Freddie Mac 2015 Annual Report Download - page 87

Management's Discussion and Analysis Risk Management | Overview
Freddie Mac 2015 Form 10-K 85
Lines of Defense
First Line
Business Units Second Line ERM Division
Compliance Division
Third Line
Internal Audit Division
RISK
CATEGORY
Credit Identify, assess,
measure and manage
risk within established
credit policy guidelines
Establish key risk
indicators and various
other metrics
Establish credit risk
appetite, policy, limits,
monitoring metrics and
credit risk decision
review process
Evaluates the design
adequacy, operational
effectiveness, and
efficiency of governance,
risk management, and
control processes,
including, but not limited
to, the manner in which
the first and second lines
of defense achieve risk
management and control
objectives
Interest Rate and Other
Market Risks Identify, assess, measure and manage
duration gap, PMVS, and
other measures on a
daily basis, including
spread risk
Establish key risk
indicators and various
other metrics
Establish interest rate
and other market risks
appetite, policy, limits,
monitoring metrics and
assess measurement
methodologies
Liquidity Identify, assess,
measure and manage
cash balances and short-
and long-term liquidity
needs on a daily basis
Establish key risk
indicators and various
other metrics
Establish liquidity risk
appetite, policy, limits,
monitoring metrics and
assess measurement
methodologies
Operational Identify, assess,
measure and manage
risk, while establishing
and implementing
operational processes
and controls
Establish key risk
indicators and various
other metrics
Establish operational risk
appetite, policy, limits,
monitoring metrics and
evaluate loss event data
and perform root cause
analysis and testing