In an unsurprising revelation it appears that banks have yet again been fingered for selling another "dodgy" financial product that was totally unsuitable for the hapless customers onto whom it was foisted.
This time the offending products were complex interest rate derivatives, sold to SME's.
The FSA is of the view that around 90% or more of these products, which did not comply with one or more regulatory requirements, were mis-sold.
Seemingly the banks structured these products in such a way that escape from them was prohibitively expensive.
Mr Wheatley is quoted in the Telegraph:
This time the offending products were complex interest rate derivatives, sold to SME's.
The FSA is of the view that around 90% or more of these products, which did not comply with one or more regulatory requirements, were mis-sold.
Seemingly the banks structured these products in such a way that escape from them was prohibitively expensive.
Martin Wheatley, chief executive designate of the Financial Conduct Authority, accused lenders of selling businesses “absurdly complex products” and said many customers could now expect compensation from their banks.
Mr Wheatley is quoted in the Telegraph:
“This marks significant progress in our review of these products. We believe that our work will ensure a fair and reasonable outcome for small and unsophisticated businesses.”Lenders have seemingly set aside over £700M against potential swap mis-selling claims, with Barclays making the largest provision of £450M. Whilst it is expected that the provisions will double, the final cost may in fact hit £10BN.
