The 2009 Supervisory Capital Assessment Program was a comprehensive review of the financial health of 19 major US banks and thrifts. The program was designed to assess the capital levels of these institutions.
The program was initiated by the Board of Governors of the Federal Reserve System in response to the financial crisis of 2008. This was a major effort to restore confidence in the US banking system.
The participating institutions were required to submit detailed financial information and undergo a thorough review of their capital adequacy. This included a stress test to determine their ability to withstand potential economic downturns.
The results of the program were made public, and the participating institutions were required to raise additional capital if necessary. This helped to restore confidence in the US banking system and prevent further financial instability.
Test and Results
The Supervisory Capital Assessment Program (SCAP) was a comprehensive test designed to assess the financial health of 19 major bank holding companies in the US. The tests were conducted in 2009, a critical year in the midst of the Great Recession.
Ten of the banks failed the stress tests, indicating they would have had inadequate capital to meet their business needs during a financial crisis. However, every bank met the legally mandated capital requirements.
The SCAP test helped identify potential threats to the banking sector and put pressure on banks to maintain higher reserves. This was a crucial step in preventing another financial crisis.
Here are the 19 banks that underwent the SCAP test, ranked by their asset size:
The results of the SCAP test were publicly released, putting pressure on banks to maintain higher reserves.
Comptroller Dugan's Statement
Comptroller Dugan stated that the Supervisory Capital Assessment Program (SCAP) was designed to assess the capital of the 19 largest bank holding companies in the US.
The program aimed to ensure that these banks had sufficient capital to absorb potential losses and maintain stability in the financial system.
Comptroller Dugan emphasized the importance of transparency and disclosure in the SCAP process, stating that banks would be required to provide detailed information about their capital positions.
This information would be used to determine the amount of additional capital each bank would need to hold, and to ensure that they were in a position to absorb potential losses.
The SCAP program was a key component of the government's efforts to stabilize the financial system and restore confidence in the banking sector.
Official Release
The Official Release of the SCAP results is scheduled for Thursday, May 7, 2009 at 5pm EDT.
The Federal Reserve Board will release the results of the Supervisory Capital Assessment Program (SCAP) publicly on May 7, 2009.
Each of the 19 largest U.S. bank holding companies will have their individual and aggregate results reported under the "more adverse" scenario.
The SCAP results will include estimates of losses and loss rates across select categories of loans, resources available to absorb those losses, and the resulting necessary additions to capital buffers.
The estimates reported by the Federal Reserve represent values for a hypothetical 'what-if' scenario and are not forecasts of expected losses or revenues for the firms.
Any bank holding company needing to augment its capital buffer at the conclusion of the SCAP will have until June 8, 2009 to develop a detailed capital plan.
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