Morgan Stanley 2015 Annual Report Download - page 173

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At December 31, 2015 Fair Value Measurements Using:
Carrying
Value Fair Value Level 1 Level 2 Level 3
(dollars in millions)
Financial Liabilities:
Deposits ..........................................................................$ 155,909 $ 156,163 $ — $ 156,163 $ —
Short-term borrowings .............................................................. 525 525 — 525 —
Securities sold under agreements to repurchase ........................................... 36,009 36,060 — 34,150 1,910
Securities loaned ................................................................... 19,358 19,382 — 19,192 190
Other secured financings ............................................................. 6,610 6,610 — 5,333 1,277
Customer and other payables(1) ....................................................... 183,895 183,895 — 183,895 —
Long-term borrowings .............................................................. 120,723 123,219 — 123,219 —
At December 31, 2014 Fair Value Measurements Using:
Carrying
Value Fair Value Level 1 Level 2 Level 3
(dollars in millions)
Financial Assets:
Cash and due from banks ............................................................$ 21,381 $ 21,381 $ 21,381 $ — $ —
Interest bearing deposits with banks .................................................... 25,603 25,603 25,603 — —
Cash deposited with clearing organizations or segregated under federal and other regulations or
requirements ................................................................... 40,607 40,607 40,607 — —
Investment securities—HTM securities ................................................. 100 100 100 — —
Securities purchased under agreements to resell ........................................... 82,175 82,165 — 81,981 184
Securities borrowed ................................................................. 136,708 136,708 — 136,696 12
Customer and other receivables(1) ..................................................... 45,116 45,028 — 39,945 5,083
Loans(2) ......................................................................... 66,577 67,800 — 18,212 49,588
Financial Liabilities:
Deposits ..........................................................................$ 133,544 $ 133,572 $ — $ 133,572 $ —
Short-term borrowings .............................................................. 496 496 — 496 —
Securities sold under agreements to repurchase ........................................... 69,337 69,433 — 63,921 5,512
Securities loaned ................................................................... 25,219 25,244 — 24,740 504
Other secured financings ............................................................. 7,581 7,881 — 5,465 2,416
Customer and other payables(1) ....................................................... 178,373 178,373 — 178,373 —
Long-term borrowings .............................................................. 120,998 124,961 — 124,150 811
(1) Accrued interest, fees, and dividend receivables and payables where carrying value approximates fair value have been excluded.
(2) Amounts include all loans measured at fair value on a non-recurring basis.
As of December 31, 2015 and December 31, 2014, notional amounts of approximately $99.5 billion and $86.8 billion,
respectively, of the Company’s lending commitments were held for investment and held for sale, which are not included in
the above table. The estimated fair value of such lending commitments was a liability of $2,172 million and $1,178 million,
respectively, as of December 31, 2015 and December 31, 2014. Had these commitments been accounted for at fair value,
$1,791 million would have been categorized in Level 2 and $381 million in Level 3 as of December 31, 2015, and $928
million would have been categorized in Level 2 and $250 million in Level 3 as of December 31, 2014.
4. Derivative Instruments and Hedging Activities.
The Company trades and makes markets globally in listed futures, OTC swaps, forwards, options and other derivatives
referencing, among other things, interest rates, currencies, investment grade and non-investment grade corporate credits,
loans, bonds, U.S. and other sovereign securities, emerging market bonds and loans, credit indices, asset-backed security
indices, property indices, mortgage-related and other asset-backed securities, and real estate loan products. The Company
uses these instruments for market-making, foreign currency exposure management, and asset and liability management.
The Company manages its trading positions by employing a variety of risk mitigation strategies. These strategies include
diversification of risk exposures and hedging. Hedging activities consist of the purchase or sale of positions in related
securities and financial instruments, including a variety of derivative products (e.g., futures, forwards, swaps and options).
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