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2.0.0.10 false Variable Interest Entities 115 - Disclosure - Variable Interest Entities true false false false 1 usd $ false false iso4217_USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 iso4217_USD_per_shares Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares 0 shares Standard http://www.xbrl.org/2003/instance shares 0 5 Variable Interest Entities 3 us-gaap_ScheduleOfVariableInterestEntitiesTextBlock us-gaap true na duration string No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div> Note 7.    Variable Interest Entities We invest in various types of VIEs, as defined by GAAP, some of which are recorded in our consolidated financial statements and all of which are described below. We also invest in various forms of asset-backed securities, which we carry in our investment securities portfolio. These asset-backed securities meet the GAAP definition of asset securitization entities, which entities are considered to be VIEs. We are not considered to be the primary beneficiary of these VIEs, as defined by GAAP, since we do not have control over their activities. Additional information about asset-backed securities is provided in note 2. Tax-Exempt Investment Program In the normal course of our business, we structure and sell certificated interests in pools of tax-exempt investment-grade assets, principally to our mutual fund customers. We structure these pools as partnership trusts, and the trusts are recorded in our consolidated statement of condition as investment securities available for sale and other short-term borrowings. We may also provide liquidity and re-marketing services to the trusts. As of March 31, 2010 and December 31, 2009, we carried investment securities available for sale, composed of securities related to state and political subdivisions, with a fair value of $3.06 billion and $3.13 billion, respectively, and other short-term borrowings of $2.66 billion and $2.74 billion, respectively, in our consolidated statement of condition in connection with these trusts. We transfer assets to the trusts from our investment securities portfolio at adjusted book value, and the trusts finance the acquisition of these assets by selling certificated interests issued by the trusts to third-party investors and to State Street as residual holder. These transfers do not meet the de-recognition criteria defined by GAAP, and therefore are recorded in our consolidated financial statements. The trusts had a weighted-average life of approximately 8.0 years at March 31, 2010, compared to approximately 8.1 years at December 31, 2009. Under separate legal agreements, we provide standby bond purchase agreements to these trusts, which obligate State Street to acquire the certificated interests at par value in the event that the re-marketing agent is unable to place the certificated interests with investors. Our obligations as standby bond purchase agreement provider terminate in the event of the following credit events: payment default, bankruptcy of the issuer or credit enhancement provider, the imposition of taxability, or the downgrade of an asset held by the trust below investment grade. Our commitments to the trusts under these standby bond purchase agreements totaled $2.82 billion at March 31, 2010, none of which was utilized at period-end. In the event that our obligations under these agreements are triggered, no material impact to our consolidated results of operations or financial condition is expected to occur, because the securities are already recorded at fair value in our consolidated statement of condition. Asset-Backed Commercial Paper Program We sponsor and administer multi-seller asset-backed commercial paper programs, or conduits. These conduits, the first of which was established in 1992, were originally designed to satisfy the demand of our institutional customers, particularly mutual fund customers, for commercial paper. The conduits obtain funding through various sources, including our customer deposit base, the issuance of the above-described commercial paper to independent third parties or other short-term sources of liquidity. We consider the activities of the conduits in our liquidity management process, and offer the program to our customers to fund the conduit’s assets. The conduits hold diversified investments, which are primarily mortgage- and asset-backed securities purchased from independent third parties, collateralized by mortgages, student loans, automobile and equipment loans and credit card receivables, among other asset types. Since we have determined that we are the primary beneficiary of the conduits, their assets and liabilities are recorded in our consolidated financial statements. Asset-Backed Securitization Trusts In connection with our adoption of the new accounting standard related to accounting for VIEs, on January 1, 2010, we consolidated a series of third-party asset-backed securitization trusts, for financial reporting purposes only, into our consolidated financial statements. The consolidation was based on the significance of our investments in the trusts to the trusts themselves, as well as our corresponding unilateral servicer removal rights. The trusts’ assets and liabilities are primarily composed of credit card receivables and short-term third-party notes. We were not involved in establishing or securitizing the trusts, we did not originate the credit card receivables and we do not manage the trusts or provide servicing for the trusts’ assets or liabilities. Our relationship to the trusts consists solely of our role as a passive investor. The assets of the trusts can be used only to settle the trusts’ obligations, and the creditors of the trusts do not have recourse to the general credit of State Street. State Street has no unfunded lending commitments or guarantees to the trusts. In conjunction with our consolidation of the trusts, we elected to account for the trusts’ assets and liabilities under the fair value option permitted by GAAP. Accordingly, changes in the fair value of the credit card receivables and the short-term third-party notes, which are carried in loans and leases and other short-term borrowings, respectively, in our consolidated statement of condition, are recorded in processing fees and other revenue or other expenses in our consolidated statement of income. Interest revenue related to the receivables and interest expense related to the short-term notes are recorded in net interest revenue. Information with respect to the measurement of the fair value of the trusts’ assets and liabilities is provided in note 9. As of March 31, 2010, we recorded aggregate credit card receivables of $916 million in loans and leases, and aggregate short-term third-party notes of $674 million in other short-term borrowings, at fair value in our consolidated statement of condition in connection with the trusts. For the three months ended March 31, 2010, the effect of fair value re-measurement recorded in processing fees and other revenue in our consolidated statement of income attributable to our net investment in the trusts was a gain of $5 million.   Collateralized Debt Obligations We serve as collateral manager for a series of collateralized debt obligations, referred to as CDOs. A CDO is a structured investment vehicle which purchases a portfolio of assets funded through the issuance of several classes of debt and equity, the repayment of and return on which are linked to the performance of the underlying assets. We have determined that we are not the primary beneficiary of these VIEs, and do not record them in our consolidated financial statements. At both March 31, 2010 and December 31, 2009, the aggregate notional value of these CDOs was $2.0 billion. At both March 31, 2010 and December 31, 2009, the carrying value of the underlying collateral was $1.2 billion. We did not acquire or transfer any investment securities to a CDO during the three months ended March 31, 2010 or 2009. </div> Note 7.    Variable Interest Entities We invest in various types of VIEs, as defined by GAAP, some of which are recorded in our false false false Disclosure of variable interest entities (VIE), including, but not limited to the nature, purpose, size, and activities of the VIE, the carrying amount and classification of consolidated assets that are collateral for the VIE's obligations, lack of recourse if creditors (or beneficial interest holders) of a consolidated VIE have no recourse to the general credit of the primary beneficiary. An enterprise that holds a significant variable interest in a VIE but is not the primary beneficiary may disclose the nature of its involvement with the VIE and when that involvement began, the nature, purpose, size, and activities of the VIE and the enterprise's maximum exposure to loss as a result of its involvement with the VIE. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 140 -Paragraph 35 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 46R -Paragraph 2, 14, 15, 16, 23, 24, 25, 26 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 46R -Paragraph 4 -Subparagraph g Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS140-4 and FIN46(R)-8 -Paragraph C4 -Subparagraph d false false 1 1 false UnKnown UnKnown UnKnown false true