Summary of STATE STREET CORP

Item 8.01. Other Events.

In addition to furnishing the disclosure provided in Item 2.02, we are filing this Form 8-K for the purposes of updating our risk factor disclosures. Unless otherwise indicated or unless the context requires otherwise, all references in this Form 8-K to "State Street," "we," "us," "our," or similar terms means State Street Corporation and its subsidiaries on a consolidated basis.

Risk Factors

This Form 8-K and other reports filed by us under the Securities Exchange Act of 1934 or registration statements filed by us under the Securities Act of 1933 contain statements that are considered "forward looking statements" within the meaning of United States securities laws. In addition, State Street and its management may make other written or oral communications from time to time that contain forward-looking statements. Forward-looking statements, including statements about industry trends, management's future expectations and other matters that do not relate strictly to historical facts, are based on assumptions by management, and are often identified by such forward-looking terminology as "expect," "look," "believe," "anticipate," "estimate," "seek," "may," "will," "trend," "target," and "goal" or similar statements or variations of such terms. Forward-looking statements may include, among other things, statements about State Street's confidence in its strategies and its expectations about financial performance, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings.

Forward-looking statements are subject to various risks and uncertainties, which change over time, are based on management's expectations and assumptions at the time the statements are made, and are not guarantees of future results. Management's expectations and assumptions, and the continued validity of the forward-looking statements, are subject to change due to a broad range of factors affecting the national and global economies, the equity, debt, currency and other financial markets, as well as factors specific to State Street and its subsidiaries, including State Street Bank. Factors that could cause changes in the expectations or assumptions on which forward-looking statements are based include, but are not limited to:

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º the financial strength of the counterparties with which we or our clients do business and with which we have investment or financial exposure;

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º the liquidity of the U.S. and international securities markets, particularly the markets for fixed-income securities, and the liquidity requirements of our customers;

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º potential changes to the competitive environment due to the effects of consolidation, regulation and perceptions of State Street as a suitable service provider or counterparty;

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º the level and volatility of interest rates, particularly in the United States, Europe and the Asia/Pacific region; and the performance and volatility of securities, credit, currency and other markets in the United States and internationally;

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º economic conditions and monetary and other governmental actions designed to address the level and volatility of interest rates and the volatility of securities, currency and other markets in the United States and internationally;

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º our ability to measure the fair value of securities in our investment securities portfolio and in the asset-backed commercial paper conduits we sponsor, particularly given current market conditions for many of these securities;

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º the credit quality and credit agency ratings of the securities in our investment securities portfolio, a deterioration or downgrade of which could lead to other-than-temporary impairment of the respective securities and the recognition of an impairment loss, the maintenance of credit agency ratings for our debt obligations as well as the level of credibility of credit agency ratings;

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º our ability to attract non-interest bearing deposits and other low-cost funds;

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º the possibility that changes to accounting rules or in market conditions or asset performance may require any off-balance sheet activities, including our asset-backed commercial paper conduits to be consolidated into our financial statements, requiring the recognition of associated losses, if any;

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º the results of litigation and similar disputes and, in particular, the effect that current or potential litigation may have on our reputation and State Street Global Advisors', or SSgA's, reputation, and our ability to attract and retain customers; and the possibility that the ultimate costs of the legal exposure associated with certain of SSgA's actively managed fixed-income strategies may exceed or be below the level of the related reserve, in view of the uncertainties of the timing and outcome of litigation and the amounts involved;

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º the possibility of further developments of the nature that previously gave rise to the legal exposure associated with certain of SSgA's actively managed fixed-income and other investment strategies;

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º our ability to integrate acquisitions into our business, including the acquisition of Investors Financial Services Corp., or Investors Financial;

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º the performance and demand for the products and services we offer, including the level and timing of withdrawals from our collective investment products;

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º the enactment of legislation and changes in regulation and enforcement that impact us and our customers, as well as the effects of legal and regulatory proceedings, including litigation;

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º our ability to continue to grow revenue, control expenses and attract the capital necessary to achieve our business goals and comply with regulatory requirements;

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º our ability to navigate systemic risks and control operating risks;

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º our ability to obtain quality and timely services from third parties with which we contract;

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º trends in the globalization of investment activity and the growth on a worldwide basis in financial assets and the resulting sovereign and monetary policy risks;

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º trends in governmental and corporate pension plans and savings rates;

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º changes in accounting standards and practices, including changes in the interpretation of existing standards, that impact our consolidated financial statements; and

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º changes in tax legislation and in the interpretation of existing tax laws by U.S. and non-U.S. tax authorities that impact the amount of taxes due.

Therefore, actual outcomes and results may differ materially from what is expressed in our forward-looking statements and from our historical financial results due to the factors discussed above, below and elsewhere in this Form 8-K or disclosed in our other Securities and Exchange Commission, or SEC, filings. Forward-looking statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the time this Form 8-K is filed with the SEC. State Street undertakes no obligation to revise the forward-looking statements contained in this Form 8-K to reflect events after the time it is filed with the SEC. The factors discussed above and below are not intended to be a complete summary of all risks and uncertainties that may affect our businesses. Though we strive to monitor and mitigate risk, we cannot anticipate all potential economic, operational and financial developments that may adversely impact our operations and our financial results.

Forward-looking statements should not be viewed as predictions, and should not be the primary basis upon which investors evaluate State Street. Any investor in State Street should consider all risks and uncertainties disclosed in our SEC filings, including this and our other reports on Forms 8-K, 10-K and 10-Q and our registration statements under the Securities Act of 1933, all of which are accessible on the SEC's website at www.sec.gov or on our website at www.statestreet.com.

The following is a discussion of risk factors applicable to State Street.

Recent Market Disruptions and Related Governmental Actions

Our businesses are affected by global economic conditions, political uncertainties and volatility and other developments in the financial markets. Factors such as interest rates and commodities prices, regional and international rates of economic growth, inflation, political instability, the liquidity and volatility of fixed-income, equity, credit, currency, derivative and other financial markets, and investor confidence can significantly affect the businesses in which we and our customers are engaged. Such factors have affected, and may further unfavorably affect, both regional and worldwide economic growth, creating adverse effects on many companies, including us, in ways that are not predictable or that we may fail to anticipate.

Since mid-2007, global credit and other financial markets have suffered substantial stress, volatility, illiquidity and disruption. These forces reached unprecedented levels in September and October 2008, resulting in the bankruptcy or acquisition of, or government assistance to, several major domestic and international financial institutions. These events have significantly diminished overall confidence in the financial markets and in financial institutions, generally. This reduced confidence could further exacerbate the overall market disruptions and risks to market participants, including State Street.

The recent market developments and the potential for increased and continuing disruptions present considerable risks to our businesses and operations. Since September 2008, for example, we have managed our counterparty and business exposure for the bankruptcies of Lehman Brothers Holdings Inc. and its affiliates, or Lehman, and Washington Mutual Inc. and its affiliates, although we have recorded a $200 million reserve in relation to Lehman. We also face the increased risk of potential bankruptcies or credit deterioration of other major financial institutions, some of with which we or our clients have substantial relationships. Also during this time, several unaffiliated money market funds have suffered losses and a money market fund failed to maintain a constant net asset value of $1.00. Events of this nature affecting our counterparties and customers have the potential to result in significant exposures, whether counterparty, credit or otherwise, to most or all of our businesses, including, in particular, custody, foreign exchange trading brokerage activities, securities

finance and investment management. During this period, we also experienced substantial inflows of liquid assets, particularly in terms of deposits; however, the contraction in the number of counterparties for which we had a favorable credit assessment made it difficult to invest, even on an overnight basis, all of our available liquidity, which adversely impacts the rate of return that we can earn on these assets. At the same time, we funded higher than normal levels of overdrafts by mutual funds and other collective investment vehicles, with particular liquidity requirements by money market funds. These higher than normal demands for liquidity from our customers may continue. Our asset-backed commercial paper conduit program experienced significantly reduced demand for its commercial paper financing, resulting in our purchasing historically high levels of commercial paper from our conduits and holding it on our balance sheet. See "Liquidity and Balance Sheet Risk-Asset-Backed Commercial Paper Conduits."

Subsequent to September 30, 2008 market conditions continued to worsen, and in some areas of the market, the deterioration of conditions accelerated. Further deterioration or a continuation of recent market conditions is likely to lead to a continued decline in the value of assets under management and custody, which would reduce our asset-based fee revenue and may adversely impact other transaction-based revenue, such as securities finance revenue, and the volume of transactions that we execute for our customers.

Among the issues that have arisen in the fixed-income market during the recent weeks are concerns about money market funds and cash collateral pools. The issues have arisen in part as a result of a money market fund failing to maintain a net asset value of $1.00, significant outflows from money market funds generally, high profile terminations of lender participation in securities lending programs, Federal Reserve and Treasury programs intended to support these products and support by some sponsors of their products following disclosures that the funds held material positions in certain issuers that have defaulted or been downgraded. SSgA is a leading manager of both money market, cash collateral and other cash products, with approximately $595.5 billion under management in those products as of September 30, 2008. While during the past month our funds have neither required any financial support nor incurred any losses in connection with any defaults, we have experienced increased redemption activity as the money market funds and collateral pools have accommodated the need to return collateral as the market value of securities on loan has declined and as participants in our lending program have reduced or terminated their lending. For clients that invest directly or indirectly in certain of the collateral pools and seek to terminate participation in lending programs, we have required, in accordance with the applicable client arrangements, that these withdrawals from the collateral pools take the form of in-kind distributions of securities. If the level of redemption activity persists at above normal levels, it could become more difficult to manage the liquidity requirements of these funds, and we may support the liquidity of these funds. Although we are entitled to make distributions in-kind, clients have in some cases sought, and may in the future seek, reimbursement for any loss that they incur in connection with the disposition of such securities.

In addition to the impact on the market value of client portfolios, the illiquidity and volatility of both the global fixed-income and equity markets have negatively affected the ability of SSgA to manage client inflows and outflows from other pooled investment vehicles. The lack of liquidity in fixed-income markets has made it difficult in certain cases to meet client redemption requests. The extreme volatility in the equity markets has led to potential for the return on passive and quantitative products deviating from their target return. The temporary closures of securities exchanges in certain foreign markets such as Brazil and Russia create a risk that client redemptions in SSgA pooled investment vehicles will result in significant tracking error and underperformance relative to stated benchmarks.

In response to recent market disruptions, legislators and financial regulators implemented a number of mechanisms designed to add stability to the financial markets, including the provision of direct and indirect assistance to distressed financial institutions, assistance by the banking authorities in arranging acquisitions of weakened banks and broker-dealers, implementation of programs by the

Federal Reserve to provide liquidity to the commercial paper markets, including the Boston Federal Reserve Bank's Asset-Backed Commercial Paper Money Market Liquidity Facility, or AMLF, and Commercial Paper Funding Facility programs, and temporary prohibitions on short sales of certain financial institution securities. On October 3, 2008, President Bush signed into law the Emergency Economic Stabilization Act of 2008, or EESA, which, among other things, empowers the Secretary of the Treasury to purchase from financial institutions up to $700 billion of troubled assets, including commercial and residential mortgages and related securities. On October 14, 2008, the U.S. Secretary of the Treasury announced the TARP Capital Purchase Program, a program in which we have agreed to participate under which Treasury has allocated $250 billion of the funds available under EESA for the purchase of equity interests in qualifying financial institutions. The overall effects of these and other legislative and regulatory efforts on the financial markets is uncertain, and they may not have the intended stabilization effects. In addition to these actions in the United States, several European nations have taken regulatory and other steps to support financial institutions, guarantee deposits and to seek to stabilize the financial markets. While these measures have been taken to support the markets, these actions may have unintended consequences on the global financial system or our businesses, including reducing competition, increasing the general level of uncertainty in the markets or, in the case of non-U.S. jurisdictions, favoring certain domestic institutions or depositors. Should these or other legislative or regulatory initiatives fail to stabilize and add liquidity to the financial markets, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Even if legislative or regulatory initiatives or other efforts successfully stabilize and add liquidity to the financial markets, we may need to modify our strategies, businesses or operations, and we may incur increased capital requirements and constraints or additional costs in order to satisfy new regulatory requirements or to compete in a changed business environment. For example, temporary prohibitions and restrictions on short sales of securities designed to address perceived abuses have impacted the value of securities on loan, and continued reductions in the overall volume of short sales likely would decrease our securities finance revenues. In addition, media and regulatory focus upon short selling and losses incurred in securities finance programs sponsored by other financial institutions has caused some institutional investors to reduce or eliminate their securities finance programs. If such a trend were to be more than temporary or if future regulation affects our business model or the demand for our services, both our income from securities finance operations and the liquidity and market value of the collateral pools in which our customers invest may be adversely affected. In addition, further consolidation within the financial services industry of customers and viable counterparties could potentially result in downward pricing pressure across our businesses. It is uncertain what effects recently enacted or future legislation or regulatory initiatives will have on us. Given the volatile nature of the current market disruption and the uncertainties underlying efforts to mitigate or reverse the disruption, we may not timely anticipate or manage existing, new or additional risks, contingencies or developments, including regulatory developments and trends in new products and services, in the current or future environment. Our failure to do so could materially and adversely affect our business, financial condition, results of operations and prospects.

Counterparty and Credit Risk

The financial markets generally are characterized by extensive interconnections among financial institutions. This is particularly true for several of our lines of business, including Treasury operations, currency and other trading and securities lending. These interconnections present significant risks to us and our customers as the failure or perceived weakness of any of our counterparties has the potential to expose us to risk of loss. Other financial institutions, including banks, broker-dealers and insurance companies, have historically been our most significant counterparties.

Our focus on large institutional investors and their businesses requires that we assume secured and unsecured credit and counterparty risk, both on- and off-balance sheet, in a variety of forms. We may experience significant intra- and inter-day credit exposure through settlement-related or redemption-related extensions of credit. The degree of the demand for such overdraft credits tends to increase during periods of market turbulence as investors in collective investment vehicles for which we act as custodian may engage in significant redemption activity that was not anticipated by the fund's manager. From time to time, we may assume concentrated credit risk at the individual obligor, counterparty, guarantor, industry and/or country level, thereby potentially exposing us to a single market or political event or a correlated set of events. We, and our clients, tend to have concentrated counterparty exposure to broker-dealers and other financial institutions. The current instability of the financial markets has resulted in many financial institutions becoming significantly less creditworthy, and we are exposed to the related counterparty risks. The credit quality of our on- and off-balance sheet exposures may be affected by many factors, such as economic and business conditions or deterioration in the financial condition of an individual counterparty, group of counterparties or asset classes. If a significant economic downturn occurs in either a country or a region, or we experience a default by a significant individual counterparty, we could incur financial losses that could materially adversely affect our business, financial condition and results of operations.

We seek to mitigate those risks in several ways, including by establishing cross product exposure limits to each counterparty and diversifying our counterparties, subject to our primary concern of limiting our exposure to financial institutions that present limited credit risks; and requiring that certain types of transactions, such as securities loans or repurchase arrangements, be supported by collateral. Given the limited number of strong counterparties in the current market and the substantial excess liquidity, through deposits and other sources, that we have experienced during the recent financial disruption, it is not possible to mitigate all of our and our customers' counterparty credit risk. The combinations of financial service firms announced in the third and fourth quarters of 2008 have increased the concentration of our counterparty risk. We are also generally not able to net exposures across counterparties that are affiliated entities; as a consequence, we may incur a loss in relationship to one entity even though our exposure to one of its affiliates is over-collateralized. Moreover, not all of our counterparty exposure is secured, and when our exposure is secured, the realizable market value of the collateral may be less than the value of the secured obligations. This risk may be particularly acute if we are required to sell the collateral into an illiquid or temporarily impaired market. In some cases, we have indemnified customers against a shortfall in the value of collateral. In addition, the greater the mismatch between the duration of our obligation to and our rights against other financial institutions, the more significant the risk of interdependencies become.

For example, the Lehman bankruptcy announced in September 2008 necessitated the unwinding of a number of positions in which Lehman was the counterparty where we acted as principal or as agent on behalf of our customers. The positions in which we acted as principal consist primarily of forward foreign exchange contracts and interest rate swap positions. The positions in which we acted as agent on behalf of our customers consist primarily of the securities lending arrangements, repurchase arrangements and sub-custodial and prime brokerage arrangements, which are further discussed below. The money market funds and cash collateral pools that SSgA manages do not hold any obligations issued by Lehman.

All of our clients' securities lending exposure to Lehman is collateralized. The unwinding of securities lending positions generally entails both the purchase in the market of the securities on loan and the disposal of collateral in order to offset the costs of the market purchase. We have returned all securities out on loan to our customers either by entering into orderly unwind arrangements with Lehman or by purchasing securities on loan in the applicable markets. Most of the collateral we held on behalf of clients has been or is in the process of being liquidated, and we anticipate that the cash

generated will be sufficient to cover the cost of unwinding these positions. There can be no assurance given current market conditions that this will be the case.

Our clients often purchase securities, or collateral, from a broker-dealer under repurchase arrangements as a method of reinvesting the cash collateral they receive from lending their securities. Under these arrangements, the broker-dealer is obligated to repurchase the collateral from the client at the same price at some point in the future. The anticipated value of the collateral exceeds the broker-dealer's repayment obligation. In certain cases, we agree to indemnify our clients for the amount of the repurchase obligations. In the case of some of our customers that entered into repurchase agreements with Lehman, we indemnified obligations totaling $1 billion and have since paid this amount to our customers. Upon such payments, we took possession of the collateral subject to our customers' repurchase agreements with Lehman. This collateral consists of mortgages. In the current market environment, the value of this collateral is likely less than $1 billion. Based upon our current assessment of the likely proceeds to be received from the disposition or maturity of this collateral, we have established a reserve of $200 million to cover the potential loss. We are continuing to evaluate the mortgages held as collateral. Upon further evaluation, we may determine that it is necessary to increase the size of the reserve. In addition, upon disposition or maturity of the collateral, the loss incurred may be greater or less than the reserve established. It is possible that we will incur similar losses in the future to the extent that other counterparties to our customer's indemnified repurchase obligations default under those obligations and the realizable value of the underlying collateral is less than the amount of the obligations.

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