UK firms to be compensated for mis-sold swaps
(Reuters) - British banks face another round of compensation claims that could again total billions of pounds after a study of interest rate hedging products sold to small firms found the vast majority were mis-sold.
The Financial Services Authority said on Thursday it found that, in the 173 test cases examined, more than 90 percent did not comply with at least one or more regulatory requirements. A significant proportion will result in compensation being due.
While the products were supposed to protect firms against rising interest rates, they left them facing huge bills when rates fell. Firms also faced hefty penalties to get out of the deals, which many said they were not told about.
Martin Berkeley, a senior consultant at Vedanta Hedging, which advises on interest rate hedging products, said the final bill for banks could be as high as 10 billion pounds.
http://uk.reuters.com/article/2013/01/31/uk-banks-misselling-idUKBRE90U08A20130131
