v3.26.1
Derivatives and Hedging Activities
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities
Derivatives and Hedging Activities
Derivative Activities
Derivatives are instruments that derive their value from underlying asset prices, indices, reference rates and other inputs, or a combination of these factors. Derivatives may be traded on an exchange (exchange-traded) or they may be privately negotiated contracts, which are usually referred to as OTC derivatives. Certain of the firm’s OTC derivatives are cleared and settled through central clearing counterparties (OTC-cleared), while others are bilateral contracts between two counterparties (bilateral OTC).
Market Making. As a market maker, the firm enters into derivative transactions to provide liquidity to clients and to facilitate the transfer and hedging of their risks. In this role, the firm typically acts as principal and is required to commit capital to provide execution, and maintains market-making positions in response to, or in anticipation of, client demand.
Risk Management. The firm also enters into derivatives to actively manage risk exposures that arise from its market-making and investing and financing activities. The firm’s holdings and exposures are hedged, in many cases, on either a portfolio or risk-specific basis, as opposed to an instrument-by-instrument basis. The offsetting impact of this economic hedging is reflected in the same business segment as the related revenues. In addition, the firm may enter into derivatives designated as hedges under U.S. GAAP. These derivatives are used to manage interest rate exposure of certain fixed-rate unsecured borrowings and deposits and certain U.S. and non-U.S. government securities classified as available-for-sale, foreign exchange risk of certain available-for-sale securities, the net investment in certain non-U.S. operations and the exposure to the variability of the forecasted cash flows associated with certain floating-rate assets.


The firm enters into various types of derivatives, including:
•Futures and Forwards. Contracts that commit counterparties to purchase or sell financial instruments, commodities or currencies in the future.
•Swaps. Contracts that require counterparties to exchange cash flows, such as currency or interest payment streams. The amounts exchanged are based on the specific terms of the contract with reference to specified rates, financial instruments, commodities, currencies or indices.
•Options. Contracts in which the option purchaser has the right, but not the obligation, to purchase from or sell to the option writer financial instruments, commodities or currencies within a defined time period for a specified price.
Derivatives are reported on a net-by-counterparty basis (i.e., the net payable or receivable for derivative assets and liabilities for a given counterparty) when a legal right of setoff exists under an enforceable netting agreement (counterparty netting). Derivatives are accounted for at fair value, net of cash collateral received or posted under enforceable credit support agreements (cash collateral netting). Derivative assets are included in trading assets and derivative liabilities are included in trading liabilities. Realized and unrealized gains and losses on derivatives not designated as hedges are included in market making (for derivatives included in Fixed Income, Currency and Commodities (FICC) and Equities within Global Banking & Markets), and other principal transactions (for derivatives included in Investment banking fees and Other within Global Banking & Markets, as well as derivatives in Asset & Wealth Management) in the consolidated statements of earnings. For both the three months ended March 2026 and March 2025, substantially all of the firm’s derivatives were included in Global Banking & Markets.
The tables below present the gross fair value and the notional amounts of derivative contracts by major product type, the amounts of counterparty and cash collateral netting in the consolidated balance sheets, as well as cash and securities collateral posted and received under enforceable credit support agreements that do not meet the criteria for netting under U.S. GAAP.
Fair Value as of
MarchDecember
 20262025
$ in millionsDerivative
 Assets 		Derivative
 Liabilities 		Derivative
 Assets 		Derivative
 Liabilities
Not accounted for as hedges
Exchange-traded$2,215 $1,680 $2,976 $1,217 
OTC-cleared11,467 11,654 4,961 4,854 
Bilateral OTC152,947 115,138 153,595 116,061 
Total interest rates166,629 128,472 161,532 122,132 
OTC-cleared4,843 5,091 2,684 2,973 
Bilateral OTC11,875 11,612 11,091 11,162 
Total credit16,718 16,703 13,775 14,135 
Exchange-traded120 25 126 14 
OTC-cleared2,230 2,422 1,210 1,064 
Bilateral OTC93,400 93,309 78,403 82,468 
Total currencies95,750 95,756 79,739 83,546 
Exchange-traded7,977 8,252 8,597 8,788 
OTC-cleared443 462 640 804 
Bilateral OTC16,235 16,330 7,863 9,924 
Total commodities24,655 25,044 17,100 19,516 
Exchange-traded56,617 93,687 53,564 91,084 
OTC-cleared152 191 33 55 
Bilateral OTC51,608 77,061 34,101 60,422 
Total equities108,377 170,939 87,698 151,561 
Subtotal412,129 436,914 359,844 390,890 
Accounted for as hedges    
OTC-cleared35 84 17 49 
Bilateral OTC154 8 164 7 
Total interest rates189 92 181 56 
OTC-cleared19 60 30 5 
Bilateral OTC253 10 25 263 
Total currencies272 70 55 268 
Subtotal461 162 236 324 
Total gross fair value$412,590 $437,076 $360,080 $391,214 
Offset in the consolidated balance sheets
Exchange-traded$(59,904)$(59,904)$(58,701)$(58,701)
OTC-cleared(18,310)(18,310)(8,925)(8,925)
Bilateral OTC(222,318)(222,318)(193,549)(193,549)
Counterparty netting(300,532)(300,532)(261,175)(261,175)
OTC-cleared(88)(438)(109)(424)
Bilateral OTC(47,918)(45,906)(45,843)(45,210)
Cash collateral netting(48,006)(46,344)(45,952)(45,634)
Total amounts offset$(348,538)$(346,876)$(307,127)$(306,809)
Included in the consolidated balance sheets  
Exchange-traded$7,025 $43,740 $6,562 $42,402 
OTC-cleared791 1,216 541 455 
Bilateral OTC56,236 45,244 45,850 41,548 
Total$64,052 $90,200 $52,953 $84,405 
Not offset in the consolidated balance sheets
 
Cash collateral$(628)$(2,660)$(442)$(1,951)
Securities collateral(21,874)(8,987)(20,965)(8,910)
Total$41,550 $78,553 $31,546 $73,544 
 
Notional Amounts as of
MarchDecember
$ in millions20262025
Not accounted for as hedges
Exchange-traded$2,222,633 $1,983,652 
OTC-cleared21,261,613 16,533,168 
Bilateral OTC11,172,196 10,705,896 
Total interest rates34,656,442 29,222,716 
Exchange-traded303 332 
OTC-cleared1,328,447 986,680 
Bilateral OTC950,559 758,385 
Total credit2,279,309 1,745,397 
Exchange-traded11,090 9,555 
OTC-cleared777,835 523,741 
Bilateral OTC7,991,472 7,192,306 
Total currencies8,780,397 7,725,602 
Exchange-traded406,975 366,003 
OTC-cleared2,366 2,710 
Bilateral OTC241,732 186,420 
Total commodities651,073 555,133 
Exchange-traded2,677,454 2,327,060 
OTC-cleared1,136 1,062 
Bilateral OTC1,820,284 1,634,183 
Total equities4,498,874 3,962,305 
Subtotal50,866,095 43,211,153 
Accounted for as hedges
OTC-cleared373,097 294,278 
Bilateral OTC1,041 1,157 
Total interest rates374,138 295,435 
OTC-cleared6,358 6,105 
Bilateral OTC15,236 18,188 
Total currencies21,594 24,293 
Subtotal395,732 319,728 
Total notional amounts$51,261,827 $43,530,881 
In the tables above:
•Gross fair values exclude the effects of both counterparty netting and collateral, and therefore are not representative of the firm’s exposure.
•Amounts presented for collateral not offset in the consolidated balance sheets consists of collateral received or posted in connection with OTC-cleared and bilateral OTC derivatives under enforceable credit support agreements that do not meet the criteria for netting under U.S. GAAP. In addition to collateral presented in the table above, the firm also posts or receives collateral in connection with its transactions with certain exchanges in accordance with the exchanges’ margin requirements. Such collateral may be calculated based on the firm’s total exposure to the respective exchange across all product types, including both derivative and non-derivative instruments. See Note 11 for further information.
•Substantially all of the gross fair value of derivatives relates to derivative contracts which are subject to enforceable netting agreements.
•Notional amounts, which represent the sum of gross long and short derivative contracts, provide an indication of the volume of the firm’s derivative activity and do not represent anticipated losses.

See Note 4 for an overview of the firm’s fair value measurement policies, valuation techniques and significant inputs used to determine the fair value of derivatives, and Note 5 for further information about derivatives within the fair value hierarchy.
Credit Derivatives
The firm enters into a broad array of credit derivatives to facilitate client transactions and to manage the credit risk associated with market-making and investing and financing activities. Credit derivatives are actively managed based on the firm’s net risk position. Credit derivatives are generally individually negotiated contracts and can have various settlement and payment conventions. Credit events include failure to pay, bankruptcy, acceleration of indebtedness, restructuring, repudiation and dissolution of the reference entity.
The firm enters into the following types of credit derivatives:
•Credit Default Swaps. Credit default swaps include single-name credit default swaps, as well as those that reference a basket of single-name credit default swaps or a broad-based index. Credit default swaps protect the buyer against the loss of principal on one or more bonds, loans or mortgages (reference obligations). The buyer of protection pays an initial or periodic premium to the seller and receives protection for the period of the contract. If there is no credit event, as defined in the contract, the seller of protection makes no payments to the buyer. If a credit event occurs in one of the underlying reference obligations, the protection seller pays the protection buyer. For credit default swaps referencing credit indices or baskets, the payment is typically a pro-rata portion of the transaction’s total notional amount based on the underlying defaulted reference obligation. In certain transactions, the credit risk of a basket or index is separated into various tranches, each having different levels of subordination. The most junior tranches cover initial defaults and once losses exceed the notional amount of these junior tranches, any excess loss is covered by the next most senior tranche.











•Credit Options. In a credit option, the option writer assumes the obligation to purchase or sell a reference obligation at a specified price or credit spread. The option purchaser buys the right, but does not assume the obligation, to sell the reference obligation to, or purchase it from, the option writer. The payments on credit options depend either on a particular credit spread or the price of the reference obligation.
•Total Return Swaps. A total return swap transfers the risks relating to economic performance of a reference obligation from the protection buyer to the protection seller. Typically, the protection buyer receives a floating rate of interest and protection against any reduction in fair value of the reference obligation, and the protection seller receives the cash flows associated with the reference obligation, plus any increase in the fair value of the reference obligation.
The firm economically hedges its exposure to written credit derivatives primarily by entering into offsetting purchased credit derivatives with identical underliers. Substantially all of the firm’s purchased credit derivative transactions are with financial institutions and are subject to stringent collateral thresholds. In addition, upon the occurrence of a specified trigger event, the firm may take possession of the reference obligations underlying a particular written credit derivative, and consequently may, upon liquidation of the reference obligations, recover amounts on the underlying reference obligations in the event of default.




The table below presents information about credit derivatives.
 
Credit Rating of Underlier
$ in millionsInvestment-GradeNon-Investment- Grade/UnratedTotal
As of March 2026  
Maximum Payout/Notional Amount of Written Credit Derivatives
By Product
Credit default swaps$684,455 $186,304 $870,759 
Other credit derivatives188,224 41,438 229,662 
Total by product$872,679 $227,742 $1,100,421 
By Maturity
Less than 1 year$240,424 $48,340 $288,764 
1 - 5 years487,719 138,101 625,820 
Greater than 5 years144,536 41,301 185,837 
Total by maturity$872,679 $227,742 $1,100,421 
Maximum Payout/Notional Amount of Purchased Credit Derivatives
Offsetting$749,482 $189,173 $938,655 
Other185,453 54,780 240,233 
Total$934,935 $243,953 $1,178,888 
Fair Value of Written Credit Derivatives
Asset$6,942 $4,638 $11,580 
Liability1,631 3,111 4,742 
Net asset/(liability)$5,311 $1,527 $6,838 
As of December 2025   
Maximum Payout/Notional Amount of Written Credit Derivatives
By Product
Credit default swaps$536,846 $124,330 $661,176 
Other credit derivatives135,770 33,097 168,867 
Total by product$672,616 $157,427 $830,043 
By Maturity
Less than 1 year$184,830 $37,484 $222,314 
1 - 5 years447,318 109,387 556,705 
Greater than 5 years40,468 10,556 51,024 
Total by maturity
$672,616 $157,427 $830,043 
Maximum Payout/Notional Amount of Purchased Credit Derivatives
Offsetting$549,513 $127,807 $677,320 
Other188,117 49,917 238,034 
Total$737,630 $177,724 $915,354 
Fair Value of Written Credit Derivatives
Asset$6,169 $4,040 $10,209 
Liability1,345 2,153 3,498 
Net asset/(liability)$4,824 $1,887 $6,711 
In the table above:
•Tenor is based on the remaining contractual maturity.
•Credit ratings are based on external credit ratings issued by credit rating agencies or internally determined credit agency equivalents where external credit ratings are not available.
•The credit rating of the underlier, together with the tenor of the contract, are indicators of payment/performance risk. The occurrence of a credit event is less likely where the derivative contract is investment-grade and the tenor is shorter.


•Offsetting purchased credit derivatives represent the notional amount of purchased credit derivatives that economically hedge written credit derivatives with identical underliers.
•Other purchased credit derivatives represent the notional amount of all other purchased credit derivatives not included in offsetting.
•Fair values exclude the effects of both netting of receivable balances with payable balances under enforceable netting agreements, and netting of cash received or posted under enforceable credit support agreements, and therefore are not representative of the firm’s credit exposure.
Impact of Credit and Funding Spreads on Derivatives
The firm realizes gains or losses on its derivative contracts. These gains or losses include credit valuation adjustments (CVAs) relating to uncollateralized derivative assets and liabilities, which represent the gains or losses (including hedges) attributable to the impact of changes in credit exposure, counterparty credit spreads, liability funding spreads (which include the firm’s own credit), probability of default and assumed recovery. These gains or losses also include funding valuation adjustments (FVAs) relating to uncollateralized derivative assets, which represent the gains or losses (including hedges) attributable to the impact of changes in expected funding exposures and funding spreads.
The table below presents information about CVA and FVA.
Three Months
Ended March
$ in millions20262025
CVA, net of hedges$153 $139 
FVA, net of hedges(90)(2)
Total$63 $137 
Bifurcated Embedded Derivatives
The table below presents the fair value and the notional amount of derivatives that have been bifurcated from their related borrowings.
 
As of
MarchDecember
$ in millions20262025
Fair value of assets$431 $428 
Fair value of liabilities(181)(304)
Net asset/(liability)$250 $124 
 
Notional amount
$8,509 $8,691 
In the table above, derivatives that have been bifurcated from their related borrowings are recorded at fair value and the vast majority of such derivatives consist of interest rate and commodity products. These derivatives are included in unsecured short- and long-term borrowings, as well as other secured financings, with the related borrowings.

Derivatives with Credit-Related Contingent Features
Certain of the firm’s derivatives have been transacted under bilateral agreements with counterparties who may require the firm to post collateral or terminate the transactions based on changes in the firm’s credit ratings. The firm assesses the impact of these bilateral agreements by determining the collateral or termination payments that would occur assuming a downgrade by all rating agencies. A downgrade by any one rating agency, depending on the agency’s relative ratings of the firm at the time of the downgrade, may have an impact which is comparable to the impact of a downgrade by all rating agencies.
The table below presents information about net derivative liabilities under bilateral agreements (excluding collateral posted), the fair value of collateral posted and additional collateral or termination payments that could have been called by counterparties in the event of a one- or two-notch downgrade in the firm’s credit ratings.
As of
MarchDecember
$ in millions20262025
Net derivative liabilities under bilateral agreements$35,048 $33,473 
Collateral posted
$35,193 $36,201 
Additional collateral or termination payments:
One-notch downgrade$216 $224 
Two-notch downgrade$2,002 $1,797 
Hedge Accounting
The firm applies hedge accounting for (i) interest rate swaps used to manage the interest rate exposure of certain fixed-rate unsecured long- and short-term borrowings, certain fixed-rate certificates of deposit and certain U.S. and non-U.S. government securities classified as available-for-sale, (ii) foreign currency forward contracts used to manage the foreign exchange risk of certain securities classified as available-for-sale, (iii) foreign currency forward contracts and foreign currency-denominated debt used to manage foreign exchange risk on the firm’s net investment in certain non-U.S. operations and (iv) interest rate swaps used to manage the variability of the forecasted cash flows associated with certain floating-rate assets.
To qualify for hedge accounting, the hedging instrument must be highly effective at reducing the risk from the exposure being hedged. Additionally, the firm must formally document the hedging relationship at inception and assess the hedging relationship at least on a quarterly basis to ensure the hedging instrument continues to be highly effective over the life of the hedging relationship.






Fair Value Hedges
The firm designates interest rate swaps as fair value hedges of certain fixed-rate unsecured long- and short-term debt and fixed-rate certificates of deposit and of certain U.S. and non-U.S. government securities classified as available-for-sale. These interest rate swaps hedge changes in fair value attributable to the designated benchmark interest rate (e.g., Secured Overnight Financing Rate (SOFR), Overnight Index Swap Rate or Sterling Overnight Index Average), effectively converting a substantial portion of these fixed-rate financial instruments into floating-rate financial instruments. In addition, the firm designates certain foreign currency forward contracts as fair value hedges of the foreign exchange risk of substantially all of non-U.S. government securities classified as available-for-sale. See Note 8 for information about the amortized cost and fair value of such securities.
The firm applies a statistical method that utilizes regression analysis when assessing the effectiveness of the interest rate hedging relationships in achieving offsetting changes in the fair values of the hedging instrument and the interest rate risk being hedged. An interest rate swap is considered highly effective in offsetting changes in fair value attributable to changes in the hedged risk when the regression analysis results in a coefficient of determination of 80% or greater and a slope between 80% and 125%. The effectiveness of the foreign currency fair value hedges is assessed based on changes in spot rates. Such hedges are considered highly effective when the change in the fair value of the foreign currency forward is between 80% and 125% of the change in the fair value of the hedged item.
For qualifying interest rate fair value hedges, gains or losses on derivatives are included in interest income/expense. The change in fair value of the hedged items attributable to the risk being hedged is reported as an adjustment to its carrying value (hedging adjustment) and is also included in interest income/expense. When a derivative is no longer designated as a hedge, any remaining difference between the carrying value and par value of the hedged item is amortized in interest income/expense over the remaining life of the hedged item using the effective interest method. See Note 23 for further information about interest income and interest expense. The gains/(losses) on the foreign currency fair value hedges (relating to both spot and forward points) and the foreign exchange gains/(losses) on the related available-for-sale securities are included in market making. See Note 6 for further information about gains and losses from market making.

The table below presents the gains/(losses) from interest rate and foreign exchange derivatives accounted for as hedges and the related hedged items.
Three Months
Ended March
$ in millions20262025
Interest Rate Hedges - Investments
Interest rate swaps$324 $(380)
Hedged investments(334)396 
Gains/(losses)$(10)$16 
Interest Rate Hedges - Borrowings and deposits
Interest rate swaps
$(802)$1,909 
Hedged borrowings and deposits766 (1,964)
Gains/(losses)$(36)$(55)
Foreign Currency Hedges - Investments
Foreign currency forward contracts$191 $(184)
Hedged investments(185)175 
Gains/(losses)$6 $(9)
The table below presents the carrying value of investments, deposits and unsecured borrowings that are designated in an interest rate hedging relationship and the related cumulative hedging adjustment (increase/(decrease)) from current and prior hedging relationships included in such carrying values.
$ in millionsCarrying
 Value		Cumulative
 Hedging
 Adjustment
As of March 2026
Assets
Investments$85,149 $(236)
Liabilities
Deposits$503 $(17)
Unsecured short-term borrowings$7,345 $(84)
Unsecured long-term borrowings$163,404 $(8,023)
As of December 2025
Assets
Investments$42,449 $244 
Liabilities
Deposits$762 $(17)
Unsecured short-term borrowings$4,694 $(25)
Unsecured long-term borrowings$143,082 $(7,340)
In the table above:
•Cumulative hedging adjustment included $(4.56) billion as of March 2026 and $(4.61) billion as of December 2025 of hedging adjustments from prior hedging relationships that were de-designated and substantially all were related to unsecured long-term borrowings.
•The amortized cost of investments was $85.61 billion as of March 2026 and $42.44 billion as of December 2025.
In addition, cumulative hedging adjustments for items no longer designated in a hedging relationship were not material as of March 2026 and $(133) million as of December 2025.

Net Investment Hedges
The firm seeks to reduce the impact of fluctuations in foreign exchange rates on its net investments in certain non-U.S. operations through the use of foreign currency forward contracts and foreign currency-denominated debt. For foreign currency forward contracts designated as hedges, the effectiveness of the hedge is assessed based on the overall changes in the fair value of the forward contracts (i.e., based on changes in forward rates). For foreign currency-denominated debt designated as a hedge, the effectiveness of the hedge is assessed based on changes in spot rates. For qualifying net investment hedges, all gains or losses on the hedging instruments are included in currency translation in other comprehensive income/(loss).
The table below presents the gains/(losses) from the hedges in a net investment hedging relationship.
Three Months
Ended March
$ in millions20262025
Foreign currency forward contracts
$71 $(410)
Foreign currency-denominated debt$363 $(911)
Gains or losses on individual net investments in non-U.S. operations are reclassified from accumulated other comprehensive income/(loss) to earnings when such net investments are sold or substantially liquidated. The gross and net gains/(losses) reclassified to earnings from accumulated other comprehensive income/(loss) were not material for both the three months ended March 2026 and March 2025.
The firm had designated $28.97 billion as of March 2026 and $22.89 billion as of December 2025 of foreign currency-denominated debt, included in unsecured long- and short-term borrowings, as hedges of net investments in non-U.S. subsidiaries.

Cash Flow Hedges
The firm designates certain interest rate swaps as cash flow hedges. These interest rate swaps hedge the firm’s exposure to the variability of the forecasted cash flows due to changes in the contractually specified interest rates associated with certain floating-rate assets.
The firm applies a statistical method that utilizes regression analysis when assessing hedge effectiveness. A cash flow hedge is considered highly effective in offsetting the variability of the forecasted cash flows attributable to the hedged risk when the regression analysis results in a coefficient of determination of 80% or greater and a slope between 80% and 125%.
For qualifying cash flow hedges, the gains or losses on derivatives are included in “Cash flow hedges” within the consolidated statements of comprehensive income. Such gains or losses are reclassified to interest income/expense within the consolidated statements of earnings in the same period that the forecasted hedged cash flows impact earnings.
The gains/(losses) included within other comprehensive income/(loss) and the gains/(losses) reclassified to earnings from accumulated other comprehensive income/(loss) related to cash flow hedges were not material for both the three months ended March 2026 and March 2025 and are not expected to be material for the next 12 months. The maximum length of time over which the forecasted cash flows are hedged is approximately one year.