View more on these topics

Treasury pushes FCA on review of interest rate swaps redress

The Government is piling pressure on the FCA to carry out an independent review of the redress scheme for small businesses missold interest rate hedging products.

Treasury economic secretary Andrea Leadsom wrote to FCA chairman John Griffith-Jones yesterday urging the regulator to accept the Treasury committee’s recommendation to “establish whether there are systemic failures in the redress scheme and publish its findings”, the FT reports.

The committee voiced concerns in February that the scheme had allowed banks to avoid paying “meaningful redress”.

Nine banks have been ordered to pay redress, currently worth over £1.8bn, to all firms which did not meet the “sophisticated customers” test, based on turnover, balance sheet and staff headcount.

In 2012 the FCA found failings in how some banks sold structured collars, swaps, simple collars and cap products. In May 2013 the regulator began a review of sales made to unsophisticated customers since 2001.

The products were popular prior to the financial crisis as businesses tried to guard against the risk of interest rates rising. However, many firms had to pay out when rates fell.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com