ONSIDE / BANKING Q & A
Q: And what do you think they SHOULD do,
as opposed to what they probably will do?
A: There is a long list I’m afraid. They should include Fixed
Rate Tailored Business Loans in the compensation scheme
now, they should prevent banks offsetting compensation
payments against their facilities in any situation. The whole
question of a “swap for a swap” as part of the compensation
package and their approach to consequential losses needs
to be addressed and they need to introduce a Financial
Ombudsman for small and medium sized businesses to
appeal to.
Q: Are the banks still selling swaps?
Q: But don’t they love bashing banks?
A: They do, but sound bites count for nought when trying
to represent businesses on their individual cases.
Q: What did the Treasury Select Committee
looking at business finance want to know
and what did you tell them?
A: They are interested in the whole area of bank regulation
and support for businesses. The mis-selling of “swaps” is
just one perspective on how banks have viewed and treated
businesses. On the regulation point businesses need an
ombudsman with teeth, at present only micro businesses
(less than ten employees and with sales under €2 million)
can apply to the Financial Ombudsman Service. Apart
from the courts and the banks’ own internal complaints
departments there is nowhere for other businesses to go,
which is something banks have used effectively for any
appeals against their decision relating to the mis-selling
of swaps. The Treasury Select Committee has not tackled
the point of Fixed Rate Tailored Business Loans not being
within the scheme, this is a glaring omission and is their
single biggest failing on this issue.
A: They certainly are and the rigour they now apply to
explaining the product is in stark contrast to how they were
selling these products. This as much as anything highlights
how bad the banks’ practices relating to swaps were and
how destructive they were for the business community.
Q: What difference has swap settlement made
to the businesses you’ve helped?
A: The cash compensation has obviously benefited businesses
in many different ways. What is more striki