FCA response to Conduct and Competition in SME lending published

12 October 2015

The Treasury Committee has published the response from the Financial Conduct Authority (FCA) to the report of the Committee in the last Parliament, Conduct and Competition in SME Lending.

Chair's comment

Commenting on the response, Right Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, said:

FCA IRHP Redress Scheme

"Many small businesses have been badly hit by the complex terms of the Interest Rate Hedging Products (IRHPs) offered by their bank. A significant number of those firms who were mis-sold these hedging products feel that, having been ripped off in the first place, they have now been treated unfairly again by the FCA’s IRHP redress scheme.

"The Treasury Committee’s report in June 2015 identified a number of serious concerns about the FCA’s scheme. The Committee recommended – among other things – that the FCA should collect the information necessary to establish whether there are systemic failures in the review and publish its findings.

It is welcome that the FCA now recognises the merit of conducting a review of how the redress scheme has been operating. It should get on with this. Restoration of confidence in the scheme is essential.


"Millions of consumers and small businesses have been getting a poor deal for decades because of a lack of effective competition and genuine choice in banking. This problem is particularly acute in the SME banking market.

After persistent pressure from the Treasury Committee, the FCA is now required by law to promote competition in the interests of consumers.

The FCA’s efforts to fulfil this competition objective and transform its culture are still work in progress. It is welcome that the FCA acknowledges that barriers to competition can and do arise as a result of the regulatory regime.

Much more still needs to be done to put competition at the core of decision-making across the organisation. The Committee will expect the FCA’s leadership, both the Acting CEO and whoever may subsequently be appointed, to have this as a priority."

Further information

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