The Financial Conduct Authority’s confidential agreement with several major banks, which set up the Interest Rate Hedging Product (IRHP) Review, was published today. The Treasury Select Committee has also expressed concerns that the terms of the IRHP Review has allowed major banks the opportunity to avoid providing meaningful redress to SME customers who have been mis-sold interest rate hedging products.
IRHP Review – agreement between the FCA and major banks
Andrew Tyrie MP, chairman of the Treasury Committee, commented on the publication of the agreement between the FCA and several major banks, and said:
These documents need to be in the public domain. The FCA took far too long to cooperate and did so only after many requests and persistent pressure from the Committee.
The agreement will allow those who are party to the redress scheme to examine the precise terms of it, in particular what redress should be provided to firms that were mis-sold these complex products. The Committee will want to reach a judgment on whether the process provides fair and reasonable redress.
The Committee remains very concerned that terms of the FCA’s redress scheme may, in some cases, have provided banks with an opportunity not to provide meaningful redress. Many firms feel that this process has unfairly favoured the banks.
The Committee expects to comment further on the scheme in its forthcoming report on SME lending.
The confidential agreement between the FCA and several major banks, establishing the IRHP Review, can be seen here:
Agreement relating to Past Sales of Interest Rate Hedging Products
Supplemental Agreement relating to Past Sales of Interest Rate Hedging Products
The Treasury Select Committee also published a letter from Clive Adamson, former Director of Supervision at the FCA, to major banks in relation to the IRHP Review, which can be seen here:
Letter from Clive Adamson to Major Banks about the IRHP Review
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