Supervisory Capital Assessment Program

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See also Reform of the Federal Reserve.

GAO reports on the Supervisory Capital Assessment Program

The Supervisory Capital Assessment Program (SCAP) was established under the Capital Assistance Program (CAP)—a component of the Troubled Asset Relief Program (TARP)—to assess whether the 19 largest U.S. bank holding companies (BHC) had enough capital to withstand a severe economic downturn. Led by the Federal Reserve Board, federal bank regulators conducted a stress test to determine if these banks needed to raise additional capital, either privately or through CAP. The GAO has issued a report to: 1. describe the SCAP process and participants’ views of the process; 2. assess SCAP’s goals and results and BHCs’ performance; and3. identify how regulators and the BHCs are applying lessons learned from SCAP.

In preparing the report, the GAO reviewed SCAP documents, analyzed financial data and interviewed regulatory, industry and BHC officials. The report recommends that the Fed complete a final two-year SCAP analysis and apply lessons learned from SCAP to improve transparency of bank supervision, examiner guidance, risk identification and assessment and regulatory coordination. The Fed agreed with the recommendations and noted current actions that it has underway to address them. The Treasury also agreed with the report’s findings.

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