Martin Wheatley tells banks to speed up payments

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.