I have written to the Financial Conduct Authority to ask for a review into its multi-billion pound redress scheme for interest rate swap mis-selling.
Earlier this week the Treasury Select Committee released a highly-critical report into the scheme, and had questioned whether it had been fair to small businesses that had sold interest rate swaps by the banks. Indeed, this was a matter that we considered back in 2012 when I was a member of the TSC, and I was pleased at the time that the banks had recognised they had acted recklessly.
Nine banks have been ordered to pay redress, currently worth over £1.8 billion, to all firms which did not meet the “sophisticated customers” test, based on turnover, balance sheet and staff headcount.
The TSC has recommended that the FCA should collect the information necessary to establish whether there are systemic failures in the redress scheme and publish its findings, a summary of the complaints it has examined and take any action it decides is appropriate to ensure that all customers receive fair and reasonable redress.
I strongly support these recommendations.