We also  met with Federal Reserve officials to discuss the stress test methodology  and results for the 19 largest U.S. bank holding companies and reviewed  related documents relevant to the Capital Assistance Program (CAP). 1). According to a Treasury official, as of June 12, 2009, Treasury has  not yet liquidated any CPP warrants in the financial markets. This survey will continue on a monthly basis going forward. These decisions raise a number of potential  concerns. The items published are similar to those already in use to evaluate  repurchase requests that had been received from smaller bank holding  companies, and include the following considerations   the bank holding company’s ability to continue to act as an intermediary  and spur lending to creditworthy households and businesses,   whether the bank holding company’s post-repurchase capital position is  consistent with the Federal Reserve’s supervisory expectations,   whether the bank holding company will maintain its financial and  management support for its subsidiary banks subsequent to repurchase,  and   whether the bank holding company and subsidiaries are in a position to  meet all of their funding and counterparty obligations without government  capital or utilization of the FDIC’s Temporary Liquidity Guarantee  Program. A public announcement of the selections will be made in June  2009. Treasury also noted that its  Financial Stability Plan provided the basis for its improved communication  strategy. 3). Treasury has made progress in developing a more routine process for  hiring OFS staff. The extent to which the institutions will disclose additional  information is unclear. Moreover, the Federal  Reserve did not provide OFS staff with information about SCAP prior to  its public release and has no plans to share ongoing information about any  of the SCAP institutions that continue to be CPP or CAP participants. Treasury has recognized the importance of reaching out to congressional  stakeholders on a regular and proactive basis and planned to do more to  ensure that all committees of jurisdiction receive regular communication  about TARP. However, until this strategy is fully implemented,  congressional stakeholders may not receive information in a consistent or  timely manner. In addition, although Treasury has said that the new  www.financialstability.gov Web site is a key component of its efforts to  improve communication on TARP, it has not yet taken steps to determine  whether the site is user-friendly or whether visitors to the site are finding  the information they seek. However, continued attention to  hiring remains important because some offices within OFS, such as the  offices of Homeownership and Risk and Compliance, continue to have a  number of vacancies that need to be filled as TARP programs become fully  implemented. Treasury has continued to build a network of contractors and financial  agents to support TARP administration and operations and has an  opportunity to enhance transparency through its existing reporting  mechanisms. Useful details are still lacking, however, on the  costs of procurement contracts and financial agency agreements, such as a  breakdown obligated and expenses for each entity. These contracts and  agreements are key tools OFS has used to help develop and administer its  TARP programs. By not providing this information, Treasury is missing an  opportunity to provide additional transparency about the cost of TARP  operations. Finally, to help improve the transparency of CAP—in particular the stress  tests results—we recommend that the Director of Supervision and  Regulation of the Federal Reserve consider periodically disclosing to the  public the aggregate performance of the 19 bank holding companies  against the more adverse scenario forecast numbers for the duration of the  2-year forecast period and whether or not the scenario needs to be revised. Appendix V: Synopsis of Citigroup’s Financial Condition

Citigroup, Inc. (Citigroup) is one of the few institutions that has  participated in multiple Troubled Asset Relief Program (TARP) programs.
Why GAO Did This Study

GAO's fifth report on the Troubled Asset Relief Program (TARP) follows up on prior recommendations. It also reviews (1) activities that had been initiated or completed under TARP as of June 12, 2009; (2) the Department of the Treasury's Office of Financial Stability's (OFS) hiring efforts and use of contractors; and (3) TARP performance indicators. To do this, GAO reviewed signed agreements and other relevant documentation and met with officials from OFS, contractors, and financial regulators.

What GAO Found

Treasury continued to operationalize its more recent programs, including the Capital Assistance Program (CAP). As part of this program, the Federal Reserve led the stress tests of the largest 19 U.S. bank holding companies, which revealed that about half needed to raise additional capital to keep them strongly capitalized and lending even if economic conditions worsen. Whether any of the institutions will have to participate in CAP has yet to be determined. While the Federal Reserve disclosed the stress test results, it has no plans to disclose information about the 19 institutions going forward. What information, if any, is disclosed will be left to the discretion of the affected institutions raising a number of concerns including potentially inconsistent or only selected information being disclosed. Moreover, the Federal Reserve had not developed a mechanism to share information with OFS about the ongoing condition of the 19 bank holding companies that continue to participate in TARP programs. According to Treasury, its Financial Stability Plan has provided a basis for its communication strategy. Treasury plans to more regularly communicate with congressional committees of jurisdiction about TARP. However, until this strategy is fully implemented, all congressional stakeholders will not be receiving information in a consistent or timely manner. A key component of the communication strategy is the new www.financialstability.gov Web site. While a goal of the new site is to provide the public with a more user friendly format, Treasury has not yet measured the public's satisfaction with the site. OFS has made progress in establishing its management infrastructure. Continued attention to hiring remains important because some offices within OFS, including the Office of the Chief Risk and Compliance Officer, continue to have a number of vacancies that will need to be filled as TARP programs are fully implemented. Treasury has also continued to build a network of contractors and financial agents to support TARP administration and operations. These contracts and agreements are key tools OFS has used to help develop and administer its TARP programs. Treasury has provided information to the public on procurement contracts and financial agency agreements, but has not included a breakdown of cost data by each entity. As a result, Treasury is missing an opportunity to provide additional transparency about TARP operations.