U.K. banks must hold capital against possible “Libor aftershocks”

Speaking to the Parliamentary Banking Standards Committee, Mr. King said class-action lawsuits against banks over alleged fixing of the London Interbank Offered Rate could be large and are part of a wider issue facing the industry.

“I think one of the additional burdens on banks at present, and for which they will need to provide capital, is the increasing consequence of regulatory fines of all kinds, not just Libor, but other kinds,” Mr. King said.

Barclays PLC (BCS) earlier this year paid $450 million to settle with U.K. and U.S. regulators after it admitted trying to rig several interest rates including Libor. It is now embroiled in a court case with care-home provider Guardian Care Homes over interest-hedging products the care-home provider bought. Barclays said the company knew what it was entering into by purchasing the swaps.
Analysts estimate banks involved in the scandal could collectively end up having to pay out billions of dollars to regulators and customers.

Mr. King’s comments come after the Financial Stability Board, the regulatory task force for the Group of 20 economies, earlier this month said recent “events and failures” in banks’ operations and activities mean they should hold more capital.

The Parliamentary Banking Standards Committee was set up in the summer to come up with recommendations on how professional standards and culture in the U.K. banking sector could be improved.

Reported: http://www.foxbusiness.com/news/2012/11/22/uk-banks-should-hold-capital-for-libor-aftershocks-boe-king

 

 

Interest Rate Swap News

Dealing with Consequential Loss from Interest Rate Swaps

When will the investors who were mis-sold interest rate swaps (IRS) be compensated for their losses? The High Street banks were paid in 2008, but why aren’t the regular investors being compensated? The banks have admitted guilt. So why the slow process?

The UK has changed its primary financial regulatory agency and made new rules. In November 2013, there are promises for letters dealing with consequential loss from interest rate swaps. Here are the details and what you discover when you “read between the lines.”

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What is the FCA Sophisticated Customer Test?

In January 2013, the FCA published what it found with regard to the pilot review scheme for the mis-selling of IRHPs, or interest rate hedging products, otherwise known as swaps. In a number of ways, the results were welcomed: the company found over 90 percent of sales to “non-sophisticated” customers did not comply with regulatory requirements, such as the COBS Rules. In addition, the FCA noted that most of these sales have the chance to result in redress to the customer.

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FCA: Interest Rate SWAP redress set to Increase

One of the biggest scandals to affect the financial industry in recent decades has been the rise to prominence, and subsequent crash, or interest rate swaps and related securities. In a period of stock marketing trading and banking practises that were generally less regulated than in earlier eras, these products played a central role in boosting consumer fortunes and building up economies both in the United Kingdom and around the world. Their subsequent fall from grace led to one of the biggest financial crises of the last half-century.

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Interest Rate SWAP Claims

Maple Leaf Financial have a specialist team of solicitors dedicated to dealing with the mis-selling of interest rate swap protection products by the banks. We are happy to review these relatively complex swap arrangements and to claim compensation for our clients where appropriate.

If you believe you have incorrectly been classified as a ‘sophisticated’ customer and have, therefore, not been eligible for interest rate swap redress. Maple Leaf Financial will review your interest rate product and we will be happy to discuss your individual concerns and requirements

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Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim


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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.