Morgan Stanley 2014 Annual Report Download - page 106

Unsecured Financing.
The Company views long-term debt and deposits as stable sources of funding. Unencumbered securities and non-
security assets are financed with a combination of long-term and short-term debt and deposits. The
Company’s unsecured financings include structured borrowings, whose payments and redemption values
are based on the performance of certain underlying assets, including equity, credit, foreign exchange, interest
rates and commodities. When appropriate, the Company may use derivative products to conduct asset and
liability management and to make adjustments to the Company’s interest rate and structured borrowings risk
profile (see Note 12 to the Company’s consolidated financial statements in Item 8).
Short-Term Borrowings.
The Company’s unsecured short-term borrowings may consist of commercial paper, bank loans, bank notes and
structured notes with maturities of 12 months or less at issuance.
The table below summarizes the Company’s short-term unsecured borrowings:
At
December 31,
2014
At
December 31,
2013
(dollars in millions)
Commercial paper ........................................... $ — $ 8
Other short-term borrowings ................................... 2,261 2,134
Total .................................................. $2,261 $2,142
Deposits.
The Company’s bank subsidiaries’ funding sources include time deposits, money market deposit accounts,
demand deposit accounts, repurchase agreements, federal funds purchased, commercial paper and Federal Home
Loan Bank advances. The vast majority of deposits in the Company’s U.S. Subsidiary Banks are sourced from
the Company’s retail brokerage accounts and are considered to have stable, low-cost funding characteristics.
Concurrent with the acquisition of the remaining 35% stake in the Wealth Management JV, the deposit sweep
agreement between Citi and the Company was terminated. During 2014, $19 billion of deposits held by Citi
relating to the Company’s customer accounts were transferred to the Company’s depository institutions. At
December 31, 2014, approximately $9 billion of additional deposits are scheduled to be transferred to the
Company’s depository institutions on an agreed-upon basis through June 2015 (see Note 3 to the Company’s
consolidated financial statements in Item 8).
Deposits were as follows:
At
December 31,
2014(1)
At
December 31,
2013(1)
(dollars in millions)
Savings and demand deposits .................................. $132,159 $109,908
Time deposits(2) ............................................ 1,385 2,471
Total(3) ............................................... $133,544 $112,379
(1) Total deposits subject to FDIC insurance at December 31, 2014 and December 31, 2013 were $99 billion and $84 billion, respectively.
(2) Certain time deposit accounts are carried at fair value under the fair value option (see Note 4 to the Company’s consolidated financial
statements in Item 8).
(3) At December 31, 2014 and December 31, 2013, approximately $128 billion and $104 billion, respectively, were attributed to the
Company’s Wealth Management business segment. These total deposits exclude deposits held by Citi relating to the Company’s
customer accounts.
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