Martin Wheatley, the chief executive of the Financial Conduct Authority, has told banks to stop dragging their feet and compensate without further delay small companies to which they mis-sold interest rate swaps.
"In a situation where many small-companies employers who took out these products are struggling to make ends meet, the industry is deceiving itself if it imagines that a total of 32 offers accepted, totalling £2m, is adequate progress" said Mr Wheatley in a hard-hitting speech at the Mansion House in London.
High street banks have had to set aside about £3bn to compensate firms to which they sold complex contracts intended to insure them against a rise in interest rates. Mr Wheatley added that the slowness of banks to provide compensation was aggravating the "unfairness" of the original mis-selling.
Some banks seem already to have taken on board the regulator's message. Earlier this week, HSBC and Royal Bank of Scotland announced a new system whereby compensation for mis-selling will be handed over before full losses are determined.
But Barclays and Lloyds have said they will continue to pay on a case-by-case basis. RBS is assessing 9,713 cases, Barclays 2,412, HSBC 3,315 and Lloyds 1,905.Reuse content