Program Purpose and Overview
When President Obama took office in 2009, Treasury was focused not only on preventing a collapse of the nation's banking system, but on restarting lending by banks. In order to do so, it was necessary to raise confidence that banks had sufficient resources to weather even a very adverse economic scenario to make it possible for them to raise additional private capital.
- The Supervisory Capital Assessment Program (SCAP) and the Capital Assistance Program (CAP) were established to ensure that our major banking institutions had adequate capital buffers to withstand losses and meet the credit needs of their customers in a more severe recession than was anticipated.
- The SCAP was a 'stress test' of the nation's 19 largest bank holding companies to determine the health of each institution. It was conducted in early 2009 and done in full view of the public. The CAP was established to provide additional assistance to any of those banks that were found to need but could not raise adequate private capital.
- Eighteen of the 19 participating banks were found to have adequate capital buffers, and therefore did not require any funding under CAP.
- CAP closed on November 9, 2009 without making any investments. And following the release of the stress test results, banks were able to raise hundreds of billions of dollars in private capital.