The notional amount of these unfunded letters of credit was $1.4 billion as of December 31, 2008 and December 31, 2007.
The amount funded was insignificant with no amounts 90 days or more past due or on a non-accrual status at December 31, 2008 and December 31, 2007.
These items have been classified appropriately in Trading account assets or Trading account liabilitieson the Consolidated Balance Sheet.
Changes in fair value of these items are classified in Principal transactions in the Company’s Consolidated Statement of Income.
Other items for which the fair-value option was selected in accordance with SFAS 159 The Company has elected the fair-value option for the following eligible items, which did not affect opening Retained earnings: ?
certain credit products; ?
certain investments in private equity and real estate ventures and certain equity-method investments; ?
certain structured liabilities; ?
certain non-structured liabilities; and ?
certain mortgage loans Certain credit products Citigroup has elected the fair-value option for certain originated and purchased loans, including certain unfunded loan products, such as guarantees and letters of credit, executed by Citigroup’s trading businesses.
None of these credit products is a highly leveraged financing commitment.
Significant groups of transactions include loans and unfunded loan products that are expected to be either sold or securitized in the near term, or transactions where the economic risks are hedged with derivative instruments such as purchased credit default swaps or total return swaps where the Company pays the total return on the underlying loans to a third party.
Citigroup has elected the fair-value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplifications.
Fair value was not elected for most lending transactions across the Company, including where those management objectives would not be met.
The following table provides information about certain credit products carried at fair value:
## Table 0 ##
In addition to the amounts reported above, $72 million and $141 million of unfunded loan commitments related to certain credit products selected for fair-value accounting were outstanding as of December 31, 2008 and December 31, 2007, respectivelyChanges in fair value of funded and unfunded credit products are classified in Principal transactions in the Company’s Consolidated Statement of Income.
Related interest revenue is measured based on the contractual interest rates and reported as Interest revenueon trading account assets or loans depending on their balance sheet classifications.
The changes in fair value for the years ended December 31, 2008 and 2007 due to instrument-specific credit risk totaled to a loss of $38 million and $188 million, respectively.
Certain investments in private equity and real estate ventures and certain equity method investments Citigroup invests in private equity and real estate ventures for the purpose of earning investment returns and for capital appreciation.
The Company has elected the fair-value option for certain of these ventures, because such investments are considered similar to many private equity or hedge fund activities in our investment companies, which are reported at fair value.
The fair-value option brings consistency in the accounting and evaluation of certain of these investments.
As required by SFAS 159, all investments (debt and equity) in such private equity and real estate entities are accounted for at fair value.
These investments are classified as Investments on Citigroup’s Consolidated Balance Sheet.
Citigroup also holds various non-strategic investments in leveraged buyout funds and other hedge funds that previously were required to be accounted for under the equity method.
The Company elected fair-value accounting to reduce operational and accounting complexity.
Since the funds account for all of their underlying assets at fair value, the impact of applying the equity method to Citigroup’s investment in these funds was equivalent to fair-value accounting.
Thus, this fair-value election had no impact on opening Retained earnings.
These investments are classified as Other assets on Citigroup’s Consolidated Balance Sheet.
Changes in the fair values of these investments are classified in Other revenue in the Company’s Consolidated Statement of Income.
Certain structured liabilities The Company has elected the fair-value option for certain structured liabilities whose performance is linked to structured interest rates, inflation or currency risks (“structured liabilities”).
The Company elected the fairvalue option, because these exposures are considered to be trading-related positions and, therefore, are managed on a fair-value basis.
These positions will continue to be classified as debt, deposits or derivatives (Trading account liabilities) on the Company’s Consolidated Balance Sheet according to their legal form.
For those structured liabilities classified as Long-term debt for which the fair-value option has been elected, the aggregate unpaid principal balance exceeds the aggregate fair value of such instruments by $277 million as of December 31, 2008 and $7 million as of December 31, 2007.
The change in fair value for these structured liabilities is reported in Principal transactions in the Company’s Consolidated Statement of Income.
Related interest expense is measured based on the contractual interest rates and reported as such in the Consolidated Income Statement.
Certain non-structured liabilities The Company has elected the fair-value option for certain non-structured liabilities with fixed and floating interest rates (“non-structured liabilities”).
Credit Commitments The table below summarizes Citigroup’s other commitments as of December 31, 2008 and December 31, 2007.
## Table 1 ##
The majority of unused commitments are contingent upon customers’ maintaining specific credit standards.
Commercial commitments generally have floating interest rates and fixed expiration dates and may require payment of fees.
Such fees (net of certain direct costs) are deferred and, upon exercise of the commitment, amortized over the life of the loan or, if exercise is deemed remote, amortized over the commitment period.
Commercial and similar letters of credit A commercial letter of credit is an instrument by which Citigroup substitutes its credit for that of a customer to enable the customer to finance the purchase of goods or to incur other commitments.
Citigroup issues a letter on behalf of its client to a supplier and agrees to pay the supplier upon presentation of documentary evidence that the supplier has performed in accordance with the terms of the letter of credit.
When drawn, the customer then is required to reimburse Citigroup.
One- to four-family residential mortgages A one- to four-family residential mortgage commitment is a written confirmation from Citigroup to a seller of a property that the bank will advance the specified sums enabling the buyer to complete the purchase.
Revolving open-end loans secured by one- to four-family residential properties Revolving open-end loans secured by one- to four-family residential properties are essentially home equity lines of credit.
A home equity line of credit is a loan secured by a primary residence or second home to the extent of the excess of fair market value over the debt outstanding for the first mortgage.
Commercial real estate, construction and land development Commercial real estate, construction and land development include unused portions of commitments to extend credit for the purpose of financing commercial and multifamily residential properties as well as land development projects.
Both secured-by-real-estate and unsecured commitments are included in this line.
In addition, undistributed loan proceeds, where there is an obligation to advance for construction progress, payments are also included in this line.
However, this line only includes those extensions of credit that once funded will be classified as Loans on the Consolidated Balance Sheet.
Credit card lines Citigroup provides credit to customers by issuing credit cards.
The credit card lines are unconditionally cancellable by the issuer.
Commercial and other consumer loan commitments Commercial and other consumer loan commitments include commercial commitments to make or purchase loans, to purchase third-party receivables and to provide note issuance or revolving underwriting facilities.
Amounts include $140 billion and $259 billion with an original maturity of less than one year at December 31, 2008 and December 31, 2007, respectively.
In addition, included in this line item are highly leveraged financing commitments which are agreements that provide funding to a borrower with higher levels of debt (measured by the ratio of debt capital to equity capital of the borrower) than is generally considered normal for other companies.
This type of financing is commonly employed in corporate acquisitions, management buy-outs and similar transactions.
commitments.
For a further description of the loan loss reserve and related accounts, see “Managing Global Risk” and Notes 1 and 18 to the Consolidated Financial Statements on pages 51, 122 and 165, respectively.
SECURITIZATIONS The Company securitizes a number of different asset classes as a means of strengthening its balance sheet and accessing competitive financing rates in the market.
Under these securitization programs, assets are sold into a trust and used as collateral by the trust to obtain financing.
The cash flows from assets in the trust service the corresponding trust securities.
If the structure of the trust meets certain accounting guidelines, trust assets are treated as sold and are no longer reflected as assets of the Company.
If these guidelines are not met, the assets continue to be recorded as the Company’s assets, with the financing activity recorded as liabilities on Citigroup’s balance sheet.
Citigroup also assists its clients in securitizing their financial assets and packages and securitizes financial assets purchased in the financial markets.
The Company may also provide administrative, asset management, underwriting, liquidity facilities and/or other services to the resulting securitization entities and may continue to service some of these financial assets.
Elimination of QSPEs and Changes in the FIN 46(R) Consolidation Model The FASB has issued an exposure draft of a proposed standard that would eliminate Qualifying Special Purpose Entities (QSPEs) from the guidance in FASB Statement No.140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (SFAS 140).
While the proposed standard has not been finalized, if it is issued in its current form it will have a significant impact on Citigroup’s Consolidated Financial Statements as the Company will lose sales treatment for certain assets previously sold to a QSPE, as well as for certain future sales, and for certain transfers of portions of assets that do not meet the proposed definition of “participating interests.
” This proposed revision could become effective on January 1, 2010.
In connection with the proposed changes to SFAS 140, the FASB has also issued a separate exposure draft of a proposed standard that proposes three key changes to the consolidation model in FASB Interpretation No.46 (revised December 2003), “Consolidation of Variable Interest Entities” (FIN 46(R)).
First, the revised standard would include former QSPEs in the scope of FIN 46(R).
In addition, FIN 46(R) would be amended to change the method of analyzing which party to a variable interest entity (VIE) should consolidate the VIE (such consolidating entity is referred to as the “primary beneficiary”) to a qualitative determination of power combined with benefits or losses instead of the current risks and rewards model.
Finally, the proposed standard would require that the analysis of primary beneficiaries be re-evaluated whenever circumstances change.
The existing standard requires reconsideration only when specified reconsideration events occur.
The FASB is currently deliberating these proposed standards, and they are, accordingly, still subject to change.
Since QSPEs will likely be eliminated from SFAS 140 and thus become subject to FIN 46(R) consolidation guidance and because the FIN 46(R) method of determining which party must consolidate a VIE will likely change should this proposed standard become effective, the Company expects to consolidate certain of the currently unconsolidated VIEs and QSPEs with which Citigroup was involved as of December 31, 2008.
The Company’s estimate of the incremental impact of adopting these changes on Citigroup’s Consolidated Balance Sheets and risk-weighted assets, based on December 31, 2008 balances, our understanding of the proposed changes to the standards and a proposed January 1, 2010 effective date, is presented below.
The actual impact of adopting the amended standards as of January 1, 2010 could materially differ.
The pro forma impact of the proposed changes on GAAP assets and riskweighted assets, assuming application of existing risk-based capital rules, at January 1, 2010 (based on the balances at December 31, 2008) would result in the consolidation of incremental assets as follows:
## Table 2 ##
The table reflects (i) the estimated portion of the assets of QSPEs to which Citigroup, acting as principal, has transferred assets and received sales treatment as of December 31, 2008 (totaling approximately $822.1 billion), and (ii) the estimated assets of significant unconsolidated VIEs as of December 31, 2008 with which Citigroup is involved (totaling approximately $288.0 billion) that would be consolidated under the proposal.
Due to the variety of transaction structures and level of the Company’s involvement in individual QSPEs and VIEs, only a subset of the QSPEs and VIEs with which the Company is involved are expected to be consolidated under the proposed change.
A complete description of the Company’s accounting for securitized assets can be found in Note 1 to the Consolidated Financial Statements on page 122.
Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios
## Table 3 ##
(1) The ratios of 90 days or more past due and net credit losses are calculated based on end-of-period and average loans, respectively, both net of unearned income.
(2) Total loans and total average loans exclude certain interest and fees on credit cards of approximately $3 billion and $2 billion, respectively, which are included in Consumer loans on the Consolidated Balance Sheet.
(3) Included in Other assets on the Consolidated Balance Sheet.
(4) This table presents credit information on a held basis and shows the impact of securitizations to reconcile to a managed basis.
Only North America Cards from a product view, and North America from a regional view, are affected.
Managed-basis reporting is a non-GAAP measure.
Held-basis reporting is the related GAAP measure.
See a discussion of managed-basis reporting on page 57.
North America Consumer Mortgage Portfolio Citi’s North America consumer mortgage portfolio consists of both residential first mortgages and home equity loans.
The following table shows the outstanding quarterly end-of-period loans for Citi’s North America residential first mortgage and home equity loan portfolios:

<table><tr><td></td><td>2008</td><td>2007</td></tr><tr><td><i>In millions of dollars</i></td><td>Trading assets</td><td>Loans</td><td>Trading assets</td><td>Loans</td></tr><tr><td>Carrying amount reported on the Consolidated Balance Sheet</td><td>$16,254</td><td>$2,315</td><td>$26,020</td><td>$3,038</td></tr><tr><td>Aggregate unpaid principal balance in excess of fair value</td><td>$6,501</td><td>$3</td><td>$899</td><td>$-5</td></tr><tr><td>Balance on non-accrual loans or loans more than 90 days past due</td><td>$77</td><td>$1,113</td><td>$186</td><td>$1,292</td></tr><tr><td>Aggregate unpaid principal balance in excess of fair value for non-accrual loans or loans more than 90 days pastdue</td><td>$190</td><td>$-4</td><td>$68</td><td>$—</td></tr></table>
<table><tr><td><i>In millions of dollars</i></td><td>U.S.</td><td>Outside U.S.</td><td>December 31, 2008</td><td>December 31, 2007</td></tr><tr><td>Commercial and similar letters of credit</td><td>$2,187</td><td>$6,028</td><td>$8,215</td><td>$9,175</td></tr><tr><td>One- to four-family residential mortgages</td><td>628</td><td>309</td><td>937</td><td>4,587</td></tr><tr><td>Revolving open-end loans secured by one- to four-family residential properties</td><td>22,591</td><td>2,621</td><td>25,212</td><td>35,187</td></tr><tr><td>Commercial real estate, construction and land development</td><td>2,084</td><td>618</td><td>2,702</td><td>4,834</td></tr><tr><td>Credit card lines</td><td>867,261</td><td>135,176</td><td>1,002,437</td><td>1,103,535</td></tr><tr><td>Commercial and other consumer loan commitments</td><td>217,818</td><td>92,179</td><td>309,997</td><td>473,631</td></tr><tr><td>Total</td><td>$1,112,569</td><td>$236,931</td><td>$1,349,500</td><td>$1,630,949</td></tr></table>
<table><tr><td></td><td>Incremental</td></tr><tr><td><i>In billions of dollars</i></td><td>GAAP  assets</td><td>Risk- weighted  assets</td></tr><tr><td>Credit cards</td><td>$ 91.9</td><td>$88.9</td></tr><tr><td>Commercial paper conduits</td><td>59.6</td><td>—</td></tr><tr><td>Private label consumer mortgages</td><td>4.4</td><td>2.1</td></tr><tr><td>Student loans</td><td>14.4</td><td>3.5</td></tr><tr><td>Muni bonds</td><td>6.2</td><td>1.9</td></tr><tr><td>Mutual fund deferred sales commission securitization</td><td>0.8</td><td>0.8</td></tr><tr><td>Investment funds</td><td>1.7</td><td>1.7</td></tr><tr><td>Total</td><td>$179.0</td><td>$98.9</td></tr></table>
<table><tr><td><i>In millions of dollars, except total and average loan amounts in billions</i></td><td rowspan="2"> Total loans  2008</td><td colspan="3">90 days or more past due -1</td><td rowspan="2"> Average loans  2008</td><td colspan="3">Net credit losses -1</td></tr><tr><td> Product View:</td><td>2008</td><td>2007</td><td>2006</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>  <i>Global Cards</i> </td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td><i>North America</i></td><td>$45.2</td><td>$1,298</td><td>$896</td><td>$798</td><td>$43.6</td><td>$2,970</td><td>$2,054</td><td>$1,928</td></tr><tr><td><i>Ratio</i></td><td></td><td>2.87%</td><td>1.88%</td><td>1.60%</td><td></td><td>6.81%</td><td>4.69%</td><td>4.09%</td></tr><tr><td><i>EMEA</i></td><td>14.2</td><td>369</td><td>233</td><td>114</td><td>15.6</td><td>664</td><td>340</td><td>303</td></tr><tr><td><i>Ratio</i></td><td></td><td>2.60%</td><td>1.53%</td><td>1.60%</td><td></td><td>4.23%</td><td>2.80%</td><td>4.94%</td></tr><tr><td><i>Latin America</i></td><td>11.5</td><td>561</td><td>551</td><td>380</td><td>13.8</td><td>1,682</td><td>1,025</td><td>552</td></tr><tr><td><i>Ratio</i></td><td></td><td>4.86%</td><td>3.92%</td><td>3.84%</td><td></td><td>12.17%</td><td>8.60%</td><td>6.91%</td></tr><tr><td><i>Asia</i></td><td>16.6</td><td>262</td><td>249</td><td>207</td><td>17.0</td><td>602</td><td>458</td><td>425</td></tr><tr><td><i>Ratio</i></td><td></td><td>1.57%</td><td>1.50%</td><td>1.54%</td><td></td><td>3.53%</td><td>3.15%</td><td>3.48%</td></tr><tr><td>  <i>Consumer Banking</i> </td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td><i>North America</i></td><td>284.4</td><td>11,271</td><td>6,453</td><td>3,655</td><td>298.2</td><td>8,098</td><td>3,015</td><td>1,834</td></tr><tr><td><i>Ratio</i></td><td></td><td>3.96%</td><td>2.13%</td><td>1.34%</td><td></td><td>2.71%</td><td>1.04%</td><td>0.72%</td></tr><tr><td>EMEA</td><td>21.6</td><td>547</td><td>322</td><td>373</td><td>24.5</td><td>718</td><td>524</td><td>336</td></tr><tr><td><i>Ratio</i></td><td></td><td>2.54%</td><td>1.32%</td><td>2.12%</td><td></td><td>2.92%</td><td>2.36%</td><td>2.09%</td></tr><tr><td>Latin America</td><td>14.0</td><td>422</td><td>457</td><td>364</td><td>15.1</td><td>621</td><td>251</td><td>147</td></tr><tr><td><i>Ratio</i></td><td></td><td>3.01%</td><td>3.07%</td><td>3.30%</td><td></td><td>4.10%</td><td>1.90%</td><td>1.44%</td></tr><tr><td>Asia</td><td>52.7</td><td>522</td><td>457</td><td>459</td><td>57.5</td><td>1,841</td><td>1,587</td><td>1,257</td></tr><tr><td><i>Ratio</i></td><td></td><td>0.99%</td><td>0.77%</td><td>0.89%</td><td></td><td>3.19%</td><td>2.90%</td><td>2.59%</td></tr><tr><td>  <i>GWM</i> </td><td>55.5</td><td>289</td><td>30</td><td>21</td><td>63.5</td><td>52</td><td>1</td><td>-4</td></tr><tr><td><i>Ratio</i></td><td></td><td>0.52%</td><td>0.05%</td><td>0.05%</td><td></td><td>0.08%</td><td>0.00%</td><td>-0.01%</td></tr><tr><td> On-balance-sheet loans<sup>(2</sup><sup>)</sup></td><td>$515.7</td><td>$15,541</td><td>$9,648</td><td>$6,371</td><td>$548.8</td><td>$17,248</td><td>$9,255</td><td>$6,778</td></tr><tr><td> Ratio</td><td></td><td>3.01%</td><td>1.73%</td><td>1.33%</td><td></td><td>3.13%</td><td>1.79%</td><td>1.52%</td></tr><tr><td>Securitized receivables (all in NA Cards)</td><td>$105.9</td><td>$2,655</td><td>$1,864</td><td>$1,616</td><td>$106.9</td><td>$7,407</td><td>$4,728</td><td>$3,986</td></tr><tr><td>Credit card receivables held-for-sale<sup>(3</sup><sup>)</sup></td><td>—</td><td>—</td><td>15</td><td>—</td><td>0.5</td><td>—</td><td>—</td><td>5</td></tr><tr><td> Managed loans<sup>(4</sup><sup>)</sup></td><td>$621.6</td><td>$18,196</td><td>$11,527</td><td>$7,987</td><td>$656.2</td><td>$24,655</td><td>$13,983</td><td>$10,769</td></tr><tr><td> Ratio </td><td></td><td>2.92%</td><td>1.73%</td><td>1.38%</td><td></td><td>3.75%</td><td>2.26%</td><td>1.98%</td></tr><tr><td> Regional view:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td><i>North America</i></td><td>$365.7</td><td>$12,815</td><td>$7,376</td><td>$4,465</td><td>$380.5</td><td>$11,092</td><td>$5,072</td><td>$3,761</td></tr><tr><td><i>Ratio</i></td><td></td><td>3.50%</td><td>1.89%</td><td>1.27%</td><td></td><td>2.91%</td><td>1.38%</td><td>1.14%</td></tr><tr><td><i>EMEA</i></td><td>42.7</td><td>922</td><td>555</td><td>488</td><td>49.6</td><td>1,385</td><td>862</td><td>640</td></tr><tr><td><i>Ratio</i></td><td></td><td>2.16%</td><td>1.14%</td><td>1.65%</td><td></td><td>2.79%</td><td>2.06%</td><td>2.44%</td></tr><tr><td><i>Latin America</i></td><td>27.9</td><td>983</td><td>1,008</td><td>744</td><td>31.7</td><td>2,303</td><td>1,277</td><td>700</td></tr><tr><td><i>Ratio</i></td><td></td><td>3.51%</td><td>3.21%</td><td>3.23%</td><td></td><td>7.25%</td><td>4.63%</td><td>3.43%</td></tr><tr><td>Asia</td><td>79.4</td><td>821</td><td>709</td><td>674</td><td>87.0</td><td>2,468</td><td>2,044</td><td>1,677</td></tr><tr><td><i>Ratio</i></td><td></td><td>0.97%</td><td>0.81%</td><td>0.92%</td><td></td><td>2.83%</td><td>2.58%</td><td>2.44%</td></tr><tr><td> On-balance-sheet loans<sup>(2</sup><sup>)</sup></td><td>$515.7</td><td>$15,541</td><td>$9,648</td><td>$6,371</td><td>$548.8</td><td>$17,248</td><td>$9,255</td><td>$6,788</td></tr><tr><td> Ratio</td><td></td><td>3.01%</td><td>1.73%</td><td>1.33%</td><td></td><td>3.13%</td><td>1.79%</td><td>1.52%</td></tr><tr><td>Securitized receivables (all in<i>NA Cards)</i></td><td>$105.9</td><td>$2,655</td><td>$1,864</td><td>$1,616</td><td>$106.9</td><td>$7,407</td><td>$4,728</td><td>$3,986</td></tr><tr><td>Credit card receivables held-for-sale<sup>(3</sup><sup>)</sup></td><td>—</td><td>—</td><td>15</td><td>—</td><td>0.5</td><td>—</td><td>—</td><td>5</td></tr><tr><td> Managed loans<sup>(4</sup><sup>)</sup></td><td>$621.6</td><td>$18,196</td><td>$11,527</td><td>$7,987</td><td>$656.2</td><td>$24,655</td><td>$13,983</td><td>$10,769</td></tr><tr><td>  <i>Ratio</i> </td><td></td><td>2.92%</td><td>1.73%</td><td>1.38%</td><td></td><td>3.75%</td><td>2.26%</td><td>1.98%</td></tr></table>

Question: When does Net credit losses of Global Cards of North America reach the largest value?