Supervisory Capital Assessment Program (SCAP)

A one-time 2009 Federal Reserve stress test of the 19 largest U.S. bank holding companies to determine capital needs amid the financial crisis.

What is Supervisory Capital Assessment Program (SCAP)?

Conducted from February to May 2009 on firms with over $100 billion in assets (e.g., Bank of America, Citigroup), SCAP used a baseline and more adverse scenario with 8.9% unemployment and 3.3% GDP decline. It projected $600 billion in losses over two years, identifying a $75 billion capital shortfall across 10 banks. Banks raised $185 billion in capital post-results, exceeding requirements.

SCAP required Tier 1 common capital ratios of at least 4% under stress, leading to conversions like GMAC’s $3 billion preferred to common equity. It was paired with the Capital Assistance Program (CAP), offering Treasury convertible preferred stock, though unused as markets stabilized. The transparent methodology, including loss rates (e.g., 9.1% on first-lien mortgages), restored confidence, with the S&P 500 rising 35% in 2009.

SCAP paved the way for annual CCAR and DFAST, influencing global stress testing; its design estimated revenues at $363 billion against losses.