Interest Rate Swap lawyer, Emma Slade, looks at the reserves that the banks have put aside to meet interest rate swap compensation claims and asks ‘is it enough?’
Concerns are being raised as to whether there is enough money in the proverbial pot to compensate victims of the Interest Rate Swap scandal; not just to repay any breakage costs that have been incurred, but also any additional costs and interest that they have paid.
So far, the Big Four banks have set aside a total of nearly £740m, with Barclays setting aside the most in a staggering sum of £450m. But already, there are calls suggesting that this figure is one of mere ‘wishful thinking’. It is rumoured that Barclays is preparing to set aside another £1.1 billion and the likes of lobby group, Bully Banks, which represents over 1,000 small businesses, has suggested that the final cost may be closer to a whopping £10 billion.
This is an alarming figure, particularly given the state of the economy at the moment. The picture for victims is not made any better by reports that the FSA is “coming under sustained pressure from the banks and the Government to soften or delay paying any compensation”. Clearly, delay in paying out such huge sums by way of compensation will help not only the bank’s bottom line profit figures but also, in theory, the Treasury in its goal to encourage banks to lend more to small businesses.
What it will not help are the small businesses that have been badly affected by the huge costs that have been inflicted on them. At the same time, further delay may lead to such affected companies missing critical litigation limitation periods which will prejudice their options for recovery.
If you have been affected by interest rate swap mis-selling, it is recommended that you seek specialist legal advice at the very earliest opportunity. Whilst the FSA-led reviews are being considered, delay could be critical to your claim for recompense.
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