An interesting article was published in The Scotsman today in respect of the growing possibility of the FSA investigating interest swap sales. According to The Scotsman, the FSA who have been asked to look into contracts bought by businesses to insure against unexpected rises in interest rates, are now expected to report on an interim basis by the end of this month.
Martin Wheatley, head of conduct at the FSA, said he was focusing on the big four banks – Barclays, HSBC, Lloyds and RBS – which sold 95 per cent of the swaps. The FSA will publish an update at the end of June. The FSA’s investigation into mis-selling of swaps to businesses indicates that pressure on banks in respect of their actions in the years leading up to the crash is increasing. If it becomes clear that under the FSA’s Conduct of Business Rules there is no legal redress available to businesses, it may be that the way forward will be for Parliament and/or FSA to either change or reinterpret the current rules in order to avoid such mis-selling occurring in the future. However, currently hopes are pinned on the FSA finally grasping the nettle, recognising that these products were plainly mis-sold and reaching the long overdue conclusion that redress should be available for those wronged.
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