Citibank 2009 Annual Report Download - page 182

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13. FEDERAL FUNDS/SECURITIES BORROWED,
LOANED, AND SUBJECT TO REPURCHASE
AGREEMENTS
Federal funds sold and securities borrowed or purchased under agreements to
resell, at their respective fair values, consisted of the following:
In millions of dollars at December 31, 2009 2008
Federal funds sold $ 4 $ —
Securities purchased under agreements to resell 105,165 78,701
Deposits paid for securities borrowed 116,853 105,432
Total $222,022 $184,133
Federal funds purchased and securities loaned or sold under agreements
to repurchase, at their respective fair values, consisted of the following:
In millions of dollars at December 31, 2009 2008
Federal funds purchased $ 2,877 $ 5,755
Securities sold under agreements to repurchase 125,561 177,585
Deposits received for securities loaned 25,843 21,953
Total $154,281 $205,293
The resale and repurchase agreements represent collateralized financing
transactions used to generate net interest income and facilitate trading
activity. These instruments are collateralized principally by government
and government-agency securities and generally have terms ranging from
overnight to up to a year.
It is the Company’s policy to take possession of the underlying collateral,
monitor its market value relative to the amounts due under the agreements
and, when necessary, require prompt transfer of additional collateral or
reduction in the balance in order to maintain contractual margin protection.
In the event of counterparty default, the financing agreement provides the
Company with the right to liquidate the collateral held.
The majority of the resale and repurchase agreements are recorded at
fair value. The remaining portion is carried at the amount of cash initially
advanced or received, plus accrued interest, as specified in the respective
agreements. Resale agreements and repurchase agreements are reported net
by counterparty, when applicable. Excluding the impact of the allowable
netting, resale agreements totaled $166.0 billion and $114.0 billion at
December 31, 2009 and 2008, respectively.
A majority of the deposits paid for securities borrowed and deposits
received for securities loaned are recorded at the amount of cash advanced or
received and are collateralized principally by government and government-
agency securities and corporate debt and equity securities. The remaining
portion is recorded at fair value as the Company elected fair value options for
certain securities borrowed and loaned portfolios. With respect to securities
loaned, the Company receives cash collateral in an amount generally in
excess of the market value of securities loaned. The Company monitors
the market value of securities borrowed and securities loaned daily, and
additional collateral is obtained as necessary. Securities borrowed and
securities loaned are reported net by counterparty, when applicable.