Hedges with thorns: the interest rate swaps review

The regulator has ordered banks to review their sales of interest rate hedging products to small businesses, many of whom were stung by these schemes’ noxious conditions during the financial crisis. Adam Samuel reports on yet another mis-selling scandal.

With magnificent understatement Tracey McDermott, FSA director of enforcement and financial crime, said the findings “do not make for pretty reading”. The final notice wording is more stark: in the relevant period, “every LIBOR submission in currencies and tenors in which UBS traded is at risk of having been improperly influenced”; similarly, for EURIBOR. [1]