For purposes of this part, the following definitions apply:
Federal Home Loan Banks mean the Federal Home Loan Banks established under section 12 of the Federal Home Loan Bank Act (12 U.S.C. 1432). Each Bank is a regulated entity.
Federal Housing Finance Agency or FHFA means the agency established by 12 U.S.C. 4511.
Planning horizon means the period of time over which the stress projections must extend. The planning horizon cannot be less than nine quarters.
Regulated entities means, collectively, Fannie Mae, Freddie Mac, and the twelve Federal Home Loan Banks.
Scenarios are sets of economic and financial conditions used in the regulated entities' stress tests, including baseline, adverse, and severely adverse.
Stress test is a process to assess the potential impact on a regulated entity of economic and financial conditions (``scenarios'') on the consolidated earnings, losses, and capital of the regulated entity over a set planning horizon, taking into account the current condition of the regulated entity and the regulated entity's risks, exposures, strategies, and activities.