ONSIDE / BANKING Q & A
A CALL
TO ACTION
Seneca’s Tim Murphy has been at the
forefront of the battle between businesses
and banks. He tells Michael Taylor that
politicians and regulators could and should
be doing so much more.
Q: Are businesses still suffering from the effects
of being mis-sold swaps and other hedging
products?
Tim Murphy,
Seneca Banking
Consultants
6
A: To keep it simple we’ll use “swap” to describe all
mis-sold Interest Rate Hedging Products. Undoubtedly,
the banks have been very effective in restricting access to
compensation for the majority of businesses affected by
mis-sold swaps. They have achieved this by excluding
certain products, such as Fixed Rate Tailored Business
Loans from the agreed compensation scheme and also
limiting access to the scheme for companies over a certain
size. Without going into too much detail here, companies
with turnover over £6.5 million will struggle accessing the
agreed scheme and will probably need to litigate. Within
the scheme itself the banks have taken a hard line towards
settling claims and have routinely accepted they have
mis-sold a product only to offer a similar product as part of
the proposed compensation, thereby reducing the amount
of cash they need to pay out. In