beatandraise : SEC Filings Research with AI

beatandraise.com

1.0.0.3 false Collateralized Transactions. false 1 $ 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 Collateralized Transactions. 3 us-gaap_ScheduleOfFinancialInstrumentsOwnedAndPledgedAsCollateralTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> 5.    Collateralized Transactions.   Securities purchased under agreements to resell (“reverse repurchase agreements”) and Securities sold under agreements to repurchase (“repurchase agreements”), principally government and agency securities, are carried at the amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements; such amounts include accrued interest. Reverse repurchase agreements and repurchase agreements are presented on a net-by-counterparty basis, when appropriate. The Company’s policy is generally to take possession of securities purchased under agreements to resell. Securities borrowed and Securities loaned are carried at the amounts of cash collateral advanced and received in connection with the transactions. 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 Company is deemed to be the primary beneficiary, and certain equity-referenced securities and loans where in all instances these liabilities are payable solely from the cash flows of the related assets accounted for as Financial instruments owned (see Note 6).   The Company pledges its financial instruments owned to collateralize repurchase agreements and other securities financings. Pledged financial instruments that can be sold or repledged by the secured party are identified as Financial instruments owned (pledged to various parties) in the consolidated statements of financial condition. The carrying value and classification of financial instruments owned by the Company that have been loaned or pledged to counterparties where those counterparties do not have the right to sell or repledge the collateral were as follows:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="76%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">At December 31, 2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">At December 31, 2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="5" align="center">(dollars in millions)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Financial instruments owned: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> U.S. government and agency securities </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">18,376</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">9,134</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other sovereign government obligations </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,584</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,570</td> </tr> <tr> <td valign="top"> Corporate and other debt </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">13,111</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21,850</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Corporate equities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10,284</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,388</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">46,355</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">37,942</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </table>   The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance the Company’s inventory positions. The Company also engages in securities financing transactions for customers through margin lending. Under these agreements and transactions, the Company either receives or provides collateral, including U.S. government and agency securities, other sovereign government obligations, corporate and other debt, and corporate equities. The Company receives collateral in the form of securities in connection with reverse repurchase agreements, securities borrowed and derivative transactions, and customer margin loans. In many cases, the Company is permitted to sell or repledge these securities held as collateral and use the securities to secure repurchase agreements, to enter into securities lending and derivative transactions or for delivery to counterparties to cover short positions. As of December 31, 2009 and December 31, 2008, the fair value of financial instruments received as collateral where the Company is permitted to sell or repledge the securities was $429 billion and $290 billion, respectively, and the fair value of the portion that had been sold or repledged was $311 billion and $214 billion, respectively.   The Company additionally receives securities as collateral in connection with certain securities for securities transactions in which the Company is the lender. In instances where the Company is permitted to sell or repledge these securities, the Company reports the fair value of the collateral received and the related obligation to return the collateral in the consolidated statements of financial condition. As of December 31, 2009 and December 31, 2008, $14 billion and $5 billion, respectively, were reported as Securities received as collateral and an Obligation to return securities received as collateral in the consolidated statements of financial condition. Collateral received in connection with these transactions that was subsequently repledged was approximately $13 billion and $4 billion as of December 31, 2009 and December 31, 2008, respectively.   The Company manages credit exposure arising from reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Company, in the event of a customer default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations. The Company 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 to ensure such transactions are adequately collateralized. Where deemed appropriate, the Company’s agreements with third parties specify its rights to request additional collateral. Customer receivables generated from margin lending activity are collateralized by customer-owned securities held by the Company. For these transactions, adherence to the Company’s collateral policies significantly limits the Company’s credit exposure in the event of customer default. The Company 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.   The Company 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. Financial instruments owned by the Company include U.S. government and agency securities and securities issued by other sovereign governments (principally the U.K., Japan, South Korea and Brazil), which, in the aggregate, represented approximately 11% of the Company’s total assets as of December 31, 2009. In addition, substantially all of the collateral held by the Company for resale agreements or bonds borrowed, which together represented approximately 30% of the Company’s total assets as of December 31, 2009, consist of securities issued by the U.S. government, federal agencies or other sovereign government obligations. Positions taken and commitments made by the Company, 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 Company may originate 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.   As of December 31, 2009 and December 31, 2008, cash and securities deposited with clearing organizations or segregated under federal and other regulations or requirements were as follows:   <table border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="72%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">December 31, 2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">December 31, 2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="5" align="center">(dollars in millions)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cash deposited with clearing organizations or segregated under federal and other regulations or requirements </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">23,712</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">24,039</td> </tr> <tr> <td valign="top"> Securities(1) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,296</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">38,670</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">35,008</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">62,709</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(1)</td> <td valign="top" align="left">Securities deposited with clearing organizations or segregated under federal and other regulations or requirements are sourced from Federal funds sold and securities purchased under agreements to resell and Financial instruments owned in the consolidated statements of financial condition.</td> </tr> </table> </div> 5.    Collateralized Transactions.   Securities purchased under agreements to resell (“reverse repurchase false false No definition available. No authoritative reference available. false false 1 1 false UnKnown UnKnown UnKnown false true