Citigroup Inc.

13. BROKERAGE RECEIVABLES AND BROKERAGEPAYABLESThe Company has receivables and payables for financial instrumentspurchased from and sold to brokers, dealers and customers. The Company isexposed to risk of loss from the inability of brokers, dealers or customers topay for purchases or to deliver the financial instruments sold, in which casethe Company would have to sell or purchase the financial instruments atprevailing market prices. Credit risk is reduced to the extent that an exchangeor clearing organization acts as a counterparty to the transaction.The Company seeks to protect itself from the risks associated withcustomer activities by requiring customers to maintain margin collateralin compliance with regulatory and internal guidelines. Margin levels aremonitored daily, and customers deposit additional collateral as required.Where customers cannot meet collateral requirements, the Company willliquidate sufficient underlying financial instruments to bring the customerinto compliance with the required margin level.Exposure to credit risk is impacted by market volatility, which may impairthe ability of clients to satisfy their obligations to the Company. Credit limitsare established and closely monitored for customers and brokers and dealersengaged in forwards, futures and other transactions deemed to be creditsensitive.Brokerage receivables and brokerage payables, which arise in the normalcourse of business, consisted of the following at December 31:In millions of dollars 2010 2009Receivables from customers $21,952 $24,721Receivables from brokers, dealers, and clearing organizations 9,261 8,913Total brokerage receivables $31,213 $33,634Payables to customers $36,142 $41,262Payables to brokers, dealers, and clearing organizations 15,607 19,584Total brokerage payables $51,749 $60,84614. TRADING ACCOUNT ASSETS AND LIABILITIESTrading account assets and Trading account liabilities, at fair value,consisted of the following at December 31:In millions of dollars 2010 2009Trading account assetsMortgage-backed securities (1)U.S. government-sponsored agency guaranteed $ 27,127 $ 20,638Prime 1,514 1,156Alt-A 1,502 1,229Subprime 2,036 9,734Non-U.S. residential 1,052 2,368Commercial 1,301 3,062Total mortgage-backed securities (1) $ 34,532 $ 38,187U.S. Treasury and federal agency securitiesU.S. Treasury $ 20,168 $ 28,938Agency obligations 3,418 2,041Total U.S. Treasury and federal agencies $ 23,586 $ 30,979State and municipal securities $ 7,493 $ 7,147Foreign government securities 88,311 72,769Corporate 51,586 52,378Derivatives (2) 50,213 58,879Equity securities 38,576 46,221Asset-backed securities (1) 7,759 4,089Other debt securities 15,216 32,124Total trading account assets $317,272 $342,773Trading account liabilitiesSecurities sold, not yet purchased $ 69,324 $ 73,406Derivatives (2) 59,730 64,106Total trading account liabilities $129,054 $137,512(1) The Company invests in mortgage-backed securities and asset-backed securities. Mortgagesecuritizations are generally considered VIEs. The Company’s maximum exposure to loss from theseVIEs is equal to the carrying amount of the securities, which is reflected in the table above. Formortgage-backed and asset-backed securitizations in which the Company has other involvement,information is provided in Note 22 to the Consolidated Financial Statements.(2) Presented net, pursuant to master netting agreements. See Note 23 to the Consolidated FinancialStatements for a discussion regarding the accounting and reporting for derivatives.205