Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 48

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 13
Chunk 48
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. Risks are classified into the following categories:

n    Credit Risk; 

n    Market Risk;

n    Liquidity Risk;

n    Operational Risk;

n    Compliance Risk;

n    Legal Risk; 

n    Strategic Risk; and

n    Reputation Risk.

These risks are factored into our business decisions, as appropriate. For additional discussion of these and other risks facing our business, see Risk Factors. See MD&A - Liquidity and Capital Resources for a discussion of liquidity risk. 

Enterprise Risk Framework

The Risk Framework defines how we manage risk to achieve our mission, strategic, and business objectives. By serving as the basis for managing risk in a consistent, effective, and efficient manner, the Risk Framework supports our financial strength and safe and sound operations through a range of stressful conditions. The Risk Framework is implemented through the ERM Program, which consists of our enterprise-wide risk management practices and processes.

The Risk Framework includes the following components: 

n    Risk Culture - Risk culture is the set of corporate values, competencies, and behaviors related to risk taking and risk management at Freddie Mac. Management supports an effective risk culture by establishing clear risk objectives, assigning accountability, and setting a tone at the top so that employees feel empowered to challenge business decisions without fear of negative consequences. An effective risk culture promotes an environment where employees who take, accept, and manage risks for the company are risk aware, collaborative, and transparent.

n    Risk Governance - Risk governance is the set of corporate requirements and processes that must be followed to make and implement risk decisions across the company. Effective risk governance establishes a reporting and escalation path for risks and issues across the company. Freddie Mac’s risk governance structure provides forums for transparent communication of risks and issues, as well as risk management and control activities. Risk governance is established through:

l    Risk Authority - Authority to take or accept risk is vested in an individual employee. Individual business or functional risk officers may be assigned risk authority for specific risk areas and functions, as appropriate.

l    Corporate Risk Policies and Standards - Corporate risk policies and standards define roles and responsibilities with respect to risk management, establish limits to risk taking authority, and set forth escalation and reporting requirements.

l    Risk Governance Structure - The risk governance structure consists of management- and Board-level committees with roles and responsibilities formalized in their charters.

n    Risk Appetite - Risk appetite is the level of risk, both in aggregate and by risk type