More pain for banks as FSA settles over swap mis-selling

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Barclays, HSBC, Lloyds and RBS have agreed settlements with the FSA after the regulator found "serious failings" in their sales of interest rate hedging products.

An FSA review of such products, designed to protect against the risk of changes in interest rates, found a range of poor practices including the poor disclosure of exit costs, a failure to clarify customers' understanding of risk and non-advised sales straying into advice. Many such failings were driven by the prospect of rewards and incentives, according to the FSA. The regulator said the sale of such products to small and medium-sized businesses produced "a severe impact" on a large number of such SMEs. "Not all businesses will be owed redress, but for those that are, the exact r...

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