The banks’ latest mis-selling scandal

Banks are once again in hot water with the regulator. This time it's for mis-selling interest-rate swaps. Tim Bennett explains how they work, and why it could cost the banks billions.

Britain's banks have been at it again. This time they've been mis-selling interest-rate swap' products to small businesses, which have then blown up in their customers' faces, according to the Financial Services Authority (FSA).

Based on a sample of 173 sales by Britain's four biggest banks Lloyds, Barclays, HSBC and Royal Bank of Scotland the regulator reckons more than 90% of swaps may have been mis-sold. Lenders are thought to have set aside around £700m for compensation, but some experts put the bill as high as £10bn.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.