FHFA yesterday released changes to GSE stress testing paralleling those required of federal banking agencies under the 2018 reform law.  As a result, FHLBs – all below the $250 billion stress-test floor – come out from under these capital buffers unless FHFA mandates them on a case-by-case basis.  Fannie and Freddie need no longer contemplate an adverse scenario in addition to baseline and severely-adverse ones, but they remain subject to annual testing (an approach comparable to the standards now governing GSIBs).

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