12 CFR 1238.2 – Definitions
Current as of: 2024 | Check for updates
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For purposes of this part, the following definitions apply:
Terms Used In 12 CFR 1238.2
- Baseline: Projection of the receipts, outlays, and other budget amounts that would ensue in the future without any change in existing policy. Baseline projections are used to gauge the extent to which proposed legislation, if enacted into law, would alter current spending and revenue levels.
Planning horizon means the period of time over which the stress projections must extend. The planning horizon cannot be less than nine quarters.
Scenarios are sets of economic and financial conditions used in the Enterprises’ stress tests, including baseline and severely adverse.
Stress test is a process to assess the potential impact on an Enterprise of economic and financial conditions (“scenarios”) on the consolidated earnings, losses, and capital of the Enterprise over a set planning horizon, taking into account the current condition of the Enterprise and the Enterprise’s risks, exposures, strategies, and activities.