Table VI Allowance for Credit Losses
## Table 0 ##
(1) Includes small business commercial – domestic charge-offs of $2.0 billion, $931 million and $424 million in 2008, 2007 and 2006, respectively.
Small business commercial – domestic charge offs were not material in 2005 and 2004.
(2) Includes small business commercial – domestic recoveries of $39 million, $51 million and $54 million in 2008, 2007 and 2006, respectively.
Small business commercial – domestic recoveries were not material in 2005 and 2004.
(3) The 2008 amount includes the $1.2 billion addition of the Countrywide allowance for loan losses as of July 1, 2008.
The 2007 amount includes the $725 million and $25 million additions of the LaSalle and U. S.  Trust Corporation allowance for loan losses as of October 1, 2007 and July 1, 2007.
The 2006 amount includes the $577 billion addition of the MBNA allowance for loan losses as of January 1, 2006.
The 2004 amount includes the $2.8 billion addition of the FleetBoston allowance for loan losses as of April 1, 2004.
(4) The 2007 amount includes the $124 million addition of the LaSalle reserve for unfunded lending commitments as of October 1, 2007.
The 2004 amount includes the $85 million addition of the FleetBoston reserve for unfunded lending commitments as of April 1, 2004.
(5) Outstanding loan and lease balances and ratios do not include loans measured at fair value in accordance with SFAS 159 at and for the year ended December 31, 2008 and 2007.
Loans measured at fair value were $5.4 billion and $4.6 billion at December 31, 2008 and 2007.
Average loans measured at fair value were $4.9 billion and $3.0 billion for 2008 and 2007.
(6) We account for acquired impaired loans in accordance with SOP 03-3.
For more information on the impact of SOP 03-3 on asset quality, see Consumer Portfolio Credit Risk Management beginning on page 62.  n/a = not applicable
The Corporation executes the majority of its derivative positions in the over-the-counter market with large, international financial institutions, including broker/dealers and, to a lesser degree with a variety of other investors.
The Corporation is subject to counterparty credit risk in the event that these counterparties fail to perform under the terms of their contracts and records valuation adjustments against the derivative assets to reflect counterparty credit risk.
Substantially all of the derivative transactions are executed on a daily margin basis.
Therefore, events such as a credit downgrade (depending on the ultimate rating level) or a breach of credit covenants would typically require an increase in the amount of collateral required of the counterparty (where applicable), and/or allow the Corporation to take additional protective measures such as early termination of all trades.
Further, as discussed above, the Corporation enters into legally enforceable master netting agreements which reduce risk by permitting the closeout and netting of transactions with the same counterparty upon the occurrence of certain events.
During 2008, valuation adjustments of $3.2 billion were recognized as trading account losses for counterparty credit risk.
At December 31, 2008, the cumulative counterparty credit risk valuation adjustment that was netted against the derivative asset balance was $4.0 billion.
In addition, the fair value of the Corporation’s derivative liabilities is adjusted to reflect the impact of the Corporation’s credit quality.
During 2008, valuation adjustments of $364 million were recognized as trading account profits for changes in the Corporation’s credit risk.
At December 31, 2008, the Corporation’s cumulative credit risk valuation adjustment that was netted against the derivative liabilities balance was $573 million.
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 predefined 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.
Credit derivative instruments in which the Corporation is the seller of credit protection and their expiration at December 31, 2008 are summarized in the table below.
These instruments have been classified as investment and non-investment grade based on the credit quality of the underlying reference name within the credit derivative.
For most credit derivatives, the notional value represents the maximum amount payable by the Corporation.
However, the Corporation does not exclusively monitor its exposure to credit derivatives based on notional value because this measure does not take into consideration the probability of occurrence.
As such, the notional value is not a reliable ndicator of the Corporation’s exposure to these contracts.
Instead, a risk framework is used to define risk tolerances and establish limits to help to ensure that certain credit risk-related losses occur within acceptable, predefined limits.
The Corporation may economically hedge its exposure to credit derivatives by entering into a variety of offsetting derivative contracts and security positions.
For example, in certain instances, the Corporation may purchase credit protection with identical underlying referenced names to offset its exposure.
At December 31, 2008, the carrying value and notional value of credit protection sold in which the Corporation held purchased protection with identical underlying referenced names was $92.4 billion and $819.4 billion.
ALM Activities Interest rate contracts and foreign exchange contracts are utilized in the Corporation’s ALM activities.
The Corporation maintains an overall interest rate risk management strategy that incorporates the use of interest rate contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility.
The Corporation’s goal is to manage interest rate sensitivity so that movements in interest rates do not significantly adversely affect net interest income.
As a result of interest rate fluctuations hedged fixed-rate assets and liabilities appreciate or depreciate in market value.
Gains or losses on the derivative instruments that are linked to the hedged fixed-rate assets and liabilities are expected to substantially offset this unrealized appreciation or depreciation.
Interest income and interest expense on hedged variable-rate assets and liabilities increase or decrease as a result of interest rate fluctuations.
Gains and losses on the derivative instruments that are linked to these hedged assets and liabilities are expected to substantially offset this variability in earnings.
Interest rate contracts, which are generally non-leveraged generic interest rate and basis swaps, options and futures, allow the Corporation to manage its interest rate risk position.
Non-leveraged generic interest rate swaps involve the exchange of fixed-rate and variable-rate interest payments based on the contractual underlying notional amount.
Basis swaps involve the exchange of interest payments based on the contractual underlying notional amounts, where both the pay rate and the receive rate are floating rates based on different indices.
Option products primarily consist of caps, floors and swaptions.
Futures contracts used for the Corporation’s ALM activities are primarily index futures providing for cash payments based upon the movements of an underlying rate index.
The Corporation uses foreign currency contracts to manage the foreign exchange risk associated with certain foreign currency-denominated assets and liabilities, as well as the Corporation’s investments in foreign subsidiaries.
Foreign exchange contracts, which include spot and forward contracts, represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreedupon settlement date.
Exposure to loss on these contracts will increase or decrease over their respective lives as currency exchange and interest rates fluctuate.
## Table 1 ##
(1) Excludes total return swaps as they are not specifically linked to a credit index or credit event.
(2) The Corporation considers ratings of BBB- or higher to meet the definition of investment grade.
(3) Includes non-rated credit derivative instruments
The following table presents the components of All Other’s equity investment income and a reconciliation to the total consolidated equity investment income for 2008 and 2007.
## Table 2 ##
Equity investment income decreased $3.5 billion primarily due to losses from our Principal Investing portfolio attributable to the lack of liquidity in the marketplace.
In addition, we incurred other-than-temporary impairment losses on AFS marketable equity securities of $661 million which included writedowns on Fannie Mae and Freddie Mac preferred securities and a number of other equity securities where we did not believe that the declines in value would be recoverable.
All other income (loss) decreased due to the absence of the $1.5 billion gain on the sale of our Marsico business during 2007 partially offset by losses in 2007 of $394 million on securities after they were purchased at fair value from certain cash funds managed within GWIM.
In 2008, losses on securities purchased from cash funds were recorded within GWIM.
In addition, All Other’s results were adversely impacted by the absence of earnings due to the sale of certain businesses and foreign operations in 2007.
These decreases were partially offset by increases in card income driven by the funds transfer pricing allocations discussed in net interest income.
Further, losses were partially offset by increases in gains on sales of mortgage-backed securities and collateralized mortgage obligations.
Provision for credit losses increased $3.2 billion to $2.9 billion primarily due to higher credit costs related to our ALM residential mortgage portfolio reflective of deterioration in the housing markets and the impacts of a slowing economy.
Additionally, deterioration in our Countrywide discontinued real estate portfolio subsequent to the July 1, 2008 acquisition as well as the absence of 2007 reserve reductions also contributed to the increase in provision.
Merger and restructuring charges increased $525 million to $935 million due to the integration costs associated with the Countrywide and LaSalle acquisitions.
For additional information on merger and restructuring charges, see Note 2 – Merger and Restructuring Activity to the Consolidated Financial Statements.
Off- and On-Balance Sheet Arrangements In the ordinary course of business, we support our customers’ financing needs by facilitating their access to the commercial paper market.
In addition, we utilize certain financing arrangements to meet our balance sheet management, funding and liquidity needs.
For additional information on our liquidity risk, see Liquidity Risk and Capital Management beginning on page 55.
These activities utilize SPEs, typically in the form of corporations, limited liability companies, or trusts, which raise funds by issuing short-term commercial paper or similar instruments to third party investors.
These SPEs typically hold various types of financial assets whose cash flows are the primary source of repayment for the liabilities of the SPEs.
Investors have recourse to the assets in the SPE and often benefit from other credit enhancements, such as overcollateralization in the form of excess assets in the SPE, liquidity facilities, and other arrangements.
As a result, the SPEs can typically obtain a favorable credit rating from the rating agencies, resulting in lower financing costs for our customers.
We have liquidity agreements, SBLCs or other arrangements with the SPEs, as described below, under which we are obligated to provide funding in the event of a market disruption or other specified event or otherwise provide credit support to the entities (hereinafter referred to as liquidity exposure).
We manage our credit risk and any market risk on these arrangements by subjecting them to our normal underwriting and risk management processes.
Our credit ratings and changes thereto will affect the borrowing cost and liquidity of these SPEs.
In addition, significant changes in counterparty asset valuation and credit standing may also affect the ability of the SPEs to issue commercial paper.
The contractual or notional amount of these commitments as presented in Table 8, represents our maximum possible funding obligation and is not, in management’s view, representative of expected losses or funding requirements.
Management’s Discussion and Analysis Net revenues in Equities were $8.26 billion for 2011, 2% higher than 2010.
During 2011, average volatility levels increased and equity prices in Europe and Asia declined significantly, particularly during the third quarter.
The increase in net revenues reflected higher commissions and fees, primarily due to higher market volumes, particularly during the third quarter of 2011.
In addition, net revenues in securities services increased compared with 2010, reflecting the impact of higher average customer balances.
Equities client execution net revenues were lower than 2010, primarily reflecting significantly lower net revenues in shares.
The net gain attributable to the impact of changes in our own credit spreads on borrowings for which the fair value option was elected was $596 million ($399 million and $197 million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for 2011, compared with a net gain of $198 million ($188 million and $10 million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for 2010.
Institutional Client Services operated in an environment generally characterized by increased concerns regarding the weakened state of global economies, including heightened European sovereign debt risk, and its impact on the European banking system and global financial institutions.
These conditions also impacted expectations for economic prospects in the United States and were reflected in equity and debt markets more broadly.
In addition, the downgrade in credit ratings of the U. S.  government and federal agencies and many financial institutions during the second half of 2011 contributed to further uncertainty in the markets.
These concerns, as well as other broad market concerns, such as uncertainty over financial regulatory reform, continued to have a negative impact on our net revenues during 2011.
Operating expenses were $12.84 billion for 2011, 14% lower than 2010, due to decreased compensation and benefits expenses, primarily resulting from lower net revenues, lower net provisions for litigation and regulatory proceedings (2010 included $550 million related to a settlement with the SEC), the impact of the U. K.  bank payroll tax during 2010, as well as an impairment of our NYSE DMM rights of $305 million during 2010.
These decreases were partially offset by higher brokerage, clearing, exchange and distribution fees, principally reflecting higher transaction volumes in Equities.
Pre-tax earnings were $4.44 billion in 2011, 35% lower than 2010.
Investing & Lending Investing & Lending includes our investing activities and the origination of loans to provide financing to clients.
These investments and loans are typically longer-term in nature.
We make investments, directly and indirectly through funds that we manage, in debt securities and loans, public and private equity securities, real estate, consolidated investment entities and power generation facilities.
The table below presents the operating results of our Investing & Lending segment.
## Table 3 ##
2012 versus 2011.
Net revenues in Investing & Lending were $5.89 billion and $2.14 billion for 2012 and 2011, respectively.
During 2012, Investing & Lending net revenues were positively impacted by tighter credit spreads and an increase in global equity prices.
Results for 2012 included a gain of $408 million from our investment in the ordinary shares of ICBC, net gains of $2.39 billion from other investments in equities, primarily in private equities, net gains and net interest income of $1.85 billion from debt securities and loans, and other net revenues of $1.24 billion, principally related to our consolidated investment entities.
If equity markets decline or credit spreads widen, net revenues in Investing & Lending would likely be negatively impacted.
Operating expenses were $2.67 billion for 2012, essentially unchanged compared with 2011.
Pre-tax earnings were $3.23 billion in 2012, compared with a pre-tax loss of $531 million in 2011.

Tables referenced above, in order (Table 0 first):
<table><tr><td>(Dollars in millions)</td><td>2008</td><td>2007</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td> Allowance for loan and lease losses, January 1</td><td>$11,588</td><td>$9,016</td><td>$8,045</td><td>$8,626</td><td>$6,163</td></tr><tr><td> Adjustment due to the adoption of SFAS 159</td><td>–</td><td>-32</td><td>–</td><td>–</td><td>–</td></tr><tr><td> Loans and leases charged off</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>-964</td><td>-78</td><td>-74</td><td>-58</td><td>-62</td></tr><tr><td>Home equity</td><td>-3,597</td><td>-286</td><td>-67</td><td>-46</td><td>-38</td></tr><tr><td>Discontinued real estate</td><td>-19</td><td>n/a</td><td>n/a</td><td>n/a</td><td>n/a</td></tr><tr><td>Credit card – domestic</td><td>-4,469</td><td>-3,410</td><td>-3,546</td><td>-4,018</td><td>-2,536</td></tr><tr><td>Credit card – foreign</td><td>-639</td><td>-453</td><td>-292</td><td>–</td><td>–</td></tr><tr><td>Direct/Indirect consumer</td><td>-3,777</td><td>-1,885</td><td>-857</td><td>-380</td><td>-344</td></tr><tr><td>Other consumer</td><td>-461</td><td>-346</td><td>-327</td><td>-376</td><td>-295</td></tr><tr><td>Total consumer charge-offs</td><td>-13,926</td><td>-6,458</td><td>-5,163</td><td>-4,878</td><td>-3,275</td></tr><tr><td>Commercial – domestic<sup>-1</sup></td><td>-2,567</td><td>-1,135</td><td>-597</td><td>-535</td><td>-504</td></tr><tr><td>Commercial real estate</td><td>-895</td><td>-54</td><td>-7</td><td>-5</td><td>-12</td></tr><tr><td>Commercial lease financing</td><td>-79</td><td>-55</td><td>-28</td><td>-315</td><td>-39</td></tr><tr><td>Commercial – foreign</td><td>-199</td><td>-28</td><td>-86</td><td>-61</td><td>-262</td></tr><tr><td>Total commercial charge-offs</td><td>-3,740</td><td>-1,272</td><td>-718</td><td>-916</td><td>-817</td></tr><tr><td>Total loans and leases charged off</td><td>-17,666</td><td>-7,730</td><td>-5,881</td><td>-5,794</td><td>-4,092</td></tr><tr><td> Recoveries of loans and leases previously charged off</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>39</td><td>22</td><td>35</td><td>31</td><td>26</td></tr><tr><td>Home equity</td><td>101</td><td>12</td><td>16</td><td>15</td><td>23</td></tr><tr><td>Discontinued real estate</td><td>3</td><td>n/a</td><td>n/a</td><td>n/a</td><td>n/a</td></tr><tr><td>Credit card – domestic</td><td>308</td><td>347</td><td>452</td><td>366</td><td>231</td></tr><tr><td>Credit card – foreign</td><td>88</td><td>74</td><td>67</td><td>–</td><td>–</td></tr><tr><td>Direct/Indirect consumer</td><td>663</td><td>512</td><td>247</td><td>132</td><td>136</td></tr><tr><td>Other consumer</td><td>62</td><td>68</td><td>110</td><td>101</td><td>102</td></tr><tr><td>Total consumer recoveries</td><td>1,264</td><td>1,035</td><td>927</td><td>645</td><td>518</td></tr><tr><td>Commercial – domestic<sup>-2</sup></td><td>118</td><td>128</td><td>261</td><td>365</td><td>327</td></tr><tr><td>Commercial real estate</td><td>8</td><td>7</td><td>4</td><td>5</td><td>15</td></tr><tr><td>Commercial lease financing</td><td>19</td><td>53</td><td>56</td><td>84</td><td>30</td></tr><tr><td>Commercial – foreign</td><td>26</td><td>27</td><td>94</td><td>133</td><td>89</td></tr><tr><td>Total commercial recoveries</td><td>171</td><td>215</td><td>415</td><td>587</td><td>461</td></tr><tr><td>Total recoveries of loans and leases previously charged off</td><td>1,435</td><td>1,250</td><td>1,342</td><td>1,232</td><td>979</td></tr><tr><td>Net charge-offs</td><td>-16,231</td><td>-6,480</td><td>-4,539</td><td>-4,562</td><td>-3,113</td></tr><tr><td>Provision for loan and lease losses</td><td>26,922</td><td>8,357</td><td>5,001</td><td>4,021</td><td>2,868</td></tr><tr><td>Other<sup>-3</sup></td><td>792</td><td>727</td><td>509</td><td>-40</td><td>2,708</td></tr><tr><td>Allowance for loan and lease losses, December 31</td><td>23,071</td><td>11,588</td><td>9,016</td><td>8,045</td><td>8,626</td></tr><tr><td> Reserve for unfunded lending commitments, January 1</td><td>518</td><td>397</td><td>395</td><td>402</td><td>416</td></tr><tr><td>Adjustment due to the adoption of SFAS 159</td><td>–</td><td>-28</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Provision for unfunded lending commitments</td><td>-97</td><td>28</td><td>9</td><td>-7</td><td>-99</td></tr><tr><td>Other<sup>-4</sup></td><td>–</td><td>121</td><td>-7</td><td>–</td><td>85</td></tr><tr><td>Reserve for unfunded lending commitments, December 31</td><td>421</td><td>518</td><td>397</td><td>395</td><td>402</td></tr><tr><td> Allowance for credit losses, December 31</td><td>$23,492</td><td>$12,106</td><td>$9,413</td><td>$8,440</td><td>$9,028</td></tr><tr><td>Loans and leases outstanding at December 31<sup>-5</sup></td><td>$926,033</td><td>$871,754</td><td>$706,490</td><td>$573,791</td><td>$521,813</td></tr><tr><td>Allowance for loan and lease losses as a percentage of total loans and leases outstanding at December 31<sup>-5, 6</sup></td><td>2.49%</td><td>1.33%</td><td>1.28%</td><td>1.40%</td><td>1.65%</td></tr><tr><td>Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at December 31<sup>-6</sup></td><td>2.83</td><td>1.23</td><td>1.19</td><td>1.27</td><td>1.34</td></tr><tr><td>Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at December 31<sup>-5</sup></td><td>1.90</td><td>1.51</td><td>1.44</td><td>1.62</td><td>2.19</td></tr><tr><td>Average loans and leases outstanding at December 31<sup>-5, 6</sup></td><td>$905,944</td><td>$773,142</td><td>$652,417</td><td>$537,218</td><td>$472,617</td></tr><tr><td>Net charge-offs as a percentage of average loans and leases outstanding at December 31<sup>-5, 6</sup></td><td>1.79%</td><td>0.84%</td><td>0.70%</td><td>0.85%</td><td>0.66%</td></tr><tr><td>Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at December 31<sup>-5, 6</sup></td><td>141</td><td>207</td><td>505</td><td>532</td><td>390</td></tr><tr><td>Ratio of the allowance for loan and lease losses at December 31 to net charge-offs<sup>-6</sup></td><td>1.42</td><td>1.79</td><td>1.99</td><td>1.76</td><td>2.77</td></tr></table>
<table><tr><td>(Dollars in millions)</td><td> Maximum Payout/Notional<sup>-1</sup></td><td> Less than One Year</td><td> One to Three Years</td><td> Three to Five Years</td><td> Over Five Years</td><td> Carrying Value</td></tr><tr><td>Investment grade<sup>-2</sup></td><td>$801,886</td><td>$1,039</td><td>$13,062</td><td>$32,594</td><td>$29,153</td><td>$75,848</td></tr><tr><td>Non-investment grade<sup>-3</sup></td><td>198,148</td><td>1,483</td><td>9,222</td><td>19,243</td><td>13,012</td><td>42,960</td></tr><tr><td>Total</td><td>$1,000,034</td><td>$2,522</td><td>$22,284</td><td>$51,837</td><td>$42,165</td><td>$118,808</td></tr></table>
<table><tr><td>(Dollars in millions)</td><td>2008</td><td>2007</td></tr><tr><td>Principal Investing</td><td>$-84</td><td>$2,217</td></tr><tr><td>Corporate Investments</td><td>-520</td><td>445</td></tr><tr><td>Strategic and other investments</td><td>869</td><td>1,083</td></tr><tr><td>Total equity investment income included in All Other</td><td>265</td><td>3,745</td></tr><tr><td>Total equity investment income included in the business segments</td><td>274</td><td>319</td></tr><tr><td> Total consolidated equity investment income</td><td>$539</td><td>$4,064</td></tr></table>
<table><tr><td></td><td>Year Ended December</td></tr><tr><td><i>in millions</i></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>ICBC</td><td>$ 408</td><td>$ -517</td><td>$ 747</td></tr><tr><td>Equity securities (excluding ICBC)</td><td>2,392</td><td>1,120</td><td>2,692</td></tr><tr><td>Debt securities and loans</td><td>1,850</td><td>96</td><td>2,597</td></tr><tr><td>Other</td><td>1,241</td><td>1,443</td><td>1,505</td></tr><tr><td>Total net revenues</td><td>5,891</td><td>2,142</td><td>7,541</td></tr><tr><td>Operating expenses</td><td>2,666</td><td>2,673</td><td>3,361</td></tr><tr><td>Pre-tax earnings/(loss)</td><td>$3,225</td><td>$ -531</td><td>$4,180</td></tr></table>

Question: What will Allowance for loan and lease losses, January 1 be like in 2009 if it develops with the same increasing rate as current? (in millions)
Answer: 14893.7
Reasoning program: subtract(11588,9016), divide(#0,9016), add(1,#1), multiply(#2,11588)