106 STAT. 3972 PUBLIC LAW 102-550—OCT. 28, 1992 Subtitle B—Required Capital Levels for Enterprises and Special Enforcement Powers 12 USC 4611. SEC. 1361. RISK-BASED CAPITAL LEVELS. Regulations. (a) RISK-BASED CAPITAL TEST.— The Director shall, by regulation, establish a risk-based capital test under this section for the enterprises. When applied to an enterprise, the risk-based capital test shall determine the amount of total capital for the enterprise that is sufficient for the enterprise to maintain positive capital during a 10-year period in which the following circumstances occur (in this section referred to as the stress period): (1) CREDIT RISK.—With respect to mortgages owned or guaranteed by the enterprise and other obligations of the enterprise, -losses occur throughout the United States at a rate of default and severity (based on any measurements of default reasonably related to prevailing practice for that industry in determining capital adequacy) reasonably related to the rate and severity that occurred in contiguous areas of the United States containing an aggregate of not less than 5 percent of the total poptdation of the United States that, for a period of not less than 2 years, experienced the highest rates of default and severity of mortgage losses, in compsirison with such rates of default and severity of mortgage losses in other such areas for any period of such duration. (2) INTEREST RATE RISK.— (A) IN GENERAL. — Interest rates decrease as described in subparagraph (B) or increase as described in subparagraph (C), whichever would require more capital for the enterprise. (B) DECREASES. —The 10-year constant maturity Treasury jrield decreases during the first year of the stress period and will remain at uie new level for the remainder of the stress period. The yield decreases to the lesser of— (i) 600 basis points below the average yield during the preceding 9 months, or (ii) 60 percent of the average yield during the preceding 3 years, but in no case to a yield less than 50 percent of the average jrield during the preceding 9 months. (C) INCREASES. —The 10-year constant maturity Treasury yield increases during the first year of the stress period and will remain at the new level for the remainder of the stress period. The jdeld increases to the greater of— (i) 600 basis points above the average yield during the preceding 9 months, or (ii) 160 percent of the average yield during the preceding 3 years, but in no case to a yield greater than 175 percent of the average yield during the preceding 9 months. (D) DIFFERENT TERMS TO MATURITY.—Yields of Treasury instruments with other terms to maturity will change relative to the 10-year constant maturity Treasury yield in patterns and for durations that are reasonably related
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