The Treasury Select Committee today publishes several pieces of correspondence between the Chairman of the Committee, Andrew Tyrie MP, the Chair of the Financial Services Authority, Lord Turner, and the Chairman of the Board of the Financial Ombudsman Service, Sir Nicholas Montagu.
Mr Tyrie wrote to Lord Turner and Sir Nicholas Montagu on 19 March 2012 expressing concern about recent reports from a number of small businesses over the way they have been sold complex interest rate derivative products by major banks.
“This alleged mis-selling has been of concern to the Committee for some time.
“I am pleased the FSA is now investigating it.
“As Sir David Walker said in evidence to us today, products such as these are unlikely to be appropriate for the retail market.
“I agree with Sir David when he went on to say, a ‘compulsory joint product approach,’ whereby firms were allegedly required to purchase complex products in order to obtain other bank services, is wholly unacceptable.
“I note that Baroness Hogg said such a practice would also be anti-competitive.
“It is now up to the FSA to get to the truth. We will do what we can to ensure that they do”
During today’s evidence session on Corporate Governance and Remuneration, Sir David Walker and Baroness Hogg spoke about this particular issue in the context of the broader prevailing culture within British Banks.
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