Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 49

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 13
Chunk 49
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, within the company's risk capacity (the maximum amount of risk the enterprise can absorb before breaching capital, liquidity, and other constraints) that the Board of Directors and management are willing to assume to achieve the company's strategic goals. The risk appetite is integrated and aligned with the Company Strategic Plan, the consolidated business plan, and divisional business plans (collectively, the Annual Business Plan). The risk appetite consists of qualitative risk appetite statements and quantitative metrics with limits, and it is approved by the Board of Directors. FHFA as Conservator then approves the quantitative 

FREDDIE MAC  |  2024 Form 10-K47

Management's Discussion and AnalysisRisk Management

metrics with limits.

n    Risk Identification, Assessment, Control, and Monitoring Processes - Our ERM Program supports risk management through enterprise-wide practices and processes designed to identify, assess, control, monitor, and report on all risks, including material and emerging risks. 

n    Risk Profile - Risk profile is a point-in-time assessment of risks aggregated within and across each risk category using methodologies consistent with the company's risk appetite. The Risk Framework requires accurate and timely reporting needed to manage risks. Regular reporting is provided to senior management and to the Board of Directors, or appropriate Board committees, at an aggregate level to provide a comprehensive view of the company's risk position. Risk profile reporting includes adherence to management thresholds and established Board limits and potential or actual breaches; material and emerging risks; significant issues and their remediation status; and stress testing and scenario analysis. 

FHFA continues to increase supervisory expectations related to how risk is managed and overseen by management and the Board of Directors, and specifically the role of ERM in providing independent risk oversight and effective challenge. As a result, we must continue to invest in our risk management practices to meet these expectations.

Enterprise Risk Governance Structure 

We manage risk using a three lines model and our risk governance structure includes enterprise-wide oversight by the Board of Directors and its committees, the CRO, and senior management. Only legal risk is managed outside of the three lines model.

The first line consists of Business Divisions which are responsible, with support from our Enterprise divisions, for identifying, assessing, controlling, monitoring, and reporting on risks, including adherence to the established risk appetite and risk policies and standards that are approved by senior management and/or our Board of Directors or Board Committees.

The second line consists of ERM, which designs and implements the enterprise risk management program and Risk Framework, including corporate risk policies and standards