Six more banks have agreed with the FSA to fully review the extent of misselling of interest rate swaps.
Allied Irish Bank (UK), Bank of Ireland, Clydesdale and Yorkshire Banks, The Co-operative Bank and Santander UK have now agreed to review interest rate swap sales in line with the approach agreed by the regulator last month with Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland.
Banks will have to review the sale of 40,000 swaps made on or after 1 December 2001.
In an update last week, the FSA says pilot findings relating to the other six banks echoed earlier results which found over 90 per cent of sales reviewed did not comply with regulatory requirements, with a significant proportion of cases likely to result in customer redress.
Bank of Ireland originally argued it only sold swaps to “sophisticated” customers but the FSA says the pilot shows some customers should have their sales reviewed.
The FSA is assessing how swaps sales by UK branches of the Irish Bank Resolution Corporation, formerly Anglo Irish Bank and Irish Nationwide Building Society, should be reviewed after the company went into special liquidation on 7 February.
Yellowtail Financial Planning managing director Dennis Hall says: “Given the number sold and the types of corporate clients involved, I think we are looking at a significant customer redress bill from yet another bank misselling scandal.”