Entity | ||
Maximum exposure to loss | 3,615 | 5,371 |
Debt and Equity Interests | CDO | ||
Variable Interest Entity | ||
Maximum exposure to loss | 1,384 | 1,245 |
Carrying value of exposure to loss | 1,384 | 1,245 |
Debt and Equity Interests | MTOB | ||
Variable Interest Entity | ||
Maximum exposure to loss | 80 | 50 |
Carrying value of exposure to loss | 43 | 49 |
Debt and Equity Interests | OSF | ||
Variable Interest Entity | ||
Maximum exposure to loss | 1,628 | 1,570 |
Carrying value of exposure to loss | 1,202 | 1,183 |
Debt and Equity Interests | Other | ||
Variable Interest Entity | ||
Maximum exposure to loss | 4,730 | 4,877 |
Carrying value of exposure to loss | 4,730 | 4,877 |
Net Derivative and Other Contracts | MABS | ||
Variable Interest Entity | ||
Maximum exposure to loss | 0 | 0 |
Carrying value of exposure to loss | 0 | 0 |
Net Derivative and Other Contracts | CDO | ||
Variable Interest Entity | ||
Maximum exposure to loss | 0 | 0 |
Carrying value of exposure to loss | 0 | 0 |
Net Derivative and Other Contracts | MTOB | ||
Variable Interest Entity | ||
Maximum exposure to loss | 3,333 | 2,812 |
Carrying value of exposure to loss | 5 | 5 |
Net Derivative and Other Contracts | OSF | ||
Variable Interest Entity | ||
Maximum exposure to loss | 0 | 0 |
Carrying value of exposure to loss | 0 | 0 |
Net Derivative and Other Contracts | Other | ||
Variable Interest Entity | ||
Maximum exposure to loss | 1,686 | 45 |
Carrying value of exposure to loss | 184 | 18 |
Commitments, Guarantees and Other | MABS | ||
Variable Interest Entity | ||
Maximum exposure to loss | 1,214 | 684 |
Commitments, Guarantees and Other | CDO | ||
Variable Interest Entity | ||
Maximum exposure to loss | 668 | 99 |
Commitments, Guarantees and Other | MTOB | ||
Variable Interest Entity | ||
Maximum exposure to loss | 0 | 0 |
Commitments, Guarantees and Other | OSF | ||
Variable Interest Entity | ||
Maximum exposure to loss | 164 | 187 |
Commitments, Guarantees and Other | Other | ||
Variable Interest Entity | ||
Maximum exposure to loss | $ 433 | $ 228 |
Variable Interest Entities a111
Variable Interest Entities and Securitization Activities (Transfers of Assets with Continuing Involvement 1) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity | ||
Derivative assets (fair value) | $ 30,813 | $ 31,206 |
Derivative liabilities (fair value) | 26,695 | 29,315 |
SPE | ||
Variable Interest Entity | ||
Retained interests | 988 | 1,306 |
Interests purchased in the secondary market (fair value) | 619 | 154 |
Derivative assets (fair value) | 227 | 350 |
Derivative liabilities (fair value) | 85 | 459 |
SPE | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 411 | 397 |
Interests purchased in the secondary market (fair value) | 533 | 56 |
SPE | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 577 | 909 |
Interests purchased in the secondary market (fair value) | 86 | 98 |
SPE | RML | ||
Variable Interest Entity | ||
SPE assets (UPB) | 15,555 | 19,381 |
Retained interests | 1 | 4 |
Interests purchased in the secondary market (fair value) | 16 | 23 |
Derivative assets (fair value) | 1 | 0 |
Derivative liabilities (fair value) | 0 | 0 |
SPE | RML | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 0 | 0 |
Interests purchased in the secondary market (fair value) | 0 | 0 |
SPE | RML | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 1 | 4 |
Interests purchased in the secondary market (fair value) | 16 | 23 |
SPE | CML | ||
Variable Interest Entity | ||
SPE assets (UPB) | 62,744 | 43,104 |
Retained interests | 391 | 101 |
Interests purchased in the secondary market (fair value) | 160 | 105 |
Derivative assets (fair value) | 0 | 261 |
Derivative liabilities (fair value) | 0 | 0 |
SPE | CML | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 293 | 22 |
Interests purchased in the secondary market (fair value) | 94 | 30 |
SPE | CML | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 98 | 79 |
Interests purchased in the secondary market (fair value) | 66 | 75 |
SPE | U.S. Agency CMO | ||
Variable Interest Entity | ||
SPE assets (UPB) | 11,612 | 11,092 |
Retained interests | 407 | 375 |
Interests purchased in the secondary market (fair value) | 439 | 26 |
Derivative assets (fair value) | 0 | 0 |
Derivative liabilities (fair value) | 0 | 0 |
SPE | U.S. Agency CMO | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 407 | 375 |
Interests purchased in the secondary market (fair value) | 439 | 26 |
SPE | U.S. Agency CMO | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 0 | 0 |
Interests purchased in the secondary market (fair value) | 0 | 0 |
SPE | CLN and Other | ||
Variable Interest Entity | ||
SPE assets (UPB) | 17,060 | 11,613 |
Retained interests | 482 | 826 |
Interests purchased in the secondary market (fair value) | 4 | 0 |
Derivative assets (fair value) | 226 | 89 |
Derivative liabilities (fair value) | 85 | 459 |
SPE | CLN and Other | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 4 | 0 |
Interests purchased in the secondary market (fair value) | 0 | 0 |
SPE | CLN and Other | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 478 | 826 |
Interests purchased in the secondary market (fair value) | $ 4 | $ 0 |
Variable Interest Entities a112
Variable Interest Entities and Securitization Activities (Transfers of Assets with Continuing Involvement 2) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity | ||
Derivative assets | $ 30,813 | $ 31,206 |
Derivative liabilities | 26,695 | 29,315 |
SPE | ||
Variable Interest Entity | ||
Retained interests | 988 | 1,306 |
Interests purchased in the secondary market (fair value) | 619 | 154 |
Derivative assets | 227 | 350 |
Derivative liabilities | 85 | 459 |
SPE | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 411 | 397 |
Interests purchased in the secondary market (fair value) | 533 | 56 |
SPE | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 577 | 909 |
Interests purchased in the secondary market (fair value) | 86 | 98 |
SPE | Level 2 | ||
Variable Interest Entity | ||
Retained interests | 429 | 399 |
Interests purchased in the secondary market (fair value) | 588 | 140 |
Derivative assets | 78 | 348 |
Derivative liabilities | 81 | 98 |
SPE | Level 2 | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 407 | 385 |
Interests purchased in the secondary market (fair value) | 531 | 56 |
SPE | Level 2 | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 22 | 14 |
Interests purchased in the secondary market (fair value) | 57 | 84 |
SPE | Level 3 | ||
Variable Interest Entity | ||
Retained interests | 559 | 907 |
Interests purchased in the secondary market (fair value) | 31 | 14 |
Derivative assets | 149 | 2 |
Derivative liabilities | 4 | 361 |
SPE | Level 3 | Investment Grade | ||
Variable Interest Entity | ||
Retained interests | 4 | 12 |
Interests purchased in the secondary market (fair value) | 2 | 0 |
SPE | Level 3 | Non-investment Grade | ||
Variable Interest Entity | ||
Retained interests | 555 | 895 |
Interests purchased in the secondary market (fair value) | $ 29 | $ 14 |
Variable Interest Entities a113
Variable Interest Entities and Securitization Activities (Proceeds from New Securitization Transactions and Sales of Loans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Special Purpose Entities | |||
Transfer of Financial Assets Accounted for as Sales | |||
Proceeds from new securitization transactions | $ 23,939 | $ 18,975 | $ 21,243 |
Proceeds from retained interests in securitization transactions | 2,337 | 2,701 | 3,062 |
CLO SPEs | Corporate Loans | |||
Transfer of Financial Assets Accounted for as Sales | |||
Proceeds from sale of loans | $ 191 | $ 475 | $ 1,110 |
Variable Interest Entities a114
Variable Interest Entities and Securitization Activities (Assets Sold with Retained Exposure) (Details) - Bilateral OTC - Equity Derivatives - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Transfer of Financial Assets Accounted for as Sales | ||
Carrying value of assets derecognized at the time of sale and gross cash proceeds | $ 19,115 | $ 11,209 |
Fair value of assets sold | 19,138 | 11,301 |
Fair value of derivative assets recognized in the balance sheets | 176 | 128 |
Fair value of derivative liabilities recognized in the balance sheets | $ 153 | $ 36 |
Variable Interest Entities a115
Variable Interest Entities and Securitization Activities (Failed Sales) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Failed Sales | ||
Assets, carrying value | $ 552 | $ 285 |
Liabilities, carrying value | $ 552 | $ 285 |
Regulatory Requirements (Narrat
Regulatory Requirements (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Requirements | |
Description of regulatory requirements on capital adequacy | In addition to the minimum risk-based capital ratio requirements, on a fully phased-in basis by 2019, the Firm will be subject to the following buffers: A greater than 2.5% Common Equity Tier 1 capital conservation buffer; The Common Equity Tier 1 G-SIB capital surcharge, currently at 3%; and Up to a 2.5% Common Equity Tier 1 CCyB, currently set by U.S. banking agencies at zero. |
Description of possible effects of noncompliance | The phase-in amount for each of the buffers was 50% of the fully phased-in buffer requirement in 2017, and increases to 75% in 2018. 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. |
Regulatory Requirements (Capita
Regulatory Requirements (Capital Measures) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Advanced Approach Transitional Rules | ||
Balance | ||
Common Equity Tier 1 capital | $ 60,398 | |
Tier 1 capital | 68,097 | |
Total capital | 78,642 | |
Assets | ||
Total RWAs | 358,141 | |
Adjusted average assets | $ 811,402 | |
Ratio | ||
Common Equity Tier 1 capital | 16.90% | |
Tier 1 capital | 19.00% | |
Total capital | 22.00% | |
Tier 1 leverage | 8.40% | |
Minimum Capital Ratio | ||
Common Equity Tier 1 capital | 5.90% | |
Tier 1 capital | 7.40% | |
Total capital | 9.40% | |
Tier 1 leverage | 4.00% | |
Standardized Approach Transitional Rules | ||
Balance | ||
Common Equity Tier 1 capital | $ 61,134 | |
Tier 1 capital | 69,938 | |
Total capital | 80,275 | |
Assets | ||
Total RWAs | 369,578 | |
Adjusted average assets | $ 842,270 | |
Ratio | ||
Common Equity Tier 1 capital | 16.50% | |
Tier 1 capital | 18.90% | |
Total capital | 21.70% | |
Tier 1 leverage | 8.30% | |
Minimum Capital Ratio | ||
Common Equity Tier 1 capital | 7.30% | |
Tier 1 capital | 8.80% | |
Total capital | 10.80% | |
Tier 1 leverage | 4.00% |
Regulatory Requirements (U.S. B
Regulatory Requirements (U.S. Bank Subsidiaries' Regulatory Capital and Capital Ratios) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Advanced Approach Transitional Rules | ||
Regulatory Requirements | ||
Common Equity Tier 1 capital | $ 60,398 | |
Tier 1 capital | 68,097 | |
Total capital | $ 78,642 | |
Ratio | ||
Common Equity Tier 1 capital | 16.90% | |
Tier 1 capital | 19.00% | |
Total capital | 22.00% | |
Tier 1 leverage | 8.40% | |
Standardized Approach Transitional Rules | ||
Regulatory Requirements | ||
Common Equity Tier 1 capital | $ 61,134 | |
Tier 1 capital | 69,938 | |
Total capital | $ 80,275 | |
Ratio | ||
Common Equity Tier 1 capital | 16.50% | |
Tier 1 capital | 18.90% | |
Total capital | 21.70% | |
Tier 1 leverage | 8.30% | |
MSBNA | Standardized Approach Transitional Rules | ||
Regulatory Requirements | ||
Common Equity Tier 1 capital | $ 15,196 | $ 13,398 |
Tier 1 capital | 15,196 | 13,398 |
Total capital | 15,454 | 14,858 |
Tier 1 leverage | $ 15,196 | $ 13,398 |
Ratio | ||
Common Equity Tier 1 capital | 20.50% | 16.90% |
Tier 1 capital | 20.50% | 16.90% |
Total capital | 20.80% | 18.70% |
Tier 1 leverage | 11.80% | 10.50% |
Minimum Capital Ratio | ||
Common Equity Tier 1 capital | 6.50% | 6.50% |
Tier 1 capital ratio | 8.00% | 8.00% |
Total capital ratio | 10.00% | 10.00% |
Tier 1 leverage ratio | 5.00% | 5.00% |
MSPBNA | Standardized Approach Transitional Rules | ||
Regulatory Requirements | ||
Common Equity Tier 1 capital | $ 6,215 | $ 5,589 |
Tier 1 capital | 6,215 | 5,589 |
Total capital | 6,258 | 5,626 |
Tier 1 leverage | $ 6,215 | $ 5,589 |
Ratio | ||
Common Equity Tier 1 capital | 24.40% | 26.10% |
Tier 1 capital | 24.40% | 26.10% |
Total capital | 24.60% | 26.30% |
Tier 1 leverage | 9.70% | 10.60% |
Minimum Capital Ratio | ||
Common Equity Tier 1 capital | 6.50% | 6.50% |
Tier 1 capital ratio | 8.00% | 8.00% |
Total capital ratio | 10.00% | 10.00% |
Tier 1 leverage ratio | 5.00% | 5.00% |
Regulatory Requirements (Broker
Regulatory Requirements (Broker-Dealer Regulatory Capital Requirements) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
MS&Co. | ||
Regulatory Requirements | ||
Net capital | $ 10,142 | $ 10,311 |
Excess net capital | 8,018 | 8,034 |
MSSB LLC | ||
Regulatory Requirements | ||
Net capital | 2,567 | 3,946 |
Excess net capital | $ 2,400 | $ 3,797 |
Regulatory Requirements (Restri
Regulatory Requirements (Restricted Net Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Regulatory Requirements | ||
Restricted net assets | $ 29,894 | $ 25,258 |
Total Equity (Rollforward of Co
Total Equity (Rollforward of Common Stock Outstanding) (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Total Equity | ||
Shares outstanding at beginning of period | 1,852,481,601 | 1,920,000,000 |
Treasury stock purchases | (92,000,000) | (133,000,000) |
Other | 28,000,000 | 65,000,000 |
Shares outstanding at end of period | 1,788,086,805 | 1,852,481,601 |
Total Equity (Dividends and Sha
Total Equity (Dividends and Share Repurchases) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Repurchase Program | |||||||||||
Repurchases of common stock | $ 1,250 | $ 2 | $ 3,750 | $ 3,500 | |||||||
Capital Plans | |||||||||||
Dividends declared per common share | $ 0.25 | $ 0.25 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.15 | $ 0.15 | $ 0.9 | $ 0.7 | $ 0.55 |
2017 Capital Plan | |||||||||||
Capital Plans | |||||||||||
Authorized repurchase amount of outstanding common stock | $ 5,000 | $ 5,000 | |||||||||
Stock repurchase program start date | Jul. 1, 2017 | ||||||||||
Stock repurchase program expiration date | Jun. 30, 2018 | ||||||||||
Dividends declared per common share | $ 0.25 | $ 0.25 | |||||||||
2016 Capital Plan | |||||||||||
Capital Plans | |||||||||||
Authorized repurchase amount of outstanding common stock | $ 3,500 | $ 3,500 |
Total Equity (Preferred Stock G
Total Equity (Preferred Stock General Disclosure) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total Equity | |||
Preferred stock dividends declared | $ 523 | $ 468 | $ 452 |
Preferred stock shares authorized | 30,000,000 | ||
Preferred Stock | |||
Issuance of preferred stock, net of issuance costs | $ 994 | $ 0 | $ 1,493 |
Series A | |||
Preferred Stock | |||
Preferred stock dividend declared (per share) | $ 255.56 | ||
Depositary Shares issued (in shares) | 44,000,000 | ||
Preferred stock par value (per share) | $ 0.01 | ||
Start date of preferred stock redemption | Jul. 15, 2011 | ||
Preferred stock redemption price (per share) | $ 25,000 | ||
Preferred stock redemption price per Depositary Share | 25 | ||
Series K | |||
Preferred Stock | |||
Preferred stock dividend declared (per share) | $ 365.63 | ||
Depositary Shares issued (in shares) | 40,000,000 | ||
Preferred stock par value (per share) | $ 0.01 | ||
Start date of preferred stock redemption | Apr. 15, 2027 | ||
Preferred stock redemption price (per share) | $ 25,000 | ||
Preferred stock redemption price per Depositary Share | $ 25 |
Total Equity (Preferred Stock O
Total Equity (Preferred Stock Outstanding) (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Class of Stock | ||
Preferred stock carrying value | $ 8,520 | $ 7,520 |
Series A | ||
Class of Stock | ||
Preferred stock shares outstanding | 44,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 1,100 | 1,100 |
Series C | ||
Class of Stock | ||
Preferred stock shares outstanding | 519,882 | |
Liquidation preference per share | $ 1,000 | |
Preferred stock carrying value | $ 408 | 408 |
Series C | MUFG | ||
Class of Stock | ||
Preferred stock shares issued | 1,160,791 | |
Preferred stock aggregate purchase price | $ 911 | |
Preferred stock redemption, shares | 640,909 | |
Preferred stock redemption amount | $ 503 | |
Preferred stock converted to common shares | $ 705 | |
Series E | ||
Class of Stock | ||
Preferred stock shares outstanding | 34,500 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 862 | 862 |
Series F | ||
Class of Stock | ||
Preferred stock shares outstanding | 34,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 850 | 850 |
Series G | ||
Class of Stock | ||
Preferred stock shares outstanding | 20,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 500 | 500 |
Series H | ||
Class of Stock | ||
Preferred stock shares outstanding | 52,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 1,300 | 1,300 |
Series I | ||
Class of Stock | ||
Preferred stock shares outstanding | 40,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 1,000 | 1,000 |
Series J | ||
Class of Stock | ||
Preferred stock shares outstanding | 60,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 1,500 | 1,500 |
Series K | ||
Class of Stock | ||
Preferred stock shares outstanding | 40,000 | |
Liquidation preference per share | $ 25,000 | |
Preferred stock carrying value | $ 1,000 | $ 0 |
Total Equity (Preferred Stock I
Total Equity (Preferred Stock Issuance Description) (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Series A | |
Preferred Stock | |
Issuance Date | Jul. 31, 2016 |
Depositary Shares issued (in shares) | shares | 44,000,000 |
Fraction of underlying stock that each Depositary Share represents | 0.001 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Jul. 15, 2011 |
Preferred stock dividend declared (per share) | $ 255.56 |
Preferred stock redemption price per Depositary Share | $ 25 |
Series C | |
Preferred Stock | |
Issuance Date | Oct. 13, 2008 |
Preferred stock dividend rate | 10.00% |
Preferred stock redemption price (per share) | $ 1,100 |
Start date of preferred stock redemption | Oct. 15, 2011 |
Preferred stock dividend declared (per share) | $ 25 |
Series E | |
Preferred Stock | |
Issuance Date | Sep. 30, 2013 |
Depositary Shares issued (in shares) | shares | 34,500,000 |
Fraction of underlying stock that each Depositary Share represents | 0.001 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Oct. 15, 2023 |
Preferred stock dividend declared (per share) | $ 445.31 |
Preferred stock redemption price per Depositary Share | $ 25 |
Series F | |
Preferred Stock | |
Issuance Date | Dec. 10, 2013 |
Depositary Shares issued (in shares) | shares | 34,000,000 |
Fraction of underlying stock that each Depositary Share represents | 0.001 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Jan. 15, 2024 |
Preferred stock dividend declared (per share) | $ 429.69 |
Preferred stock redemption price per Depositary Share | $ 25 |
Series G | |
Preferred Stock | |
Issuance Date | Apr. 29, 2014 |
Depositary Shares issued (in shares) | shares | 20,000,000 |
Fraction of underlying stock that each Depositary Share represents | 0.001 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock dividend rate | 6.625% |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Jul. 15, 2019 |
Preferred stock dividend declared (per share) | $ 414.06 |
Preferred stock redemption price per Depositary Share | $ 25 |
Series H | |
Preferred Stock | |
Issuance Date | Apr. 29, 2014 |
Depositary Shares issued (in shares) | shares | 1,300,000 |
Fraction of underlying stock that each Depositary Share represents | 0.04 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Jul. 15, 2019 |
Preferred stock dividend declared (per share) | $ 681.25 |
Preferred stock redemption price per Depositary Share | $ 1,000 |
Series I | |
Preferred Stock | |
Issuance Date | Sep. 18, 2014 |
Depositary Shares issued (in shares) | shares | 40,000,000 |
Fraction of underlying stock that each Depositary Share represents | 0.001 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Oct. 15, 2024 |
Preferred stock dividend declared (per share) | $ 398.44 |
Preferred stock redemption price per Depositary Share | $ 25 |
Series J | |
Preferred Stock | |
Issuance Date | Mar. 19, 2015 |
Depositary Shares issued (in shares) | shares | 1,500,000 |
Fraction of underlying stock that each Depositary Share represents | 0.04 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Jul. 15, 2020 |
Preferred stock dividend declared (per share) | $ 693.75 |
Preferred stock redemption price per Depositary Share | $ 1,000 |
Series K | |
Preferred Stock | |
Issuance Date | Jan. 31, 2017 |
Depositary Shares issued (in shares) | shares | 40,000,000 |
Fraction of underlying stock that each Depositary Share represents | 0.001 |
Preferred stock par value (per share) | $ 0.01 |
Preferred stock redemption price (per share) | $ 25,000 |
Start date of preferred stock redemption | Apr. 15, 2027 |
Preferred stock dividend declared (per share) | $ 365.63 |
Preferred stock redemption price per Depositary Share | $ 25 |
Total Equity (AOCI) (Details)
Total Equity (AOCI) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cumulative adjustment for accounting change related to DVA | [1] | $ 0 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning balance | $ (2,643) | (1,656) | $ (1,248) | |
Cumulative adjustment for accounting change related to DVA | [1] | (312) | ||
OCI during the period | (417) | (675) | (408) | |
Ending balance | (3,060) | (2,643) | (1,656) | |
Foreign Currency Translation Adjustments | ||||
Beginning balance | (986) | (963) | (663) | |
Cumulative adjustment for accounting change related to DVA | 0 | |||
OCI during the period | 219 | (23) | (300) | |
Ending balance | (767) | (986) | (963) | |
AFS Securities | ||||
Beginning balance | (588) | (319) | (73) | |
Cumulative adjustment for accounting change related to DVA | 0 | |||
OCI during the period | 41 | (269) | (246) | |
Ending balance | (547) | (588) | (319) | |
Pension, Postretirement and Other | ||||
Beginning balance | (474) | (374) | (512) | |
Cumulative adjustment for accounting change related to DVA | 0 | |||
OCI during the period | (117) | (100) | 138 | |
Ending balance | (591) | (474) | (374) | |
DVA | ||||
Beginning balance | (595) | 0 | 0 | |
Cumulative adjustment for accounting change related to DVA | (312) | |||
OCI during the period | (560) | (283) | 0 | |
Ending balance | $ (1,155) | $ (595) | $ 0 | |
[1] | DVA—represents the change in fair value resulting from fluctuations in our credit spreads and other credit factors related to liabilities carried at fair value under the fair value option, primarily related to certain Borrowings (structured notes) . 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 unrealized DVA amount, net of noncontrolling interests and tax, related to outstanding liabilities under the fair value option election from Retained earnings into AOC I . See Note 15 for further information. |
Total Equity (Period Changes in
Total Equity (Period Changes in OCI Components) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pre-tax Gain (Loss): Foreign Currency Translation Adjustments | |||
OCI activity | $ 64 | $ (24) | $ (119) |
Reclassified to earnings | 0 | 4 | 0 |
Net OCI | 64 | (20) | (119) |
Pre-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities | |||
OCI activity | 100 | (313) | (305) |
Reclassified to earnings | (35) | (113) | (84) |
Net OCI | 65 | (426) | (389) |
Pre-tax Gain (Loss): Pension, Postretirement and Other | |||
OCI activity | (193) | (162) | 202 |
Reclassified to earnings | 2 | (3) | 9 |
Net OCI | (191) | (165) | 211 |
Pre-tax Gain (Loss): Change in Net DVA | |||
OCI activity | (922) | (429) | |
Reclassified to earnings | 12 | (31) | |
Net OCI | (910) | (460) | |
Income Tax Benefit (Provision): Foreign Currency Translation Adjustments | |||
OCI activity | 187 | 9 | (185) |
Reclassified to earnings | 0 | 0 | 0 |
Net OCI | 187 | 9 | (185) |
Income Tax Benefit (Provision): Change in Net Unrealized Gains (Losses) on AFS Securities | |||
OCI activity | (36) | 116 | 112 |
Reclassified to earnings | 12 | 41 | 31 |
Net OCI | (24) | 157 | 143 |
Income Tax Benefit (Provision): Pension, Postretirement and Other | |||
OCI activity | 75 | 64 | (70) |
Reclassified to earnings | (1) | 1 | (3) |
Net OCI | 74 | 65 | (73) |
Income Tax Benefit (Provision): Change in Net DVA | |||
OCI activity | 325 | 153 | |
Reclassified to earnings | (3) | 11 | |
Net OCI | 322 | 164 | |
After-tax Gain (Loss): Foreign Currency Translation Adjustments | |||
OCI activity | 251 | (15) | (304) |
Reclassified to earnings | 0 | 4 | 0 |
Net OCI | 251 | (11) | (304) |
After-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities | |||
OCI activity | 64 | (197) | (193) |
Reclassified to earnings | (23) | (72) | (53) |
Net OCI | 41 | (269) | (246) |
After-tax Gain (Loss): Pension, Postretirement and Other | |||
OCI activity | (118) | (98) | 132 |
Reclassified to earnings | 1 | (2) | 6 |
Net OCI | (117) | (100) | 138 |
After-tax Gain (Loss): Change in Net DVA | |||
OCI activity | (597) | (276) | |
Reclassified to earnings | 9 | (20) | |
Net OCI | (588) | (296) | 0 |
Non-controlling Interests | |||
After-tax Gain (Loss): Foreign Currency Translation Adjustments | |||
OCI activity | 32 | 12 | (4) |
Reclassified to earnings | 0 | 0 | 0 |
Net OCI | 32 | 12 | (4) |
After-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities | |||
OCI activity | 0 | 0 | 0 |
Reclassified to earnings | 0 | 0 | 0 |
Net OCI | 0 | 0 | 0 |
After-tax Gain (Loss): Pension, Postretirement and Other | |||
OCI activity | 0 | 0 | 0 |
Reclassified to earnings | 0 | 0 | 0 |
Net OCI | 0 | 0 | 0 |
After-tax Gain (Loss): Change in Net DVA | |||
OCI activity | (28) | (13) | |
Reclassified to earnings | 0 | 0 | |
Net OCI | (28) | (13) | |
Net | |||
After-tax Gain (Loss): Foreign Currency Translation Adjustments | |||
OCI activity | 219 | (27) | (300) |
Reclassified to earnings | 0 | 4 | 0 |
Net OCI | 219 | (23) | (300) |
After-tax Gain (Loss): Change in Net Unrealized Gains (Losses) on AFS Securities | |||
OCI activity | 64 | (197) | (193) |
Reclassified to earnings | (23) | (72) | (53) |
Net OCI | 41 | (269) | (246) |
After-tax Gain (Loss): Pension, Postretirement and Other | |||
OCI activity | (118) | (98) | 132 |
Reclassified to earnings | 1 | (2) | 6 |
Net OCI | (117) | (100) | $ 138 |
After-tax Gain (Loss): Change in Net DVA | |||
OCI activity | (569) | (263) | |
Reclassified to earnings | 9 | (20) | |
Net OCI | $ (560) | $ (283) |
Total Equity (Cumulative Foreig
Total Equity (Cumulative Foreign Currency Translation Adjustments) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Total Equity | ||
Associated with net investments in subsidiaries with a non-U.S. dollar functional currency | $ (1,434) | $ (2,018) |
Hedges, net of tax | 667 | 1,032 |
Total | (767) | (986) |
Carrying value of net investments in non-U.S. dollar functional currency subsidiaries subject to hedges | $ 10,139 | $ 8,856 |
Earnings per Common Share (Calc
Earnings per Common Share (Calculation of Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic EPS | |||||||||||
Income from continuing operations | $ 661 | $ 1,785 | $ 1,796 | $ 1,993 | $ 1,680 | $ 1,632 | $ 1,650 | $ 1,160 | $ 6,235 | $ 6,122 | $ 6,295 |
Income (loss) from discontinued operations | 2 | 6 | (5) | (22) | 0 | 8 | (4) | (3) | (19) | 1 | (16) |
Net income | 663 | 1,791 | 1,791 | 1,971 | 1,680 | 1,640 | 1,646 | 1,157 | 6,216 | 6,123 | 6,279 |
Net income applicable to noncontrolling interests | 20 | 10 | 34 | 41 | 14 | 43 | 64 | 23 | 105 | 144 | 152 |
Net income applicable to Morgan Stanley | 643 | 1,781 | 1,757 | 1,930 | 1,666 | 1,597 | 1,582 | 1,134 | 6,111 | 5,979 | 6,127 |
Less: Preferred stock dividends and other | (170) | (93) | (170) | (90) | (156) | (79) | (157) | (79) | (523) | (471) | (456) |
Earnings applicable to Morgan Stanley common shareholders | $ 473 | $ 1,688 | $ 1,587 | $ 1,840 | $ 1,510 | $ 1,518 | $ 1,425 | $ 1,055 | $ 5,588 | $ 5,508 | $ 5,671 |
Weighted average common shares outstanding | 1,780 | 1,849 | 1,909 | ||||||||
Earnings per basic common share | |||||||||||
Income from continuing operations | $ 0.27 | $ 0.95 | $ 0.89 | $ 1.03 | $ 0.84 | $ 0.82 | $ 0.77 | $ 0.56 | $ 3.15 | $ 2.98 | $ 2.98 |
Income (loss) from discontinued operations | 0 | 0 | 0 | (0.01) | 0 | 0.01 | (0.01) | 0 | (0.01) | 0 | (0.01) |
Earnings per basic common share | $ 0.27 | $ 0.95 | $ 0.89 | $ 1.02 | $ 0.84 | $ 0.83 | $ 0.76 | $ 0.56 | $ 3.14 | $ 2.98 | $ 2.97 |
Diluted EPS | |||||||||||
Earnings applicable to Morgan Stanley common shareholders | $ 473 | $ 1,688 | $ 1,587 | $ 1,840 | $ 1,510 | $ 1,518 | $ 1,425 | $ 1,055 | $ 5,588 | $ 5,508 | $ 5,671 |
Weighted average common shares outstanding | 1,780 | 1,849 | 1,909 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options and RSUs | 41 | 38 | 44 | ||||||||
Weighted average common shares outstanding and common stock equivalents | 1,821 | 1,887 | 1,953 | ||||||||
Earnings per diluted common share | |||||||||||
Income from continuing operations | $ 0.26 | $ 0.93 | $ 0.87 | $ 1.01 | $ 0.81 | $ 0.8 | $ 0.75 | $ 0.55 | $ 3.08 | $ 2.92 | $ 2.91 |
Income (loss) from discontinued operations | 0 | 0 | 0 | (0.01) | 0 | 0.01 | 0 | 0 | (0.01) | 0 | (0.01) |
Earnings per diluted common share | $ 0.26 | $ 0.93 | $ 0.87 | $ 1 | $ 0.81 | $ 0.81 | $ 0.75 | $ 0.55 | $ 3.07 | $ 2.92 | $ 2.9 |
Weighted average antidilutive RSUs and stock options (excluded from the computation of diluted EPS) | 0 | 13 | 12 |
Interest Income and Interest130
Interest Income and Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest income | |||||||||||
Investment securities | $ 1,334 | $ 1,142 | $ 876 | ||||||||
Loans | 3,298 | 2,724 | 2,163 | ||||||||
Securities purchased under agreements to resell and Securities borrowed | 169 | (374) | (560) | ||||||||
Trading assets, net of Trading liabilities | 2,029 | 2,131 | 2,262 | ||||||||
Customer receivables and Other | 2,167 | 1,393 | 1,094 | ||||||||
Total Interest income | 8,997 | 7,016 | 5,835 | ||||||||
Interest expense | |||||||||||
Deposits | 187 | 83 | 78 | ||||||||
Borrowings | 4,285 | 3,606 | 3,497 | ||||||||
Securities sold under agreements to repurchase and Securities loaned | 1,237 | 977 | 1,024 | ||||||||
Customer payables and Other | (12) | (1,348) | (1,857) | ||||||||
Total interest expense | 5,697 | 3,318 | 2,742 | ||||||||
Net interest | $ 995 | $ 783 | $ 751 | $ 771 | $ 883 | $ 1,003 | $ 913 | $ 899 | $ 3,300 | $ 3,698 | $ 3,093 |
Deferred Compensation Plans (St
Deferred Compensation Plans (Stock-based Compensation Plans) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Payment Awards | |||
Stock-based compensation expense | $ 1,026 | $ 1,137 | $ 1,103 |
Retirement eligible awards | 85 | 73 | 68 |
Tax benefit | 225 | 381 | 369 |
Unrecognized Compensation Cost Related to Unvested Stock-Based Awards | |||
To be recognized in 2018 | 357 | ||
To be recognized in 2019 | 158 | ||
To be recognized thereafter | 27 | ||
Total | $ 542 | ||
Common shares available for future awards | 146 | ||
RSUs | |||
Share-based Payment Awards | |||
Stock-based compensation expense | $ 951 | 1,054 | 1,080 |
Stock Options | |||
Share-based Payment Awards | |||
Stock-based compensation expense | 0 | 2 | (3) |
PSUs | |||
Share-based Payment Awards | |||
Stock-based compensation expense | $ 75 | $ 81 | $ 26 |
Deferred Compensation Plans (Ve
Deferred Compensation Plans (Vested and Unvested RSU Activity) (Details) - RSUs - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Non-option awards at beginning of period | 100 | ||
Awarded | 22 | ||
Conversion to common stock | (31) | ||
Cancelled | (3) | ||
Non-option awards at end of period | 88 | 100 | |
Aggregate intrinsic value of RSUs | $ 4,633 | ||
Weighted Average Award Date Fair Value | |||
Non-option awards at beginning of period | $ 29.35 | ||
Awarded | 42.98 | $ 25.48 | $ 34.76 |
Conversions to common stock | 30.03 | ||
Cancelled | 31.96 | ||
Non-option awards at end of period | $ 32.46 | $ 29.35 | |
Weighted average remaining term | 1 year 1 month |
Deferred Compensation Plans (Un
Deferred Compensation Plans (Unvested RSU Activity) (Details) - RSUs - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Unvested RSUs at beginning of period | 65 | ||
Awarded | 22 | ||
Vested | (34) | ||
Cancelled | (3) | ||
Unvested RSUs at end of period | 50 | 65 | |
Weighted Average Award Date Fair Value | |||
Unvested RSUs at beginning of period | $ 28.7 | ||
Awarded | 42.98 | $ 25.48 | $ 34.76 |
Vested | 30.46 | ||
Cancelled | 31.96 | ||
Unvested RSUs at end of period | $ 33.64 | $ 28.7 | |
Fair value of RSUs vested | $ 1,333 | $ 1,068 | $ 1,646 |
Fair value of RSUs converted to common stock | $ 1,470 | $ 1,088 | $ 1,693 |
Deferred Compensation Plans (Pe
Deferred Compensation Plans (Performance-Based Stock Units) (Details) - PSUs - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Payment Awards | |||
Terms of award | PSUs will vest and convert to shares of common stock only if the Firm satisfies predetermined performance and market-based conditions over a three-year performance period. | ||
Fair Value Assumptions | |||
Risk-free interest rate | 1.50% | 1.10% | 0.90% |
Expected stock price volatility | 27.00% | 25.40% | 29.60% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-based Compensation Awards Activity | |||
Non-option awards at beginning of period | 4 | ||
Awarded | 1 | ||
Conversion to common stock | (2) | ||
Non-option awards at end of period | 3 | 4 | |
Minimum | |||
Share-based Payment Awards | |||
Percentage of PSUs that vested | 0.00% | ||
Maximum | |||
Share-based Payment Awards | |||
Percentage of PSUs that vested | 150.00% | ||
MS Adjusted ROE | |||
Share-based Payment Awards | |||
Fair value per PSU on award date | $ 42.64 | $ 25.19 | $ 34.58 |
Relative MS TSR | |||
Share-based Payment Awards | |||
Fair value per PSU on award date | $ 48.02 | $ 24.51 | $ 38.07 |
Deferred Compensation Plans (De
Deferred Compensation Plans (Deferred Cash-based Compensation Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Compensation Arrangements [Abstract] | |||
Deferred cash-based compensation expense | $ 1,039 | $ 950 | $ 660 |
Return on referenced investments | 696 | 228 | 112 |
Total | 1,735 | 1,178 | 772 |
Retirement eligible awards | 176 | $ 151 | $ 144 |
Unrecognized Compensation Cost Related to Unvested Deferred Cash-Based Awards | |||
To be recognized in 2018 | 375 | ||
To be recognized in 2019 | 125 | ||
To be recognized thereafter | 195 | ||
Total | $ 695 |
Deferred Compensation Plans (An
Deferred Compensation Plans (Annual Compensation Cost for 2017 Performance Year Awards) (Details) - 2017 Performance Year Awards $ in Millions | Dec. 31, 2017USD ($) |
Deferred Compensation Awards | |
Stock-based awards, 2018 | $ 519 |
Stock-based awards, 2019 | 198 |
Stock-based award, Thereafter | 165 |
Stock-based award, Total | 882 |
Deferred cash-based awards, 2018 | 616 |
Deferred cash-based awards, 2019 | 290 |
Deferred cash-based awards, Thereafter | 121 |
Deferred cash-based awards, Total | 1,027 |
Total, 2018 | 1,135 |
Total, 2019 | 488 |
Total, Thereafter | 286 |
Total | $ 1,909 |
Employee Benefit Plans (Net Per
Employee Benefit Plans (Net Periodic Benefit Expense (Income)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Amounts Recognized in Other Comprehensive Loss (Income) on Pre-tax Basis | |||
Description of amortization of unrealized net gains and losses | The Firm generally amortizes into net periodic benefit expense (income) the unrecognized net gains and losses exceeding 10% of the greater of the projected benefit obligation or the market-related value of plan assets. | ||
Pension Plans | |||
Components of Net Periodic Benefit Expense (Income) | |||
Service cost, benefits earned during the period | $ 16 | $ 17 | $ 19 |
Interest cost on projected benefit obligation | 146 | 150 | 152 |
Expected return on plan assets | (117) | (122) | (120) |
Net amortization of prior service credit | 0 | 0 | (1) |
Net amortization of actuarial loss | 17 | 12 | 26 |
Settlement loss | 0 | 0 | 2 |
Net periodic benefit expense (income) | 62 | 57 | 78 |
Amounts Recognized in Other Comprehensive Loss (Income) on Pre-tax Basis | |||
Net gain (loss) | (205) | (149) | 212 |
Prior service credit (cost) | 2 | 1 | 1 |
Amortization of prior service credit | 0 | 0 | (1) |
Amortization of net loss | 17 | 12 | 28 |
Total recognized in other comprehensive income (loss) | $ (186) | $ (136) | $ 240 |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense | |||
Discount rate | 4.01% | 4.27% | 3.86% |
Expected long-term rate of return on plan assets | 3.52% | 3.61% | 3.59% |
Rate of future compensation increases | 3.10% | 3.19% | 2.85% |
Other Postretirement Plan | |||
Components of Net Periodic Benefit Expense (Income) | |||
Service cost, benefits earned during the period | $ 1 | $ 1 | $ 1 |
Interest cost on projected benefit obligation | 3 | 4 | 3 |
Net amortization of prior service credit | (16) | (17) | (18) |
Net periodic benefit expense (income) | (12) | (12) | (14) |
Amounts Recognized in Other Comprehensive Loss (Income) on Pre-tax Basis | |||
Net gain (loss) | 0 | (2) | (3) |
Prior service credit (cost) | 0 | 0 | (9) |
Amortization of prior service credit | (16) | (17) | (18) |
Total recognized in other comprehensive income (loss) | $ (16) | $ (19) | $ (30) |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense | |||
Discount rate | 4.01% | 4.13% | 3.77% |
Employee Benefit Plans (Rollfor
Employee Benefit Plans (Rollforward of the Benefit Obligation and Fair Value of Plan Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plans | |||
Rollforward of benefit obligation | |||
Benefit obligation at beginning of year | $ 3,711 | $ 3,604 | |
Service cost | 16 | 17 | $ 19 |
Interest cost | 146 | 150 | 152 |
Actuarial loss (gain) | 304 | 223 | |
Plan amendments | (2) | (1) | |
Plan settlements | (9) | (19) | |
Benefits paid | (242) | (219) | |
Other, including foreign currency exchange rate changes | 42 | (44) | |
Benefit obligation at end of year | 3,966 | 3,711 | 3,604 |
Rollforward of fair value of plan assets | |||
Fair value of plan assets at beginning of year | 3,431 | 3,497 | |
Actual return on plan assets | 217 | 196 | |
Employer contributions | 32 | 38 | |
Benefits paid | (242) | (219) | |
Plan settlements | (9) | (19) | |
Other, including foreign currency exchange rate changes | 39 | (62) | |
Fair value of plan assets at end of year | 3,468 | 3,431 | 3,497 |
Amounts recognized in the balance sheets | |||
Assets | 87 | 230 | |
Liabilities | (585) | (510) | |
Net amount recognized | (498) | (280) | |
Funded (unfunded) status | (498) | (280) | |
Other Postretirement Plan | |||
Rollforward of benefit obligation | |||
Benefit obligation at beginning of year | 88 | 87 | |
Service cost | 1 | 1 | 1 |
Interest cost | 3 | 4 | 3 |
Actuarial loss (gain) | 0 | 1 | |
Plan amendments | 0 | 0 | |
Plan settlements | 0 | 0 | |
Benefits paid | (6) | (5) | |
Other, including foreign currency exchange rate changes | 0 | 0 | |
Benefit obligation at end of year | 86 | 88 | 87 |
Rollforward of fair value of plan assets | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 6 | 5 | |
Benefits paid | (6) | (5) | |
Plan settlements | 0 | 0 | |
Other, including foreign currency exchange rate changes | 0 | 0 | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Amounts recognized in the balance sheets | |||
Assets | 0 | 0 | |
Liabilities | (86) | (88) | |
Net amount recognized | (86) | (88) | |
Funded (unfunded) status | $ (86) | $ (88) |
Employee Benefit Plans (AOCI) (
Employee Benefit Plans (AOCI) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pension Plans | ||
Amounts recognized in accumulated other comprehensive income (loss) | ||
Prior service credit (cost) | $ 4 | $ 2 |
Net gain (loss) | (951) | (763) |
Net gain (loss) recognized | (947) | (761) |
Estimated Amortization from AOCI into Net Periodic Benefit Expense (Income) in 2018 | ||
Prior service credit (cost) | 1 | |
Net gain (loss) | (27) | |
Other Postretirement Plan | ||
Amounts recognized in accumulated other comprehensive income (loss) | ||
Prior service credit (cost) | 1 | 17 |
Net gain (loss) | 0 | 0 |
Net gain (loss) recognized | 1 | $ 17 |
Estimated Amortization from AOCI into Net Periodic Benefit Expense (Income) in 2018 | ||
Prior service credit (cost) | 1 | |
Net gain (loss) | $ 0 |
Employee Benefit Plans (Pension
Employee Benefit Plans (Pension Plans with Projected Benefit Obligations in Excess of Fair Value of Plan Assets) (Details) - Pension Plans - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pension Plans with Benefit Obligations in Excess of the Fair Value of Plan Assets | ||
Projected benefit obligation | $ 3,676 | $ 566 |
Accumulated benefit obligation | 3,663 | 552 |
Fair value of plan assets | 3,091 | 56 |
Accumulated benefit obligation | $ 3,953 | $ 3,696 |
Employee Benefit Plans (Assumpt
Employee Benefit Plans (Assumptions) (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Plans | ||
Weighted Average Assumptions Used to Determine Benefit Obligation | ||
Discount rate | 3.46% | 4.01% |
Rate of future compensation increase | 3.38% | 3.10% |
Other Postretirement Plan | ||
Weighted Average Assumptions Used to Determine Benefit Obligation | ||
Discount rate | 3.44% | 4.01% |
Other Postretirement Plan | U.S. | ||
Assumed Health Care Cost Trend Rates | ||
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | 4.50% | 4.50% |
Year that the rate reaches the ultimate trend rate | 2,038 | 2,038 |
Other Postretirement Plan | U.S. | Medical | ||
Assumed Health Care Cost Trend Rates | ||
Health care cost trend rate assumed for next year | 5.81% | 5.96% |
Other Postretirement Plan | U.S. | Prescription | ||
Assumed Health Care Cost Trend Rates | ||
Health care cost trend rate assumed for next year | 8.49% | 9.32% |
Employee Benefit Plans (Fair Va
Employee Benefit Plans (Fair Value of Plan Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
U.S. Qualified Plan | |||
Pension and Other Postretirement Plans | |||
Percentage as to total pension plan assets | 87.00% | ||
Pension Plans | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | $ 3,468 | $ 3,431 | $ 3,497 |
Pension Plans | Derivative Contracts (Liabilities) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2 | 225 | |
Pension Plans | Other Payables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 11 | ||
Pension Plans | Liabilities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 13 | 225 | |
Pension Plans | Cash and Cash Equivalents | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 6 | 55 | |
Pension Plans | U.S. Government and Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2,716 | 1,916 | |
Pension Plans | U.S. Treasury Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2,398 | 1,493 | |
Pension Plans | U.S. Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 318 | 423 | |
Pension Plans | Corporate and Other Debt | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 14 | 13 | |
Pension Plans | CDO | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 14 | 13 | |
Pension Plans | Derivative Contracts (Assets) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 1 | 159 | |
Pension Plans | Derivative-related Cash Collateral Receivable | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 76 | ||
Pension Plans | Other Investments | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 47 | 38 | |
Pension Plans | Other Receivables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 26 | ||
Pension Plans | Assets | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2,810 | 2,257 | |
Pension Plans | Level 1 | Derivative Contracts (Liabilities) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 1 | Other Payables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 11 | ||
Pension Plans | Level 1 | Liabilities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 11 | 0 | |
Pension Plans | Level 1 | Cash and Cash Equivalents | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 6 | 55 | |
Pension Plans | Level 1 | U.S. Government and Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2,398 | 1,493 | |
Pension Plans | Level 1 | U.S. Treasury Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2,398 | 1,493 | |
Pension Plans | Level 1 | U.S. Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 1 | Corporate and Other Debt | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 1 | CDO | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 1 | Derivative Contracts (Assets) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 1 | Derivative-related Cash Collateral Receivable | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | ||
Pension Plans | Level 1 | Other Investments | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 1 | Other Receivables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 26 | ||
Pension Plans | Level 1 | Assets | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2,430 | 1,548 | |
Pension Plans | Level 2 | Derivative Contracts (Liabilities) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2 | 225 | |
Pension Plans | Level 2 | Other Payables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | ||
Pension Plans | Level 2 | Liabilities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 2 | 225 | |
Pension Plans | Level 2 | Cash and Cash Equivalents | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 2 | U.S. Government and Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 318 | 423 | |
Pension Plans | Level 2 | U.S. Treasury Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 2 | U.S. Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 318 | 423 | |
Pension Plans | Level 2 | Corporate and Other Debt | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 14 | 13 | |
Pension Plans | Level 2 | CDO | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 14 | 13 | |
Pension Plans | Level 2 | Derivative Contracts (Assets) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 1 | 159 | |
Pension Plans | Level 2 | Derivative-related Cash Collateral Receivable | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 76 | ||
Pension Plans | Level 2 | Other Investments | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 2 | Other Receivables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | ||
Pension Plans | Level 2 | Assets | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 333 | 671 | |
Pension Plans | Level 3 | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 47 | 38 | $ 35 |
Pension Plans | Level 3 | Derivative Contracts (Liabilities) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | Other Payables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | ||
Pension Plans | Level 3 | Liabilities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | Cash and Cash Equivalents | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | U.S. Government and Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | U.S. Treasury Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | U.S. Agency Securities | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | Corporate and Other Debt | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | CDO | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | Derivative Contracts (Assets) | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | 0 | |
Pension Plans | Level 3 | Derivative-related Cash Collateral Receivable | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | ||
Pension Plans | Level 3 | Other Investments | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 47 | 38 | |
Pension Plans | Level 3 | Other Receivables | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | 0 | ||
Pension Plans | Level 3 | Assets | |||
Pension and Other Postretirement Plans | |||
Pension plan assets | $ 47 | $ 38 |
Employee Benefit Plans (Roll143
Employee Benefit Plans (Rollforward of Level 3 Plan Assets) (Details) - Pension Plans - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Pension and Other Postretirement Plans | ||
Fair value of plan assets at beginning of year | $ 3,431 | $ 3,497 |
Fair value of plan assets at end of year | 3,468 | 3,431 |
Level 3 | ||
Pension and Other Postretirement Plans | ||
Fair value of plan assets at beginning of year | 38 | 35 |
Actual return on plan assets related to assets held at end of period | 1 | 0 |
Purchases, sales, other settlements and issuances, net | 8 | 3 |
Fair value of plan assets at end of year | $ 47 | $ 38 |
Employee Benefit Plans (Funds M
Employee Benefit Plans (Funds Measured at NAV per Share) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | $ 2,564 | $ 2,816 |
Pension Plans | ||
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | 671 | 1,399 |
Pension Plans | Commingled Trust Funds: Fixed Income | ||
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | 0 | 999 |
Pension Plans | Commingled Trust Funds: Money Market | ||
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | 285 | 86 |
Pension Plans | Foreign Funds: Fixed Income | ||
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | 126 | 111 |
Pension Plans | Foreign Funds: Liquidity | ||
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | 41 | 9 |
Pension Plans | Foreign Funds: Targeted Cash Flow | ||
Pension and Other Postretirement Plans | ||
Funds measured at NAV per share | $ 219 | $ 194 |
Employee Benefit Plans (Expecte
Employee Benefit Plans (Expected Future Benefit Payments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Pension and Other Postretirement Plans | |
Expected contributions by employer in 2018 | $ 50 |
Pension Plans | |
Pension and Other Postretirement Plans | |
2,018 | 140 |
2,019 | 142 |
2,020 | 148 |
2,021 | 156 |
2,022 | 166 |
2023-2027 | 922 |
Other Postretirement Plan | |
Pension and Other Postretirement Plans | |
2,018 | 7 |
2,019 | 7 |
2,020 | 7 |
2,021 | 7 |
2,022 | 7 |
2023-2027 | $ 31 |
Employee Benefit Plans (401(k)
Employee Benefit Plans (401(k) and Defined Contribution Pension Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Morgan Stanley 401(k) Plan | |||
Defined Contribution Plans | |||
Descriptions of plan | For 2017, 2016 and 2015, the Firm made a $1 for $1 Firm match up to 4% of eligible pay, up to the IRS limit. | ||
Maximum percent of employer matching contributions | 4.00% | 4.00% | 4.00% |
Expense | $ 258 | $ 250 | $ 255 |
Morgan Stanley 401(k) Plan | Eligible U.S. Employees with Eligible Pay Less than or Equal to $100,000 | |||
Defined Contribution Plans | |||
Percent of employer matching contribution of eligible pay | 2.00% | ||
Non-U.S. Defined Contribution Pension Plans | |||
Defined Contribution Plans | |||
Expense | $ 106 | $ 101 | $ 111 |
Income Taxes (Provision for (Be
Income Taxes (Provision for (Benefit from) Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||||||||||
U.S. federal | $ 476 | $ 330 | $ 239 | ||||||||
U.S. state and local | 125 | 221 | 144 | ||||||||
Current income tax expense (benefit) | 1,414 | 1,148 | 1,006 | ||||||||
Deferred: | |||||||||||
U.S. federal | 2,656 | 1,336 | 1,031 | ||||||||
U.S. state and local | 84 | 74 | 43 | ||||||||
Deferred income tax expense (benefit) | 2,754 | 1,578 | 1,194 | ||||||||
Provision for income taxes from continuing operations | $ 1,810 | $ 697 | $ 846 | $ 815 | $ 566 | $ 749 | $ 833 | $ 578 | 4,168 | 2,726 | 2,200 |
Provision for (benefit from) income taxes from discontinued operations | (7) | 1 | (7) | ||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Net income tax provision (benefit) accrued in Additional paid-in capital related to employee share-based compensation | 0 | 24 | (203) | ||||||||
U.K. | |||||||||||
Current: | |||||||||||
Non-U.S. | 401 | 196 | 247 | ||||||||
Deferred: | |||||||||||
Non-U.S. | 18 | 56 | (56) | ||||||||
Japan | |||||||||||
Current: | |||||||||||
Non-U.S. | 56 | 28 | 19 | ||||||||
Deferred: | |||||||||||
Non-U.S. | (17) | 127 | 58 | ||||||||
Hong Kong | |||||||||||
Current: | |||||||||||
Non-U.S. | 48 | 14 | 24 | ||||||||
Deferred: | |||||||||||
Non-U.S. | (2) | 31 | 50 | ||||||||
Other | |||||||||||
Current: | |||||||||||
Non-U.S. | 308 | 359 | 333 | ||||||||
Deferred: | |||||||||||
Non-U.S. | 15 | (46) | 68 | ||||||||
Brazil | |||||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Foreign tax provisions | 82 | 125 | 62 | ||||||||
India | |||||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Foreign tax provisions | 49 | 46 | 45 | ||||||||
Canada | |||||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Foreign tax provisions | $ 36 | ||||||||||
France | |||||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Foreign tax provisions | $ 38 | 42 | |||||||||
Mexico | |||||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Foreign tax provisions | 68 | ||||||||||
Netherlands | |||||||||||
Tax provisions related to selected other non-U.S. jurisdictions | |||||||||||
Foreign tax provisions | $ 58 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Percent | |||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
U.S. state and local income taxes, net of U.S. federal income tax benefits | 1.40% | 2.20% | 1.40% |
Domestic tax credits | (1.60%) | (2.50%) | (1.50%) |
Tax exempt income | (0.10%) | (0.10%) | (0.20%) |
Non-U.S. earnings | |||
Foreign tax rate differential | (5.00%) | (3.10%) | (8.70%) |
Change in reinvestment assertion | 0.00% | 0.00% | 0.20% |
Change in foreign tax tates | 0.00% | 0.10% | 0.00% |
Tax Act enactment | 11.50% | 0.00% | 0.00% |
Employee share-based awards | (1.50%) | 0.00% | 0.00% |
Other | 0.40% | (0.80%) | (0.30%) |
Effective income tax rate | 40.10% | 30.80% | 25.90% |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | |||
Discrete tax provision as a result of the Tax Act | $ 1,201 | ||
Net discrete tax benefits primarily associated with the remeasurement of reserves and related interest | 233 | ||
Intermittent net discrete tax provision (benefits) | $ 968 | $ (68) | $ (564) |
The Tax Act | |||
Effective Income Tax Rate Reconciliation, Percent | |||
U.S. federal statutory income tax rate | 21.00% |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Gross deferred tax assets | ||
Tax credits and net operating loss carryforwards | $ 391 | $ 731 |
Employee compensation and benefit plans | 2,146 | 3,504 |
Valuation and liability allowances | 377 | 656 |
Valuation of inventory, investments and receivables | 645 | 1,062 |
Other | 0 | 21 |
Total deferred tax assets | 3,559 | 5,974 |
Deferred tax assets valuation allowance | 144 | 164 |
Deferred tax assets after valuation allowance | 3,415 | 5,810 |
Gross deferred tax liabilities | ||
Non-U.S. operations | 20 | 270 |
Fixed assets | 627 | 773 |
Other | 194 | 0 |
Total deferred tax liabilities | 841 | 1,043 |
Net deferred tax assets | $ 2,574 | 4,767 |
Deferred tax asset, tax credit carryforwards | $ 465 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Rollforward of Unrecognized Tax Benefits | |||
Balance at beginning of period | $ 1,851 | $ 1,804 | $ 2,228 |
Increases based on tax positions related to the current period | 63 | 172 | 230 |
Increases based on tax positions related to prior periods | 170 | 14 | 114 |
Decreases based on tax positions related to prior periods | (312) | (134) | (753) |
Decreases related to settlements with taxing authorities | (155) | 0 | (7) |
Decreases related to lapse of statute of limitations | (23) | (5) | (8) |
Balance at end of period | 1,594 | 1,851 | 1,804 |
Unrecognized tax benefits that , if recognized, would favorably impact the effective tax rate in future periods | 873 | 1,110 | 1,144 |
Interest Expense (Benefit) Net of Federal and State Income Tax Benefits | |||
Recognized in income statements | (3) | 28 | 18 |
Accrued at end of period | $ 147 | $ 150 | $ 122 |
Income Taxes (Earliest Tax Year
Income Taxes (Earliest Tax Year Subject to Examination in Major Tax Jurisdictions) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
United States | |
Income Tax Examination | |
Tax Year | 1,999 |
New York State and New York City | |
Income Tax Examination | |
Tax Year | 2,007 |
Hong Kong | |
Income Tax Examination | |
Tax Year | 2,011 |
U.K. | |
Income Tax Examination | |
Tax Year | 2,010 |
Japan | |
Income Tax Examination | |
Tax Year | 2,015 |
Income Taxes (Income from Conti
Income Taxes (Income from Continuing Operations Before Income Tax Expense (Benefit)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
U.S. | $ 5,686 | $ 5,694 | $ 5,360 |
Non-U.S. | 4,717 | 3,154 | 3,135 |
Income from continuing operations before income tax expense (benefit) | $ 10,403 | $ 8,848 | $ 8,495 |
Segment and Geographic Infor153
Segment and Geographic Information (Selected Financial Information by Business Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information | |||||||||||
Total non-interest revenues | $ 8,505 | $ 8,414 | $ 8,752 | $ 8,974 | $ 8,138 | $ 7,906 | $ 7,996 | $ 6,893 | $ 34,645 | $ 30,933 | $ 32,062 |
Interest income | 8,997 | 7,016 | 5,835 | ||||||||
Interest expense | 5,697 | 3,318 | 2,742 | ||||||||
Net interest | 995 | 783 | 751 | 771 | 883 | 1,003 | 913 | 899 | 3,300 | 3,698 | 3,093 |
Net revenues | 9,500 | 9,197 | 9,503 | 9,745 | 9,021 | 8,909 | 8,909 | 7,792 | 37,945 | 34,631 | 35,155 |
Income from continuing operations before income taxes | 2,471 | 2,482 | 2,642 | 2,808 | 2,246 | 2,381 | 2,483 | 1,738 | 10,403 | 8,848 | 8,495 |
Provision for income taxes | 1,810 | 697 | 846 | 815 | 566 | 749 | 833 | 578 | 4,168 | 2,726 | 2,200 |
Income from continuing operations | 661 | 1,785 | 1,796 | 1,993 | 1,680 | 1,632 | 1,650 | 1,160 | 6,235 | 6,122 | 6,295 |
Income (loss) from discontinued operations, net of income taxes | 2 | 6 | (5) | (22) | 0 | 8 | (4) | (3) | (19) | 1 | (16) |
Net income | 663 | 1,791 | 1,791 | 1,971 | 1,680 | 1,640 | 1,646 | 1,157 | 6,216 | 6,123 | 6,279 |
Net income (loss) applicable to noncontrolling interests | 20 | 10 | 34 | 41 | 14 | 43 | 64 | 23 | 105 | 144 | 152 |
Net income applicable to Morgan Stanley | $ 643 | $ 1,781 | $ 1,757 | $ 1,930 | $ 1,666 | $ 1,597 | $ 1,582 | $ 1,134 | 6,111 | 5,979 | 6,127 |
Segment Reporting Information, Additional Information | |||||||||||
Fee waivers | 86 | 91 | 197 | ||||||||
I/E | |||||||||||
Segment Reporting Information | |||||||||||
Total non-interest revenues | (294) | (290) | (213) | ||||||||
Interest income | (975) | (882) | (462) | ||||||||
Interest expense | (979) | (882) | (462) | ||||||||
Net interest | 4 | 0 | 0 | ||||||||
Net revenues | (290) | (290) | (213) | ||||||||
Income from continuing operations before income taxes | 4 | 1 | 0 | ||||||||
Provision for income taxes | 0 | 0 | 0 | ||||||||
Income from continuing operations | 4 | 1 | 0 | ||||||||
Income (loss) from discontinued operations, net of income taxes | 0 | 0 | 0 | ||||||||
Net income | 4 | 1 | 0 | ||||||||
Net income (loss) applicable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income applicable to Morgan Stanley | 4 | 1 | 0 | ||||||||
IS | |||||||||||
Segment Reporting Information | |||||||||||
Total non-interest revenues | 19,622 | 17,294 | 17,800 | ||||||||
Interest income | 5,377 | 4,005 | 3,190 | ||||||||
Interest expense | 6,186 | 3,840 | 3,037 | ||||||||
Net interest | (809) | 165 | 153 | ||||||||
Net revenues | 18,813 | 17,459 | 17,953 | ||||||||
Income from continuing operations before income taxes | 5,644 | 5,123 | 4,671 | ||||||||
Provision for income taxes | 1,993 | 1,318 | 825 | ||||||||
Income from continuing operations | 3,651 | 3,805 | 3,846 | ||||||||
Income (loss) from discontinued operations, net of income taxes | (19) | (1) | (17) | ||||||||
Net income | 3,632 | 3,804 | 3,829 | ||||||||
Net income (loss) applicable to noncontrolling interests | 96 | 155 | 133 | ||||||||
Net income applicable to Morgan Stanley | 3,536 | 3,649 | 3,696 | ||||||||
WM | |||||||||||
Segment Reporting Information | |||||||||||
Total non-interest revenues | 12,731 | 11,821 | 12,144 | ||||||||
Interest income | 4,591 | 3,888 | 3,105 | ||||||||
Interest expense | 486 | 359 | 149 | ||||||||
Net interest | 4,105 | 3,529 | 2,956 | ||||||||
Net revenues | 16,836 | 15,350 | 15,100 | ||||||||
Income from continuing operations before income taxes | 4,299 | 3,437 | 3,332 | ||||||||
Provision for income taxes | 1,974 | 1,333 | 1,247 | ||||||||
Income from continuing operations | 2,325 | 2,104 | 2,085 | ||||||||
Income (loss) from discontinued operations, net of income taxes | 0 | 0 | 0 | ||||||||
Net income | 2,325 | 2,104 | 2,085 | ||||||||
Net income (loss) applicable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income applicable to Morgan Stanley | 2,325 | 2,104 | 2,085 | ||||||||
IM | |||||||||||
Segment Reporting Information | |||||||||||
Total non-interest revenues | 2,586 | 2,108 | 2,331 | ||||||||
Interest income | 4 | 5 | 2 | ||||||||
Interest expense | 4 | 1 | 18 | ||||||||
Net interest | 0 | 4 | (16) | ||||||||
Net revenues | 2,586 | 2,112 | 2,315 | ||||||||
Income from continuing operations before income taxes | 456 | 287 | 492 | ||||||||
Provision for income taxes | 201 | 75 | 128 | ||||||||
Income from continuing operations | 255 | 212 | 364 | ||||||||
Income (loss) from discontinued operations, net of income taxes | 0 | 2 | 1 | ||||||||
Net income | 255 | 214 | 365 | ||||||||
Net income (loss) applicable to noncontrolling interests | 9 | (11) | 19 | ||||||||
Net income applicable to Morgan Stanley | $ 246 | $ 225 | $ 346 |
Segment and Geographic Infor154
Segment and Geographic Information (Net Unrealized Performance-based Fees) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting [Abstract] | ||
Net cumulative unrealized performance-based fees at risk of reversing | $ 442 | $ 397 |
Segment and Geographic Infor155
Segment and Geographic Information (Net Discrete Tax Provision (Benefit) by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information | ||||||||
Intermittent: Tax Act | $ 1,201 | |||||||
Intermittent: Remeasurement of reserves and related interest | $ (168) | $ (135) | (168) | |||||
Intermittent: Other | (65) | |||||||
Total intermittent net discrete tax provision (benefits) | 968 | $ (68) | $ (564) | |||||
Recurring: Employee share-based awards | $ (16) | $ (11) | $ (16) | $ (112) | (155) | |||
Total | 813 | |||||||
IS | ||||||||
Segment Reporting Information | ||||||||
Intermittent: Tax Act | 705 | |||||||
Intermittent: Remeasurement of reserves and related interest | (168) | |||||||
Intermittent: Other | (66) | |||||||
Total intermittent net discrete tax provision (benefits) | 471 | |||||||
Recurring: Employee share-based awards | (93) | |||||||
Total | 378 | |||||||
WM | ||||||||
Segment Reporting Information | ||||||||
Intermittent: Tax Act | 402 | |||||||
Intermittent: Remeasurement of reserves and related interest | 0 | |||||||
Intermittent: Other | 9 | |||||||
Total intermittent net discrete tax provision (benefits) | 411 | |||||||
Recurring: Employee share-based awards | (54) | |||||||
Total | 357 | |||||||
IM | ||||||||
Segment Reporting Information | ||||||||
Intermittent: Tax Act | 94 | |||||||
Intermittent: Remeasurement of reserves and related interest | 0 | |||||||
Intermittent: Other | (8) | |||||||
Total intermittent net discrete tax provision (benefits) | 86 | |||||||
Recurring: Employee share-based awards | (8) | |||||||
Total | $ 78 |
Segment and Geographic Infor156
Segment and Geographic Information (Assets by Business Segment) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information | ||
Assets | $ 851,733 | $ 814,949 |
Institutional Securities | ||
Segment Reporting Information | ||
Assets | 664,974 | 629,149 |
Wealth Management | ||
Segment Reporting Information | ||
Assets | 182,009 | 181,135 |
Investment Management | ||
Segment Reporting Information | ||
Assets | $ 4,750 | $ 4,665 |
Segment and Geographic Infor157
Segment and Geographic Information (Net Revenues by Region) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information | |||||||||||
Net revenues | $ 9,500 | $ 9,197 | $ 9,503 | $ 9,745 | $ 9,021 | $ 8,909 | $ 8,909 | $ 7,792 | $ 37,945 | $ 34,631 | $ 35,155 |
Americas | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 27,817 | 25,487 | 25,080 | ||||||||
EMEA | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 5,714 | 4,994 | 5,353 | ||||||||
Asia | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 4,414 | $ 4,150 | $ 4,722 |
Segment and Geographic Infor158
Segment and Geographic Information (Total Assets by Region) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information | ||
Assets | $ 851,733 | $ 814,949 |
Americas | ||
Segment Reporting Information | ||
Assets | 570,489 | 581,750 |
EMEA | ||
Segment Reporting Information | ||
Assets | 191,398 | 158,819 |
Asia | ||
Segment Reporting Information | ||
Assets | $ 89,846 | $ 74,380 |
Parent Company (Condensed Incom
Parent Company (Condensed Income Statements and Comprehensive Income Statements) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||||||||||
Investment banking | $ 6,003 | $ 4,933 | $ 5,594 | ||||||||
Trading | 11,116 | 10,209 | 10,114 | ||||||||
Other | 848 | 825 | 493 | ||||||||
Total non-interest revenues | $ 8,505 | $ 8,414 | $ 8,752 | $ 8,974 | $ 8,138 | $ 7,906 | $ 7,996 | $ 6,893 | 34,645 | 30,933 | 32,062 |
Interest income | 8,997 | 7,016 | 5,835 | ||||||||
Interest expense | 5,697 | 3,318 | 2,742 | ||||||||
Net interest | 995 | 783 | 751 | 771 | 883 | 1,003 | 913 | 899 | 3,300 | 3,698 | 3,093 |
Net revenues | 9,500 | 9,197 | 9,503 | 9,745 | 9,021 | 8,909 | 8,909 | 7,792 | 37,945 | 34,631 | 35,155 |
Income before income taxes | 10,403 | 8,848 | 8,495 | ||||||||
Provision for (benefit from) income taxes | 1,810 | 697 | 846 | 815 | 566 | 749 | 833 | 578 | 4,168 | 2,726 | 2,200 |
Net income | 663 | 1,791 | 1,791 | 1,971 | 1,680 | 1,640 | 1,646 | 1,157 | 6,216 | 6,123 | 6,279 |
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments | 251 | (11) | (304) | ||||||||
Change in net DVA | (588) | (296) | 0 | ||||||||
Comprehensive income | 5,803 | 5,447 | 5,867 | ||||||||
Preferred stock dividends and other | 170 | 93 | 170 | 90 | 156 | 79 | 157 | 79 | 523 | 471 | 456 |
Earnings applicable to Morgan Stanley common shareholders | $ 473 | $ 1,688 | $ 1,587 | $ 1,840 | $ 1,510 | $ 1,518 | $ 1,425 | $ 1,055 | 5,588 | 5,508 | 5,671 |
Parent Company | |||||||||||
Revenues | |||||||||||
Dividends from non-bank subsidiaries | 2,567 | 2,448 | 4,942 | ||||||||
Investment banking | 0 | 0 | 0 | ||||||||
Trading | (260) | 96 | 574 | ||||||||
Other | 64 | 38 | 53 | ||||||||
Total non-interest revenues | 2,371 | 2,582 | 5,569 | ||||||||
Interest income | 3,783 | 3,008 | 3,055 | ||||||||
Interest expense | 4,079 | 4,036 | 4,073 | ||||||||
Net interest | (296) | (1,028) | (1,018) | ||||||||
Net revenues | 2,075 | 1,554 | 4,551 | ||||||||
Non-interest expenses | 240 | 126 | (195) | ||||||||
Income before income taxes | 1,835 | 1,428 | 4,746 | ||||||||
Provision for (benefit from) income taxes | (206) | (383) | (83) | ||||||||
Net income before undistributed gain of subsidiaries | 2,041 | 1,811 | 4,829 | ||||||||
Undistributed gain of subsidiaries | 4,070 | 4,168 | 1,298 | ||||||||
Net income | 6,111 | 5,979 | 6,127 | ||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments | 219 | (23) | (300) | ||||||||
Change in net unrealized gains (losses) on AFS securities | 41 | (269) | (246) | ||||||||
Pensions, postretirement and other | (117) | (100) | 138 | ||||||||
Change in net DVA | (560) | (283) | 0 | ||||||||
Comprehensive income | 5,694 | 5,304 | 5,719 | ||||||||
Preferred stock dividends and other | 523 | 471 | 456 | ||||||||
Earnings applicable to Morgan Stanley common shareholders | $ 5,588 | $ 5,508 | $ 5,671 |
Parent Company (Condensed Balan
Parent Company (Condensed Balance Sheets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents: | ||||
Cash and due from banks | $ 24,816 | $ 22,017 | $ 19,827 | |
Restricted cash | 34,231 | 33,979 | 31,469 | |
Trading assets at fair value | 298,282 | 262,154 | ||
Investment securities at fair value | 55,203 | 63,170 | ||
Equity investment in subsidiaries: | ||||
Other assets | 16,628 | 18,146 | ||
Total assets | 851,733 | 814,949 | ||
Liabilities | ||||
Trading liabilities at fair value | 131,295 | 128,194 | ||
Securities sold under agreements to repurchase | 56,424 | 54,628 | ||
Other liabilities and accrued expenses | 17,157 | 15,896 | ||
Borrowings | 192,582 | 165,716 | ||
Total liabilities | 773,267 | 737,772 | ||
Commitments and contingent liabilities | ||||
Equity | ||||
Preferred stock | 8,520 | 7,520 | ||
Common stock, $0.01 par value: Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,788,086,805 and 1,852,481,601 | 20 | 20 | ||
Additional paid-in capital | 23,545 | 23,271 | ||
Retained earnings | 57,577 | 53,679 | ||
Employee stock trusts | 2,907 | 2,851 | ||
AOCI | (3,060) | (2,643) | ||
Common stock held in treasury at cost, $0.01 par value (250,807,174 and 186,412,378 shares) | (9,211) | (5,797) | ||
Common stock issued to employee stock trusts | (2,907) | (2,851) | ||
Total shareholders' equity | 78,466 | 77,177 | 76,184 | $ 72,104 |
Total liabilities and equity | 851,733 | 814,949 | ||
Parent Company | ||||
Cash and cash equivalents: | ||||
Cash and due from banks | 11 | 116 | 5,166 | |
Deposits with banking subsidiaries | 8,120 | 3,600 | 4,311 | |
Restricted cash | 1 | 3 | $ 3 | |
Trading assets at fair value | 5,752 | 139 | ||
Investment securities at fair value | 19,268 | 0 | ||
Securities purchased under agreement to resell with affiliates | 38,592 | 57,906 | ||
Advances to subsidiaries: | ||||
Bank and BHC | 30,145 | 28,186 | ||
Non-bank | 112,557 | 95,684 | ||
Equity investment in subsidiaries: | ||||
Bank and BHC | 35,971 | 34,329 | ||
Non-bank | 31,856 | 31,246 | ||
Other assets | 2,704 | 4,613 | ||
Total assets | 284,977 | 255,822 | ||
Liabilities | ||||
Trading liabilities at fair value | 148 | 49 | ||
Securities sold under agreements to repurchase | 8,753 | 0 | ||
Payables to subsidiaries | 28,781 | 26,957 | ||
Other liabilities and accrued expenses | 2,421 | 2,040 | ||
Borrowings | 167,483 | 150,726 | ||
Total liabilities | 207,586 | 179,772 | ||
Commitments and contingent liabilities | ||||
Equity | ||||
Preferred stock | 8,520 | 7,520 | ||
Common stock, $0.01 par value: Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,788,086,805 and 1,852,481,601 | 20 | 20 | ||
Additional paid-in capital | 23,545 | 23,271 | ||
Retained earnings | 57,577 | 53,679 | ||
Employee stock trusts | 2,907 | 2,851 | ||
AOCI | (3,060) | (2,643) | ||
Common stock held in treasury at cost, $0.01 par value (250,807,174 and 186,412,378 shares) | (9,211) | (5,797) | ||
Common stock issued to employee stock trusts | (2,907) | (2,851) | ||
Total shareholders' equity | 77,391 | 76,050 | ||
Total liabilities and equity | $ 284,977 | $ 255,822 |
Parent Company (Condensed Cash
Parent Company (Condensed Cash Flow Statements) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||||||||||
Net income | $ 663 | $ 1,791 | $ 1,791 | $ 1,971 | $ 1,680 | $ 1,640 | $ 1,646 | $ 1,157 | $ 6,216 | $ 6,123 | $ 6,279 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||||||
Other operating activities | 63 | (199) | 322 | ||||||||
Net cash provided by (used for) operating activities | (4,505) | 5,383 | (4,463) | ||||||||
Cash flows from investing activities | |||||||||||
Purchases | (23,962) | (50,911) | (47,291) | ||||||||
Proceeds from sales | 18,131 | 33,716 | 37,926 | ||||||||
Proceeds from paydowns and maturities | 7,445 | 8,367 | 5,663 | ||||||||
Net cash provided by (used for) investing activities | (12,391) | (19,508) | (19,995) | ||||||||
Cash flows from financing activities | |||||||||||
Issuance of preferred stock, net of issuance costs | 994 | 0 | 1,493 | ||||||||
Issuance of Borrowings | 55,416 | 43,626 | 34,182 | ||||||||
Borrowings | (35,825) | (31,596) | (27,377) | ||||||||
Repurchases of common stock and employee tax withholdings | (4,292) | (3,933) | (2,773) | ||||||||
Cash dividends | (2,085) | (1,746) | (1,455) | ||||||||
Other financing activities | 136 | 66 | 0 | ||||||||
Net cash provided by (used for) financing activities | 16,261 | 7,363 | 24,154 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 3,670 | (1,430) | (1,735) | ||||||||
Net increase (decrease) in cash and cash equivalents | 3,035 | (8,192) | (2,039) | ||||||||
Cash and cash equivalents, at beginning of period | 77,360 | 85,552 | 77,360 | 85,552 | 87,591 | ||||||
Cash and cash equivalents, at end of period | 80,395 | 77,360 | 80,395 | 77,360 | 85,552 | ||||||
Cash and cash equivalents: | |||||||||||
Cash and due from banks | 24,816 | 22,017 | 24,816 | 22,017 | 19,827 | ||||||
Interest bearing deposits with banks | 21,348 | 21,364 | 21,348 | 21,364 | 34,256 | ||||||
Restricted cash | 34,231 | 33,979 | 34,231 | 33,979 | 31,469 | ||||||
Cash and cash equivalents, at end of period | 80,395 | 77,360 | 80,395 | 77,360 | 85,552 | ||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||
Cash payments for interest | 5,377 | 2,834 | 2,672 | ||||||||
Cash payments for income taxes, net of refunds | 1,390 | 831 | 677 | ||||||||
Parent Company | |||||||||||
Cash flows from operating activities | |||||||||||
Net income | 6,111 | 5,979 | 6,127 | ||||||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||||||
Undistributed gain of subsidiaries | (4,070) | (4,168) | (1,298) | ||||||||
Other operating activities | 1,087 | 1,367 | 1,084 | ||||||||
Changes in assets and liabilities | 619 | (151) | (2,984) | ||||||||
Net cash provided by (used for) operating activities | 3,747 | 3,027 | 2,929 | ||||||||
Cash flows from investing activities | |||||||||||
Purchases | (5,263) | 0 | 0 | ||||||||
Proceeds from sales | 3,620 | 0 | 0 | ||||||||
Proceeds from paydowns and maturities | 1,038 | 0 | 0 | ||||||||
Securities purchased under agreement to resell with affiliate | 19,314 | (10,846) | (5,459) | ||||||||
Securities sold under agreements to repurchase with affiliates | 8,753 | 0 | 0 | ||||||||
Advances to and investments in subsidiaries | (33,825) | (2,502) | 1,364 | ||||||||
Net cash provided by (used for) investing activities | (6,363) | (13,348) | (4,095) | ||||||||
Cash flows from financing activities | |||||||||||
Issuance of preferred stock, net of issuance costs | 994 | 0 | 1,493 | ||||||||
Issuance of Borrowings | 36,833 | 32,795 | 28,575 | ||||||||
Borrowings | (24,668) | (24,793) | (23,458) | ||||||||
Repurchases of common stock and employee tax withholdings | (4,292) | (3,933) | (2,773) | ||||||||
Cash dividends | (2,085) | (1,746) | (1,455) | ||||||||
Other financing activities | 26 | 66 | 0 | ||||||||
Net cash provided by (used for) financing activities | 6,808 | 2,389 | 2,382 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 221 | (250) | (65) | ||||||||
Net increase (decrease) in cash and cash equivalents | 4,413 | (8,182) | 1,151 | ||||||||
Cash and cash equivalents, at beginning of period | $ 3,719 | $ 11,901 | 3,719 | 11,901 | 10,750 | ||||||
Cash and cash equivalents, at end of period | 8,132 | 3,719 | 8,132 | 3,719 | 11,901 | ||||||
Cash and cash equivalents: | |||||||||||
Cash and due from banks | 11 | 116 | 11 | 116 | 5,166 | ||||||
Deposits with banking subsidiaries | 8,120 | 3,600 | 8,120 | 3,600 | 4,311 | ||||||
Interest bearing deposits with banks | 0 | 0 | 0 | 0 | 2,421 | ||||||
Restricted cash | 1 | 3 | 1 | 3 | 3 | ||||||
Cash and cash equivalents, at end of period | $ 8,132 | $ 3,719 | 8,132 | 3,719 | 11,901 | ||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||
Cash payments for interest | 3,570 | 3,650 | 3,959 | ||||||||
Cash payments for income taxes, net of refunds | $ 201 | $ 201 | $ 255 |
Parent Company (Long-Term Borro
Parent Company (Long-Term Borrowings) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term Borrowings | ||
Senior | $ 180,835 | $ 154,472 |
Subordinated | 10,228 | 10,303 |
Total | 191,063 | 164,775 |
Parent Company | ||
Long-term Borrowings | ||
Senior | 157,255 | 140,422 |
Subordinated | 10,228 | 10,303 |
Total | $ 167,483 | $ 150,725 |
Parent Company (Guarantees) (De
Parent Company (Guarantees) (Details) - Parent Company - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instuments and Warrants | ||
Condensed Financial Statement | ||
Aggregate balance | $ 19,392 | $ 11,538 |
Subsidiary Lease Obligations | ||
Condensed Financial Statement | ||
Aggregate balance | $ 1,082 | $ 1,090 |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Results | |||||||||||
Total non-interest revenues | $ 8,505 | $ 8,414 | $ 8,752 | $ 8,974 | $ 8,138 | $ 7,906 | $ 7,996 | $ 6,893 | $ 34,645 | $ 30,933 | $ 32,062 |
Net interest | 995 | 783 | 751 | 771 | 883 | 1,003 | 913 | 899 | 3,300 | 3,698 | 3,093 |
Net revenues | 9,500 | 9,197 | 9,503 | 9,745 | 9,021 | 8,909 | 8,909 | 7,792 | 37,945 | 34,631 | 35,155 |
Total non-interest expenses | 7,029 | 6,715 | 6,861 | 6,937 | 6,775 | 6,528 | 6,426 | 6,054 | 27,542 | 25,783 | 26,660 |
Income from continuing operations before income taxes | 2,471 | 2,482 | 2,642 | 2,808 | 2,246 | 2,381 | 2,483 | 1,738 | 10,403 | 8,848 | 8,495 |
Provision for income taxes | 1,810 | 697 | 846 | 815 | 566 | 749 | 833 | 578 | 4,168 | 2,726 | 2,200 |
Income from continuing operations | 661 | 1,785 | 1,796 | 1,993 | 1,680 | 1,632 | 1,650 | 1,160 | 6,235 | 6,122 | 6,295 |
Income (loss) from discontinued operations | 2 | 6 | (5) | (22) | 0 | 8 | (4) | (3) | (19) | 1 | (16) |
Net income | 663 | 1,791 | 1,791 | 1,971 | 1,680 | 1,640 | 1,646 | 1,157 | 6,216 | 6,123 | 6,279 |
Net income applicable to noncontrolling interests | 20 | 10 | 34 | 41 | 14 | 43 | 64 | 23 | 105 | 144 | 152 |
Net income applicable to Morgan Stanley | 643 | 1,781 | 1,757 | 1,930 | 1,666 | 1,597 | 1,582 | 1,134 | 6,111 | 5,979 | 6,127 |
Preferred stock dividends and other | 170 | 93 | 170 | 90 | 156 | 79 | 157 | 79 | 523 | 471 | 456 |
Earnings applicable to Morgan Stanley common shareholders | $ 473 | $ 1,688 | $ 1,587 | $ 1,840 | $ 1,510 | $ 1,518 | $ 1,425 | $ 1,055 | $ 5,588 | $ 5,508 | $ 5,671 |
Earnings (loss) per basic common share: | |||||||||||
Income from continuing operations | $ 0.27 | $ 0.95 | $ 0.89 | $ 1.03 | $ 0.84 | $ 0.82 | $ 0.77 | $ 0.56 | $ 3.15 | $ 2.98 | $ 2.98 |
Income (loss) from discontinued operations | 0 | 0 | 0 | (0.01) | 0 | 0.01 | (0.01) | 0 | (0.01) | 0 | (0.01) |
Earnings per basic common share | 0.27 | 0.95 | 0.89 | 1.02 | 0.84 | 0.83 | 0.76 | 0.56 | 3.14 | 2.98 | 2.97 |
Earnings (loss) per diluted common share: | |||||||||||
Income from continuing operations | 0.26 | 0.93 | 0.87 | 1.01 | 0.81 | 0.8 | 0.75 | 0.55 | 3.08 | 2.92 | 2.91 |
Income (loss) from discontinued operations | 0 | 0 | 0 | (0.01) | 0 | 0.01 | 0 | 0 | (0.01) | 0 | (0.01) |
Earnings per diluted common share | 0.26 | 0.93 | 0.87 | 1 | 0.81 | 0.81 | 0.75 | 0.55 | 3.07 | 2.92 | 2.9 |
Dividends declared per common share | 0.25 | 0.25 | 0.2 | 0.2 | 0.2 | 0.2 | 0.15 | 0.15 | $ 0.9 | $ 0.7 | $ 0.55 |
Book value per common share | $ 38.52 | $ 38.87 | $ 38.22 | $ 37.48 | $ 36.99 | $ 37.11 | $ 36.29 | $ 35.34 |
Quarterly Results (Unaudited165
Quarterly Results (Unaudited) (Subnote) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Net intermittent discrete tax provision | $ 1,201 | ||
Net intermittent discrete tax benefits, primarily related to the remeasurement of reserves and related interest | $ 168 | $ 135 | 168 |
Impairment of equity method investment | 53 | ||
Wealth Management | |||
Net intermittent discrete tax provision | 402 | ||
Net intermittent discrete tax benefits, primarily related to the remeasurement of reserves and related interest | 0 | ||
Provision related to certain brokerage service reporting activities | 70 | ||
Investment Management | |||
Net intermittent discrete tax provision | 94 | ||
Net intermittent discrete tax benefits, primarily related to the remeasurement of reserves and related interest | $ 0 | ||
Impairment of equity method investment | $ 53 | ||
Losses on sales and markdowns of limited partnership investments | $ 60 |
Quarterly Results (Unaudited166
Quarterly Results (Unaudited) (Employee Share-Based Awards) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | |
Quarterly Results | |||||
Discrete tax benefit related to employee share-based awards | $ 16 | $ 11 | $ 16 | $ 112 | $ 155 |