Bank of America 2014 Annual Report Download - page 165

Bank of America 2014 163
The table below, which includes both derivatives and non-
derivative cash instruments, identifies the amounts in the
respective income statement line items attributable to the
Corporation’s sales and trading revenue in Global Markets,
categorized by primary risk, for 2014, 2013 and 2012. The
difference between total trading account profits in the table below
and in the Consolidated Statement of Income represents trading
activities in business segments other than Global Markets. This
table includes debit valuation adjustment (DVA) gains (losses), net
of hedges, and funding valuation adjustment (FVA) losses. Global
Markets results in Note 24 – Business Segment Information are
presented on a fully taxable-equivalent (FTE) basis. The table below
is not presented on an FTE basis.
Sales and Trading Revenue
2014
(Dollars in millions)
Trading
Account
Profits
Net
Interest
Income Other (1) Total
Interest rate risk $952 $ 1,169 $ 363 $ 2,484
Foreign exchange risk 1,177 8 (128) 1,057
Equity risk 1,954 (70) 2,318 4,202
Credit risk 1,410 2,682 614 4,706
Other risk 504 (319)106 291
Total sales and trading revenue $ 5,997 $ 3,470 $ 3,273 $ 12,740
2013
Interest rate risk $ 1,120 $ 1,104 $ (333) $ 1,891
Foreign exchange risk 1,170 5 (103) 1,072
Equity risk 1,994 111 2,075 4,180
Credit risk 2,083 2,710 78 4,871
Other risk 367 (219) 69 217
Total sales and trading revenue $ 6,734 $ 3,711 $ 1,786 $ 12,231
2012
Interest rate risk $ (2,875) $ 1,039 $ (4) $ (1,840)
Foreign exchange risk 909 5 5 919
Equity risk 259 (57) 1,891 2,093
Credit risk 2,514 2,321 961 5,796
Other risk 4,899 (227) (5,148) (476)
Total sales and trading revenue $ 5,706 $ 3,081 $ (2,295) $ 6,492
(1) Represents amounts in investment and brokerage services and other income (loss) that are recorded in Global Markets and included in the definition of sales and trading revenue. Includes investment
and brokerage services revenue of $2.2 billion, $2.0 billion and $1.8 billion for 2014, 2013 and 2012, respectively.
Credit Derivatives
The Corporation enters into credit derivatives primarily to facilitate
client transactions and to manage credit risk exposures. Credit
derivatives derive value based on an underlying third-party
referenced obligation or a portfolio of referenced obligations and
generally require the Corporation, as the seller of credit protection,
to make payments to a buyer upon the occurrence of a pre-defined
credit event. Such credit events generally include bankruptcy of
the referenced credit entity and failure to pay under the obligation,
as well as acceleration of indebtedness and payment repudiation
or moratorium. For credit derivatives based on a portfolio of
referenced credits or credit indices, the Corporation may not be
required to make payment until a specified amount of loss has
occurred and/or may only be required to make payment up to a
specified amount.