Banks accelerate rate swap compensation

The amount of compensation paid out to small firms mis-sold interest rate swap products almost doubled last month, the City watchdog said today.

The Financial Conduct Authority (FCA) said a total of £306.3 million in redress has now been paid out the firms that bought the complex products, which were marketed as offering protection against rising interest rates.

However, the latest figure – which is up from £158.6m in December – is only about 10 per cent of the total £3 billion banks have set aside in compensation.

Clive Adamson, director of supervision at the FCA, said: “Our focus will remain on ensuring that, during the decision process, affected business owners are treated fairly and that banks remain on course to get their initial offers of compensation out by the end of May.”