not try to apportion losses to specific quarters within the period. moreover, at this point, the overall economy is likely to perform better than in the more adverse scenario. however, with those caveats, it is encouraging that, through the end of last year, the revenues of the scap banks have collectively reached about 60 per cent of the two - year estimates under the more adverse scenario while loan losses are at only about 40 per cent of estimates. although the banking organizations that participated in the scap have significantly improved their financial positions, they continue to face challenges. by the same token, regional and community banks, which also play a vital role in our financial system and economy, are dealing with challenges of their own. the number of regional and community institutions considered weak is still increasing, and their loan losses likely will remain elevated this year. the most significant areas of concern are residential mortgages and commercial real estate loans. also, with credit demand tepid and the economy still under stress, profitable lending opportunities have been relatively scarce for many of these banks. for logistical reasons – including the large number and diversity of smaller banks in the united states – we have not attempted a full - scale simultaneous stress test of these banks but instead have worked with them on an individual basis to evaluate their capital needs. although the results vary considerably across institutions, prospective losses are such that many of these organizations may need additional capital over the next few years. unfortunately, smaller banks generally have fewer alternatives than large banks for raising fresh capital and thus tend to rely on retained earnings for capital growth. recognizing these difficulties, we will continue to work closely with smaller banks as they rebuild their financial strength. for example, we continue to receive numerous proposals from private equity investors to take stakes in regional and community banks, and over the past two years we have approved many of these proposals, including some that bring both new capital and management to the organization and some that provide new capital through minority investments. lending to creditworthy borrowers a key objective of the stress assessments and our efforts with smaller institutions has been to restore confidence in the stability of our banking system, confidence that was lacking in early 2009. our goal, though, was to accomplish more than stability ; for example, in the scap, by setting reasonably ambitious capital targets, we hoped also to hasten the return to a better lending environment. clearly that objective has not yet been realized, as bank lending continues to contract and terms and conditions remain tight. consequently, restoring the

in the face of potentially large losses and to reduce the uncertainty about potential losses and earnings prospects. to achieve these objectives, for each banking organization included in the scap, supervisors estimated potential losses for each major category of assets, as well as revenue expectations, under a worse - than - expected macroeconomic scenario for 2009 and 2010. importantly, the scap was not a solvency test ; rather, the exercise was intended to determine whether the tested firms would have sufficient capital remaining to continue lending if their losses were larger than expected. the assessment included all domestic bank holding companies with at least $ 100 billion in assets at the end of 2008 – 19 firms collectively representing about two - thirds of u. s. banking assets. see ben s. bernanke ( 2009 ), “ the supervisory capital assessment program ”, speech delivered at the federal reserve bank of atlanta 2009 financial markets conference, jekyll island, ga., may 11. the scap represented an extraordinary effort on the part of federal reserve staff and the staff of the other banking agencies. in a relatively short time, the supervisors had to gather and evaluate an enormous amount of information. extensive back - and - forth with the banks was necessary to ensure that the information provided was comparable and complete. moreover, to achieve the greatest possible consistency of results across institutions, supervisors supplemented judgmental assessments by banks and examiners with objective, model - based estimates for losses and revenues that could be applied across firms. by statistically analyzing the relationship of loss estimates to portfolio characteristics, for example, supervisors were able to estimate potential losses for each firm, which could then be compared to independent examiner judgments and the firms ’ own estimates. the assessment found that if the economy were to track the specified “ more adverse ” scenario, losses at the 19 firms during 2009 and 2010 could total about $ 600 billion. after taking account of potential resources to absorb those losses and capital that had already been raised or was contractually committed, and after establishing the size of capital buffers for the end of the two - year horizon that we believed would support stability and continued lending, we determined that 10 of the 19 institutions would collectively need to raise an additional $ 75 billion in common equity. firms were asked to raise the capital within six months, by november 2009. importantly, we publicly released our comprehensive assessments of each of the firms ’ estimated losses and capital needs under the more - adverse scenario. our objective in releasing the information was to encourage private investment in these institutions, and