Four banking giants including HSBC and scandal-hit Barclays are to provide redress to business clients mis-sold specialist insurance on loans, the Financial Services Authority (FSA) has said.
The regulator said the banks mis-sold the products known as swaps, which were meant to protect businesses against rising interest rates but which came with huge costs if rates fell, to thousands of small and medium-sized businesses.
The FSA said it had found “serious failings” in the sale of these products, and the BBC reports that four banks – Barclays, HSBC, Lloyds and RBS – are to redress clients.
The banks have also agreed to stop selling the products.
The development comes just days after Barclays was fined a record £59.5m, on top of other penalties from US authorities, for LIBOR rate-fixing.
